Two Perspectives Enabling Stronger Strategic Options For The Insurance Industry

Getting down to basics about the insurance industry, how might someone perceive or reperceive the industry from a strategic perspective? Strategy, for me at least, is what a company does to differentiate itself uniquely from its competitors. That’s why I don’t consider core administrative systems (or one of the components of a core administrative system such as billing) to be strategic. But that is a post for another time.

The purpose of determining a perspective is to help identify those strategic elements to truly differentiate one insurer from another. It’s very much like people majoring or being expert in multiple disciplines. Reperceiving enables a fresh view; a new view; a different way of thinking.

I suggest there are, at least, two perspectives insurance companies should use when considering how to create or enhance their strategies. One is an information perspective and the second is a media perspective.

We all know that insurance is an information-based industry (not information intensive but information based). So, how might an information perspective help an insurance company differentiate itself from its competitors? Well, an insurer with an information perspective should:

• Understand that information must be shared throughout the enterprise and realize that information silos are barricades to success
• Craft an initiative to ensure that information is cleaned as it comes into, flows through, and streams outward to any and all parts of the value chains that encompass insurance decision-making and operations
• Realize that information is just  not all of that structured stuff being held (sometimes held hostage) in the various databases in every functional area
• Set a higher priority to monitor, manage and act on unstructured data whether that is text, pictures, sound or video
• Create strong search and navigation throughout the information streams for both internal staff (and I would include agents and brokers in this category for the purposes of our current discussion) and external stakeholders
• Create an information council made up of people from each business department

What would you add to this list if an insurer wanted to perceive its strategic objectives through an information perspective?

Then there is the media perspective. Of course, it is highly interdependent with the information perspective. However, an insurer that applies a media perspective would do best if it realizes it is both a consumer and publisher of information. So, the insurer would:

• Identify the media (or information channels, if you prefer) that information is produced (published) and consumed throughout the company value chains
• Look to actual media companies that are successful (e.g. Google or Amazon) and determine which processes, if any, can be repurposed for the insurance company (if the insurer is stumped at this point, they can just ask those stakeholders like their own staff or their agents or brokers how they would prefer to receive information)
• Augment their own media capabilities with existing social networking web sites (e.g. LinlkedIn)
• Begin to apply rich media authoring capabilities (e.g. Adobe’s AIR) to package and present information in a way that is more easily acceptable (not that the long, dry procedure manuals are not exciting and interesting in their own right)
• And as above, there are a host of other ways that an insurer could reperceive itself strategically by thinking of itself as a media company

What would you add to this list of media perceptions for an insurance company to consider?

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?