Despite hefty investments in data warehousing and business intelligence (BI), a Gartner report predicts that “through 2012, more than 35 percent of the top 5,000 global companies will regularly fail to make insightful decisions about significant changes in their business and markets.”
It’s time for us to make BI smarter.
The half-met promise of BI
When insurers spoke about BI, they expected accurate data that would be:
- Easily accessible and shareable.
- Specific, with the ability to drill down from summary to individual transactions.
- Actionable information that would provide insight for where and how to improve the business.
- The foundation for data-rich solutions across the enterprise, helping brokers, customers and operations.
Instead of this, many insurers are still generating static spreadsheets that provide little insight. Accenture believes that there are three main reasons for this:
- BI initiatives were based on technology, rather than information. Insurers need an integrated, governed approach to improving data quality and consistency—otherwise, they are simply enabling low-quality data to be gathered and displayed more efficiently, without any actual benefit to the business.
- Many BI systems adopted a siloed approach, rather than enterprise-wide reporting, so while individual functions can benefit from user-specific reporting, executives cannot gain a holistic view of the business to make more intelligent decisions.
- BI was viewed as an IT project, rather than a business project. This resulted in a lack of governance, poor data quality and lack of accountability to the business—and perhaps not surprisingly, the business is not using the tools available to shift from tracking to analytics.
The real promise of BI
The promise of BI is more compelling than ever, as a means for insurers to embed business insight into processes. The key is to enable a holistic view of the business to translate insights into action. From product development to claims, fraud detection to compliance, insurers can use BI to change and run their business better. For example, they can answer question like:
- What is the real rate change I am realizing from the recent pricing changes?
- Are my rate changes adequate for a given industry?
- Are the claim notices for my new lines following my actuarial predictions?
- Where should I be having my underwriters focus for submissions?
By adopting a data-driven, measurable and transparent approach, insurers can achieve a competitive advantage and high performance. Join me next week as I share three ways to make your business intelligence smarter.
To learn more, download Reaping the Benefits of Analytics: Six Ways to Make Your Business Intelligence Smarter (pdf; opens in a new window).