Computer code and text displayed on computer screens. Chris Ratcliffe/Bloomberg Data is one of the most valuable assets a business can have. It is the new currency, a competitive advantage that can be used in decision-making, risk management and reducing costs. Data is crucial to the insurance industry. Yet with all the vast amounts of data available to our business, many firms cannot identify what data they have, where it is stored, what information it contains and who is responsible for it. Furthermore, many companies have silos that limit access to data, preventing business units from sharing knowledge, and making it very difficult for companies to leverage the full value of their data. In many ways, we are far behind other industries in harnessing the power of data. But we should not despair. There is a clear business case for democratizing – or said more plainly, broadly sharing – data across an enterprise. If we responsibly open up data while working to mitigate the potential risks, there can be meaningful payoffs for our customers and companies. Data democratization is the future. Historically, data was owned by IT departments, and business units that needed access to data would have to go through IT. This made sense when data was limited and used simply to administer the business. The sales team had access to pipeline information, the operations team had access to enforce management records, and the finance team had access to financial data. But this segmented view of data is no longer appropriate given the explosion of data in the last decade. The industry needs to change these outdated practices, as making data available for broader use across an organization can pay dividends. For example, if the finance team has access to pipeline information traditionally owned by the sales offices, they can use analytics to predict which leads will convert to sales. Feeding that information back to sales teams will allow agents to focus their time on the clients with the highest probability of conversion. Another use case for data sharing is to provide the operations team with financial data on a customer, such as lifetime customer value. This would prompt the call center to give a more personalized touch to customers with higher lifetime value. These are just two examples. The opportunities are vast and, in many cases, are still being discovered. Having a centralized data platform that the right individuals and teams can access equips organizations to effectively leverage data, analytics, AI and machine learning. Benefits Eliminating bias Increased collaboration Reduced Costs So, if data democratization is so beneficial, why are more carriers not embracing it? There are several legitimate concerns that cause companies to drag their feet on opening up data more broadly. Regulatory concerns Misinterpretation of data Consider if a leader unfamiliar with life insurance and annuity products tries to compare premiums between these two products. In doing so, that leader might draw the conclusion that the company should focus on annuities over life insurance since the top line revenue will be higher. But this ignores any context about the associated expenses, risks, and profitability for these products. This risk can be mitigated by presenting data clearly and in context, as well as training employees to understand the implications of misinterpreting data. Legacy
issues The way forward The challenge for today’s businesses is to figure out how to comply with regulatory and practical concerns while getting the optimal benefits for customers, the business and the insurance industry. There should be collaboration with legal and data governance experts, along with setting up access rights and permissions. There also needs to be clearly defined requirements and the selection of well-designed tools. Companies must promote change management and support training and development around data governance. From a cost perspective, they should also require a CBA which measures costs against hard-dollar gains from analytics. Companies who reimagine how they distribute, consume and analyze data are likely to save time and money, uncover more insights, and make better business decisions. Now that’s an outcome we can all get behind. director, insurance consulting & technology , WTW What is a segment of a company representing a specific business function?A business unit, also referred to as a functional area, is a segment of a company representing a specific business function. A business unit can also represent a department or division of an organization, for example, Accounting or Sales.
What is interoperability quizlet?Interoperability. The ability of two or more systems or components to exchange information and use the information that has been exchanged.
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