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14 August 2019

Data transformation in Insurance: Building a case for change

Stuart Whaites

Stuart Whaites
Director | Insurance| London

In the second in our series of blogs focusing on data transformation in General Insurance, we examine what is required to gain support, investment and cross-functional collaboration when mobilising a data transformation programme in Insurance.

Joining. One small word. One critical word when considering dipping one’s toe into the soup of Insurance data. Sadly, for the more technically minded amongst you this will not be a foray into the vagaries and elegances of particular inner, outer or cross SQL joins...  

In our experience, there are five critical ‘joinings’ required to establish the support and foundations for a large-scale data transformation.

1. Joining investment to tangible business outcomes

Many insurers have long and painful memories of large enterprise data warehouse projects from the 90’s which promised to solve everything. At an exorbitant cost. At a glacial pace. Unsurprisingly most failed. The lesson here is to start small, pick a particular business outcome you are trying to achieve and price up that element only, rather than attempting to solve everything at once  

2. Joining up the business case

Reducing operational cost, improving loss ratios, driving top line, honing distribution, freeing up working capital, reducing regulatory exposure. All have a valid place in a data transformation business case. Picking and focusing on the right elements for your benefits case will be dependent on your business outcome. Making sure the business case is joined up with key stakeholders in Actuarial, Finance, Underwriting and Claims is critical to ensure both buy-in and that the benefits can actually be measured

3. Joining functional priorities

Strategic priorities within functions are often different, as are their needs and expectations of data. Technical Pricing Actuaries will want the most granular ‘transactional level’ records, whereas Finance will want various aggregations that reconcile to the General Ledger. Choosing your customer is key. Pleasing them all straight away is not possible. Engage, gather, then join together the various functional priorities to determine your initial priorities and associated delivery roadmap

4. Joining data strategy to real world delivery

Data strategies can sometimes have the habit of appearing either highly obscure or ethereal in nature. Translating your strategy into a delivery plan with clear milestones may not be ‘sexy’ or ‘bleeding edge’, (dare to whisper Waterfall) but it is essential to ensuring stakeholders stay with you through the journey. Traditional delivery plans with key milestones give confidence in progress and help avoid the pitfalls of disappearing into a black hole surrounded by jargon and complexity

5. Joining the delivery team

A delivery team needs to have the right mix of skills with a singular focus on delivery outcomes to succeed. Specialist data developers, software engineers, and architects on their own wont. The key is joining these skills with people that have a deep understanding of Insurance, and shaping the delivery to ensure the outcomes meet the business need. Data is an asset for insurers to harness therefore, it is prudent to make sure the team delivering that data understands how insurers want to harness it and what outcomes they are trying to achieve.

As we have explored, building the case for change around an ostensibly intangible subject is hard but not impossible. Joining together is the key. Watch out for the next blog in our series focusing on Data Architecture.