Practicality vs Serendipity

Is your insurance company more concerned with being practical? Having the right tools, systems and capabilities available to run the business as effectively and efficiently as possible? Only replacing the business systems that can make the business run even smoother? Having an approach to decision-making and analytics that is entirely practical? That means running the same reports again and again although against new data (one dares to hope it is this at a minimum)? Using the same hypotheses to generate analytic reports and presentations?

Or … and here we take  as an adventurous journey as the one Alice did down that rabbit-hole (or through the looking glass, if you prefer), does your insurance company value serendipity? Accidently coming across new questions, new hypotheses and of course, new ways to report and present the results of analytical queries? Does your insurance company understand the competitive imperatives behind those moments of aha that come with getting dirty with the data provides?

Better yet, does your insurance company realize that it always needs to balance practicality with serendipity … and that balance doesn’t mean 50/50 but at times, like in recessionary times, more effort is really demanded in the adventure zone than in the practical zone.

Well, what does your insurer value? And are you concerned that a steady diet of practicality will result in your insurance company being left behind its competitors if not fading away into the history books yet to be written of once-great insurers who, well, who just couldn’t keep up in a rapidly changing marketplace?

Bridging the Divides

It doesn’t seem that long ago that I thought the “great divide” insurers faced was bridging operations and information. Operations – policy administration, billing, claims, producer onboarding and compensation, reinsurance and so forth – kept the business going while information extracted from those functional processes and other sources fueled decisions.

Oh for the good old days.

We really haven’t solved the operational / informational divide but the rapidly emerging Digital Marketplace has uncovered a divide that had always existed but has now taken on more urgency: the divide between structured data and unstructured data.

Structured & Unstructured Data

Structured data we know and sometimes love: numbers, spreadsheets, databases, … But unstructured data is all around us in the insurance value chains including but certainly not limited to:

•  E-mails from external stakeholders (I’m referring to policyholders, prospects, producers, regulators and reinsurers) to insurance company personnel
• E-mails within the value chains of the insurance company (from one or more employees to other employees)
• Phone calls within and between stakeholders whether internally or externally or some combination
• Policy application forms in some state of completeness
• Product development forms
• Claim adjuster forms 
• Claim adjuster pictures or videos
• Instant messages
• Tweets (yes, tweets within and between stakeholders)
• And, well you get the idea.

This divide must be solved sooner than later. And the solutions rests with understanding the importance of investing in capabilities that enable the insurance company to mix, merge or otherwise blend, and access structured and unstructured data into one coherent data repository … and, of course, be able to visualize the results of the queries in a way that leads to effective and efficient decision-making.

What is your insurance company doing to bridge the structured / unstructured data gap?

Release Your Imprisoned Data !!

Insurance companies could fuel years, if not decades, of rip-roaring bonfires with their inventory of hard-copy documents. Every department from underwriting to claims to legal (and for life insurers, medical) and other functional departments all have mountains of documents stored in file cabinets and desk drawers too numerous to count.

Each one of those documents encompasses significant information assets crying out to be freed from their paper prisons and released into a coherent digital infrastructure. As long as the information is held prisoner in their forms, only the jailer can access and use the assets frozen in place. Sharing across departments is done infrequently if at all. Sharing throughout the value chains that touch the field staff, producers, regulators and reinsurers is done mostly at the proverbial point of a gun.

Be Free, Data, Be Free!!

If all the data were set free from their hard-copy prisons and poured into coherent data structures that were tagged and searchable throughout the insurance company (including by stakeholders across all the value chains), what might we want to do?

