Data Strategy
With data accumulating at an increasing rate, a well thought out and documented data strategy is key to managing and making the most of the data collected. At our 12th annual Novarica Research Council Meeting, we met with dozens of technology VPs and CIOs in the industry to discuss best data practices. One carrier noted that a strong data strategy begins on the business side, stressing that data needs to be tied back to a desired business capability or solve a business problem. Another CIO observed successful strategies are created when business owns their data and is accountable for it. With such an opaque ROI, the value of data and analytics may be difficult to convey, however, executive sponsorship early on is key to its success.
Predictive Analytics and Risk Scoring
Another topic of discussion was predictive analytics. Participants in the break-out session remarked on the challenges, use cases, and competitive advantages that the capability offered. CIOs discussed the possibility of regulatory intervention when predictive analytics were used in the risk scoring processes. Most CIOs working with the technology spoke about using it to limit the number of Underwriter touches, improve straight through processing, application prefill, and prioritize submissions. Other use cases discussed included using predictive analytics to better classify risk for submission prioritization and decreasing the number of application questions. Some carriers mentioned the challenges behind the technology. Predictive modelling and especially machine learning require significant amounts of data, and certain lines of business simple don’t have enough data points. CIOs discussed ways to overcome resistance in the adoption of predictive analytics. One CIO did this by publishing the duration of submissions and number of Underwriter touches by region and comparing those numbers to those utilizing predictive analytics.
Data Lakes, Warehouses, Marts
CIOs in the room were also interested in how others were implementing and managing their data lakes, warehouse, and marts. Most agreed that self-service needed to be supported but guard rails or “sandboxes” need to be created. Carriers discussed how data pools could spawn and how reports may not mirror the data correctly. CIOs that felt their capabilities were mature attributed it to their use of data governance. Having somewhere for data scientists and others to experiment was key to maximizing the value of data.
Our research shows that data strategy and governance need to be well thought out and inform each other. With the improving ability to collect more and more data, laying a framework early on is key to improving access and gaining maximum insight. If you would like to discuss more on data and analytics, feel free to send me an email at [email protected] or visit https://novarica.com/council/ to learn more about Novarica’s CIO Research Council.
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