A plant, given an exacting mixture of water, soil, fertilizers and light produces more blossoms in new colors. An athlete, with an ideal program of training, measurements and nutrition wins the marathon with optimal harmony between muscles, nerves and brain. Two very different scenarios with a common thread: the disciplined linkage of all of the elements involved. Successfully using data in insurance is not all that different. It is about linkage!
We all understand the value equation: the important role data plays in managing the fundamentals of insurance. Many would argue that it is data, combined with sophisticated analytics, that will shape the winners of tomorrow. Some even proclaim that data and analytics are equipping outside-the-industry players with the power to successfully enter the market and take considerable share.
For insurers, capturing, managing and using data effectively is a formidable challenge. Core systems such as policy, billing and claims have grown up “owning” their data. Other sales and marketing systems maintain their own independent data. Typically these systems are not easily integrated, and they often keep redundant information that doesn’t always match. Further complicating the picture is the reality that internal data is not enough to make informed risk evaluations, much less meet the needs and expectations of customers. External data is critical and becoming mandatory.
Over the coming years, the volume of information will explode with the addition of unstructured text, geo/imagery data and sensor data. The sheer volume of new data from these sources is overwhelming. The simple truth is that the capability for cleansing, managing and manipulating all this data goes well beyond the scope of most existing systems and insurance organizations.
In our industry, we often talk about integration. When it comes to data, we are going to have to assume a new perspective: one of linkage. Success in the future will depend on the capabilities we put in place to present an accurate map of what information resides where, and describes the actual quality level of that information. Equipped with this insight, there is power to cut across information, to pierce the silos, to select the best of the best, and then appropriately link it to additional information. It is the power of this linkage that significantly increases the value of data, and gives it maximum utility and optimum value for making successful business decisions and delivering exemplary service. Consider the ability to view physical structures and locations, as well as the data, documents and messages linked to that structure or area. Think about being able to look at words, and how they are changing in claims-report text by location, property characteristics or insured type. Then overlay this with the conceptualization skills of humans, who view and analyze this information. Imagine the insights this collective effort of machines and humans could generate.
The linkage possibilities are enormous, offering not only an expanded assessment but a highly enhanced view of the information already in place. The good news is that the competencies and capacity to deliver the power of linkage are available today and already being used in other industries and by a few leading insurers. It takes sophisticated data mapping proficiencies, quality assessment tools that can dive into the context of information, and super-computing power. All of these capabilities are ready for practical application. So, be ready for tomorrow. Take a new look through the linkage lens!