• Perhaps we could tag the various products with the terms, conditions, restrictions, endorsements or riders (depending on the flavor of insurance we are talking about) so that someone could search on any one of those attributes, Or
• Each set of claim information could have descriptions of what the claim adjuster was thinking when s/he saw the loss occurrence – something relating to the magnitude of the impact or loss of the claimant’s property, Or
• Product forms could have descriptions relating to why the product was created, the markets the insurer wanted to penetrate and the competitors the insurer was striving to gain market share from with that specific product
• Underwriters could possibly attribute why they had stipulated the acceptance or rejection criteria for each product
• Campaign data assets might have descriptions by the marketing department relating to the purpose and scope of each specific campaign
• Customer service personnel could describe the tone and nature of the calls they have received from policyholders, prospects and producers for each communication event

What would you want to do or expect if your insurance company data were thawed out from their frozen cells and released into a collaborative environment?

Rainbow of Data

Insurance is an information-driven business. It’s not information-intensive because that description totally understates the critical importance of information that flows through, among and between the value chains that are part and parcel of insurance decision-making, operations, and financial considerations. No information, no insurance business.

And the spectrum of the data rainbow just keeps lengthening. In the past we dealt with numbers and documents. Now we have to deal with e-mail, instant messaging, Tweets and quickly emerging, rich media (pictures, video, and sound).

The picture below attempts to capture the lengthening spectrum of the data rainbow.

Rainbow of Data

 What’s at issue are these challenges centered around which of these data types your insurance company:

• Thinks of as important – and for what business processes?
• Manges effectively?
• Understands and has the tools to combine into a coherent, unified whole to make better decisions?
• Either builds capabilities internally or looks to external technology providers to help manage for compliance, for decision-making, for operational support, for product development, and for collaboration with employees and producers regardless of where they are located geographically?

Data are not just numbers: data runs the spectrum of numbers to documents to electronic communication to rich media. What part of the data rainbow spectrum does your insurer actually see? Use?

Sizzling’ Just Sizzlin’

Bacon crackling in the pan, drippings from the steak on the grill … just sizzling.

Just like analytics for the insurance industry. Sizzlin’ just sizzlin’ …

And why not? Insurance is nothing but information flowing amongst and between the value chains that keep the business operating, that enables executives to make better informed decisions, that strengthens product development and … Well, you get the idea.

The insurance company is an information factory. It creates information. It consumes information. Information is the very life-blood of the insurance company.

BUT…

But do insurance executives realize the power of analytics? Are they merely running reports to test or present existing hypotheses?  More importantly, are some of the insurer’s more talented quant jocks creating new hypotheses? Or even better, immersing themselves in the data and using analytical tools that enable hypotheses to emerge?

Have insurance executives realized the power of spatial information management? If not, how effective or efficient can their placement of agencies or brokers be in their field management decisions? Are the insurers marrying demographics, psychographics and spatial information into a coherent perspective to develop products better pinpointed to specific territories meeting both policyholder and producer needs?

Have insurance executives realized that data encompasses not just digits but also documents? Content management is critical to coherent analytical decision-making.

But a recent article in TechDecisions discusses the sad fact that analytics is not as far along as it really should be [my opinion].

Sizzling' Just Sizzlin'

Bacon crackling in the pan, drippings from the steak on the grill … just sizzling.

Just like analytics for the insurance industry. Sizzlin’ just sizzlin’ …

And why not? Insurance is nothing but information flowing amongst and between the value chains that keep the business operating, that enables executives to make better informed decisions, that strengthens product development and … Well, you get the idea.

The insurance company is an information factory. It creates information. It consumes information. Information is the very life-blood of the insurance company.

BUT…

But do insurance executives realize the power of analytics? Are they merely running reports to test or present existing hypotheses?  More importantly, are some of the insurer’s more talented quant jocks creating new hypotheses? Or even better, immersing themselves in the data and using analytical tools that enable hypotheses to emerge?

Have insurance executives realized the power of spatial information management? If not, how effective or efficient can their placement of agencies or brokers be in their field management decisions? Are the insurers marrying demographics, psychographics and spatial information into a coherent perspective to develop products better pinpointed to specific territories meeting both policyholder and producer needs?

Have insurance executives realized that data encompasses not just digits but also documents? Content management is critical to coherent analytical decision-making.

But a recent article in TechDecisions discusses the sad fact that analytics is not as far along as it really should be [my opinion].