Boosting Data Quality for P/C Carriers Will Drive Success Across Claims, Underwriting and Meeting Customer Needs
Unfortunately, for several key reasons, data quality and enhancement have not historically been high on the list for the P/C insurance industry. For one, few carriers have had the capabilities and strategy in place to meet the data quality challenge. And, according to Navin Sharma, Director, Global Product Market Strategy at Pitney Bowes Business Insight Inc. (PBBI), what separates the leading insurers from those who are struggling goes right to the data quality strategy.
"Insurance companies have vast amounts of data about prospects, customers, partners, property, locations and events, and that data is used and reused in millions of customer interactions, reports, and analyses every day," explains Sharma. "But insurers don't always use this rich data because they often don't have the tools in place to ensure its quality, and get the most out of it."
Sharma adds that insurers can even lose customers because they do not really understand who they are and what their relationship is with the company, and that holds true for both personal and commercial lines.
"In most cases, that happens because the carrier doesn't have a single customer view," he says. For instance, an insurer may not realize that the father of the young man they just rejected for a motorcycle policy has multiple insurance policies, several investment products, and a lifetime value of millions of dollars.
"Also, an insurer may lose another customer because it causes her the cumulative frustration of having her name spelled incorrectly, spending time working through billing errors, and enduring delays in completing updates to her policy," Sharma says.
On the claims side, the costs for the typical insurer often are higher because the claim-handling process is too slow, with the result being higher settlement costs, and more lawsuits are filed against the company. Also, missed compliance deadlines due to poor data control and quality result in fines levied against the company. Finally, new market opportunities may be squandered because the company is unable to capture strategic insights from its data.
Sharma explains that there are many hurdles to achieving a "single view" of data, but the main one is that several different data domains exist, including customer data, product data, location data, etc.--all fairly static but widely used across the enterprise. Yet, data silos also exist, and those silos are costly in terms of how customer information is collected and managed.
In a related area, insurers historically have been product-centric, not customer-centric, Sharma says. As a result, data fragmentation based on products or processes (claims, underwriting) has caused carriers to lose valuable opportunities in terms of up-selling or cross-selling among current customers.
"All transactional data is used within the enterprise, but it is not always connected and easy to access," he says. "Customer satisfaction is influenced at every touch point, and at the heart of every touch point is data. Ultimately, everything in the insurance industry revolves around data."
The latest trend to overcome those hurdles is successful insurers are taking a step back, trying their best to get a single view of data as a foundation, because that is where data quality really resides, Sharma says.
"Many insurers want to get their processes more focused around the customer, so they have a better understanding of who they are, where they live, and how they can bundle products to meet customer needs," he says.
On the claims side, carriers want to want to know if there is a network of individuals involved in defrauding the system, for example, so they can use data to identify a pattern.
"A unified approach to quality data can improve customer experience, products and services, and also identify potential problems and risk," he says, adding that data can help identify a long-time customer with an automobile policy and turn it into the potential for selling different products.
"There is some percentage of cash flow that is escaping," Sharma says. "It's similar to underwriting leakage, for example. But it is leaving profits on the table."
Sharma says that successful insurers, the ones using quality data to manage their business, sees every interaction with customers as an opportunity to address their immediate needs, learn more about their additional needs, and proactively suggest ways to further help them.
"They understand the importance of each interaction and transaction," he says. "They fully understand the real worth of capturing and managing information, viewing it as the valuable asset it is."
"There are a few insurance market leaders that are working to translate their data requirements, leverage the tools and technologies available and impact both the top and bottom line from a growth and service perspective," says Deb Smallwood, an analyst and founder of Strategy Meets Action (www.strategymeetsaction.com), an insurance strategic advisory firm based in Boston. "A focus on data quality and enhancement must be at the core of every insurer's plans and roadmap."
Smallwood, who co-authored an SMA Perspective paper entitled "Insurance Data Quality & Enhancement: The Promise and the Peril," in March 2010, adds that proven tools and processes are readily available to improve data quality, enhance its value, and truly turn data into an insurer's most valuable asset.
"Unleashing the full power of insurance data must be on the short list for every insurer. It is doable today, it just needs to be embraced," she says.
Along those lines, PBBI offers insurers its Spectrum Technology Platform, which delivers a robust assortment of solutions that support data quality and data enhancement on an enterprise technology platform.
Bill Sinn, Strategic Industry Director, Insurance Practice, at PBBI, says the firm's offerings can uniquely position insurers to better serve their customers, improve operational efficiencies, and make better decisions about products, risks, channels, partners, and claims.
"The promise of high-quality, enhanced data is real and obviously within reach," Sinn says. "Unleashing the power of the data with fresh business intelligence tools and the innovative use of location-based applications will bring rich reward to insurers."
In fact, the promise is significant, Sinn adds, as it allows insurers to capitalize on their data by unleashing analytics, business intelligence tools, and location-based applications.
"It's very clear that insurers simply can't afford poor data quality," he says. "Data that is erroneous, incomplete, inconsistent, or out of date creates problems for insurers and makes it difficult to gain business insights. Worse yet, poor-quality data may result in lost business, increased costs, and even fines for lack of compliance."
PBBI offers an Enterprise Data Governance Solution that provides powerful tools to profile, manage and monitor the quality of company data, and features seamless integration with the Spectrum Technology Platform. Comprised of two modules, Profiler Plus and Monitor Plus, the solution efficiently manages and reports on enterprise data for a successful implementation of data governance initiatives. It offers an invaluable tool for collaborative issue discovery, analysis and management for data managers, data stewards, business managers and compliance officers.
PBBI also offers an Enterprise Data Quality Solution as part of the Spectrum Technology Platform. The Data Quality Solution helps establish fit-for-use standards for underlying data assets. These standards, in turn, optimize business processes that rely on good quality data for more accurate and reliable information.
"These services help provide the rich customer information needed to locate new opportunities, connect with customers and communicate more efficiently," Sinn explains. "By linking and consolidating customer information, it's easier for distinct functional areas to work in concert to improve customer relationship management, financial reporting and compliance."
The Spectrum Technology Platform does not replace an existing business platform--it improves the quality, integration, accessibility and value of information from any system.
PBBI's Sharma says today's software technology, delivered via the Software-as-a-Service (SaaS) platform, allows insurers to maintain a single customer view without a large investment. It delivers an infrastructure that a large vendor would provide, but with a significantly lower Total Cost of Ownership (TCO).
"Customer data is important across all industries, but for insurance, it is critical," Sharma says. "We help insurers create a 'trusted source' of data.
"Data drives the insurance business," he concludes. "And it's not just about taking a snapshot of existing customers. A data quality effort has to be pervasive and continuous, but you need the best tools to get there."
For more information, visit pbinsight.com. PBBI, a division of the $5.6 billion dollar mailing solution giant, Pitney Bowes Inc., provides location intelligence technology, end-to-end customer communication management solution and data management applications for insurance carriers.
(The above piece is part of our continuing Insights series designed to highlight key products and services to our readers. This paid-for Insights was written and edited by Risk & Insurance®
on behalf of our marketing partner. Additional Insights can be found on our Web site at www.riskandinsurance.com/.)
June 15, 2011
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