Executives Talk of Creating Data Csars

Move is seen as a nod to the importance of taking responsibility for and protecting the integrity of data.

By Cyril Tuohy

The vast amount of data generated by insurance carriers has led some to consider appointing a "data csar," according to insurance executives.

The fact that some companies have even considered naming such a C-suite executive is also a recognition of how seriously senior management considers protecting and taking stewardship of data.

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"We're beginning to talk about it," said Ursuline Foley, senior vice president and chief information officer with Bermuda-based insurer XL Capital, speaking at a May panel discussion of the Association of Cooperative Operations Research and Development, an organization promoting common standards in the insurance industry.

Carriers protect their data with rabid zeal, as the data an insurance company keeps is considered one of the few ways to distinguish one carrier from another in the fight for customers on the global stage.

The possibility of an executive-level officer in charge of data administration shows the industry recognizes that data management requires the attention of people at the highest levels of the corporation.

Yet with many carriers, it is the information-technology department that has greater jurisdiction over the data, though executives consider data a strategic asset to be mined and parsed in search of new patterns from which new products and services can be developed.

Paul Fox, chief information officer of New York-based reinsurance intermediary Guy Carpenter & Co. Inc., said that industry discussion regarding the appointment of data csars was driven largely by the needs of clients who are demanding carriers to provide them with complex quantitative analytics. "The marketplace has driven a lot of this," he said. "The clients are starting to demand quantitative analytics."

While the insurance industry might be founded on longstanding relationships, insurance companies are driven by collecting data, and turning that data into useful, coherent information to a much greater degree than in the past.

So important has data become for carriers that losing it is sometimes equated with putting an entire insurance company at risk of losing market share. Along with losing what insurance carriers consider to be a vital asset, companies are on the hook for millions of dollars in liability.

Incidents in the past two years in which some companies and government agencies have lost laptops containing information, from Social Security numbers to the health status of individual citizens, has brought to light how vulnerable some companies are to the loss of data, or worse, the theft of data.

Insurance executives on the panel said that they expected to spend more money on protecting their data through encryption. "As we share data with third parties, it's a very big issue," said Jeff Carlson, senior vice president and chief information officer for the Domestic Life Companies at American International Group Inc.

Regulators, the executives said, have played a key role in forcing top executives to be more accountable for the accuracy of their firms' financial statements. As a result, this has led companies to take a much more serious approach in managing and protecting their data.

July 1, 2007

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