and tools make it possible to use both existing and newly available data to gain insights into existing claims, understand
operational metrics better, and produce and understand regulatory reporting data more efficiently.
Many insurers are beginning to give priority to information
automation over business process automation. But while the
move to new analytics may seem like a no-brainer, the journey
requires a plan. What is needed is a clear vision aligned to the
business strategy, supporting capabilities, and the fortitude to
embed analytical thinking across the organization—including
in claims departments.
A combination of improvements in information management
tools, data warehouse appliances, storage, and processing and network performance have enabled advanced analytics on massive
volumes of structured and unstructured data. This includes new
options for dealing with complex calculations on large data sets
such as high-performance information appliances, column-based
in-memory databases, and distributed computing tailored for data
processing. Analysis now routinely handles massive data sets with
millions of variables and billions of cases, increasingly in real time.
Real analytics represents a combination of information management, performance improvement, and advanced analytics.
Each of these capabilities has a number of critical underlying
technical implications for insurers, with interdependencies that
require an information architecture that spans the entire stack.
■ ■ Information management tools for establishing trusted
foundational data are essential. These include master data
management for maintaining data correlation and consistency of semantic meaning, providing matching services
to identify and link identical entities, and enabling bidirectional updates across systems of record. Data quality is also
a concern, requiring tools to profile, analyze, transform, and
monitor data. The management of data governance also
is needed and should be tightly linked with master data
management, data warehousing, data quality, business intelligence, and analytic solutions.
■ ■ Performance can be improved by combining historical reporting, business intelligence, and dashboards. Technical
implications incorporate report design, business rule development, business process integration, and the creation
of dashboards and score cards. Performance management
solutions also increasingly include mobile delivery channels,
either through web-based outputs or dedicated applications.
■ ■ Advanced analytics tools enable predictive modeling, embedding analytics into business processes, discovery, and
information visualization. This work typically involves
complex statistical modeling and the correlation of widely disparate data sets, requiring access to internal and external data.
■ ■ Complex analysis on large data sets requires high-perform–
ance computing. Options include on-premise appliances and
in-memory column-based databases as well as cloud-based
options for elasticity and distributed processing.
Keep the long term in view when taking
The insurance industry is shifting. The increasing demands of consumers and producers for higher levels of services and more access
through mobile devices and online portals will continue to force
insurers to advance technological capabilities. The most effective
insurers will develop a long-term strategy that incorporates trends
specific to claims. The longer-term view is essential to confirm that
all steps taken along the way achieve their intended return—
maximizing investment and reducing disruption on customers and the
claims department. Having this bigger picture in mind will facilitate the rollout of additional functionality over time.
Insurers whose long-term strategy includes visions of online
customer portals and access through mobile devices, for example, can add to existing capabilities in stages. This may mean
starting with something as simple as being able to submit first
notices of claims online and developing it to a capability for interactive tracking of a claim through its life cycle.
a Strategic, Holistic approach
Combined with proper management and training, investments
in technology can help an insurer increase operational efficiency
while supporting analytics and enhanced service. Replacing the
core claims-management system is a key component, but any
strategy also should include enterprise solutions and enabling
tools that support the overall claims process and provide the
required analytical capabilities. A strategic, holistic approach to
technology enablement not only offers a compelling cost-benefit
analysis for investment but also lays the foundation for future
KIRSTEN C. HERNAN, a fellow of the Casualty Actuarial
Society and a member of the Academy, is a senior manager at
Deloitte Consulting LLp in philadelphia and a leader in Deloitte’s
claims and risk management practices.
PIL CHUNG is a principal at Deloitte Consulting LLp in new
york, and leads Deloitte national claims and risk management
Gusman, Phil, “U.S. P&C Insurers See 2010 Net Income Rise,
Underwriting Results Deteriorate,” Property Casualty 360.com, NU
Online News Service, April 20, 2011.
This article is solely the opinion of its author. It does not express the official
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