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Enterprise Data Platforms: The Perfect Complement to Data Strategies

Bruce F. Broussard, Jr. | February 10, 2014

By Bruce F. Broussard, Jr.

The essence of the insurance industry is analyzing information to understand and evaluate risks.  To do that most effectively, insurance organizations must be able to efficiently navigate high volumes of diverse data from multiple internal and external sources.

With data so critical to the insurance process, delivering comprehensive enterprise data capabilities should be high on the list of priorities for all insurers.  Those who move to aggressively establish strong enterprise data capabilities will have the opportunity to create and sustain competitive advantages and customer centricity.  Unfortunately, those organizations that remain on the data sidelines will most likely find themselves falling behind.

Many organizations have invested in some combination of Operational Data Stores (ODS), Data Warehouses (DW), and Data Marts (DMs) to support segments of their business.  However, many existing implementations suffer with persistent challenges that limit the scope, quality, or reliability of the consolidated data.  As a result, few insurers have been successful in establishing the enterprise data platforms required to support existing business needs or establish a strong position to take advantage of potential opportunities available with predictive analytics, Big Data, and other emerging capabilities.  

Establishing an Enterprise Data Platform

An Enterprise Data Platform (EDP) is a set of integrated repositories (ODS, DW, and DMs) that aggregate data from the core insurance applications into a consistent structure and context, While data from all relevant internal and external applications is ideal, the EDP should, at a minimum, include data from all core applications (policy, billing, claims, reinsurance), CRM, and financial applications. Once in place, the platform provides a consolidated portfolio data view as a foundation for operational and enhanced data functions, such as analytics. 

Advantages of creating an EDP include: 

  • Establishes a consistent source for supporting data to downstream applications (e.g. GL)  and external sources (e.g. agent portal, mobile app)
  • Serves as a reliable data source for power users such as actuaries and underwriters
  • Provides a layer of insulation protecting users and downstream applications from the impact of core application changes
  • Reduces cost and complexity of introducing new applications due to business expansion or acquisition.  [S1] 

When considering the options, insurers should prioritize use of industry standards such as the ACORD Information Model to quickly and economically establish a common construct to facilitate data movement between components.  Both IT and business can benefit from a wide range of data and application vendors offering products with out-of-the-box ACORD model support.  IT integration effort and complexity are greatly reduced, and business users gain consistent terminology, eliminating the need to consume similar information, in different formats, from a myriad of applications throughout the enterprise. 

The competitive advantage from an EDP lies with the new insights that can be discovered, rather than from the data repositories themselves. Once the platform is in place and populated, the data can be more easily leveraged for: application independent reporting, enterprise analytics, and external data integration.

Application Independent Reporting

Even for insurers who have an ODS, operational and management reporting capabilities often remain tightly coupled with the core insurance applications, an inherently inefficient model, forcing inconsistencies and application boundary limitations.  Using the EDP as the source for operational and management reporting overcomes those limitations by providing a solid foundation that is able to deliver application independent reporting. It also ensures that reporting best practices are available for the entire portfolio.

With the EDP, reports can be developed once and used to provide a consistent format and structure across all business areas, eliminating the need, time and costs associated with developing a report or format for each and every affected application throughout the enterprise. 

The reporting capabilities can now continue to be more easily expanded, leveraging the wealth of experience and avoiding the need to overcome the inconsistent reporting capabilities of each underlying application.  When a new application is added to the portfolio, immediately integrating with the EDP delivers the full collection of enterprise reporting capabilities and consistent data context to the business, alleviating many of the change management challenges that accompany new implementations.

Enterprise Analytics

While virtually every insurer has some form of analytics capabilities, most are challenged by one of more of the following: process consistency, data completeness, or data quality. 

Also, analytics are typically only applied in narrow functional areas such as underwriting or actuarial, and depend upon the specialized know-how of subject matter experts in each functional discipline.  Data is often provided that is incomplete, in inconsistent format, and often little more than a raw data feed. The responsibility lies with the subject matter expert to interpret the data correctly and consolidate it properly.  The challenge only gets exacerbated as new data is made available, which needs to be interpreted and consolidated.

However, with an EDP there is a single repository of data enabling the distribution of complete, consistent, and easily digestible and appropriate data sets for analytics.  The business can focus on true analytics activities rather than manipulating the inconsistent data into a usable format, and can easily expand the availability of analytics to a much broader segment of the business for improved insight and decision making

External Data Integration

Once an insurer’s internal data is aggregated, transformed, and organized, the opportunities to complement that data with external sources increases significantly.  Rather than expanding the structure of the EDP to accommodate storing external data, a better approach is to establish an effective integration strategy.  With a good integration strategy an insurer can more quickly leverage usable data from external sources.   Given that many of the external data sources are built with some form of ACORD support, an EDP based upon these standards will offer reduced complexity, time, and cost of integration. 

While much has been written on the potential opportunities around Big Data, the ability to efficiently integrate with and consume data from external sources is fundamental to reaping all the benefits Big Data has to offer.

The breadth of many insurers’ portfolios makes the use of multiple policy administration systems and other applications an unavoidable necessity.   Fortunately, the implementation of an EDP can deliver the benefits of a comprehensive and integrated portfolio without having to make any functional sacrifices among the underlying applications.  An EDP is the perfect complement to a robust application portfolio, and establishes the foundation that will be required for an insurer to remain successful in an increasingly challenging marketplace. 

 

(Bruce F. Broussard, Jr., is vice president, business development and strategic partnerships for

Insurity. He can be reached at bruce.broussard@insurity.com


 [S1]This section could be used as a sidebar.


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