This December, Novarica hosted a data governance Special Interest Group meeting in Jersey City, NJ. Many leading industry practitioners—some of whom traveled from as far away as Nebraska, Michigan, and Ohio—attended the event. Novarica presented the results of a joint 61-carrier survey of Insurance Data Management Association (IDMA) members. We had a very interactive discussion. Here are some of the more interesting insights.
Changes in data governance metrics
Our first topic was metrics and the declining use of ROI to justify investments—in general, as well as in data. Most carriers indicated that they weren’t tying data initiatives to a business outcome or ROI. An outlier at the event was a carrier that focused on direct distribution. The company’s laser-like focus on understanding customers for sales and marketing drove many of this organization’s data activities, enabling it to justify data and data governance expenditures with benefits in sales and retention.
Keys to a successful launch of a data governance effort
There was not much debate concerning this topic. The consensus was that senior leadership needed to be on board, as data governance efforts are 80% change management and 20% process. Organizations typically structure data governance as a top-down effort, identifying data owners who then nominate stewards. One participant, however, shared an interesting anecdote that flipped that model. This leading tier 1 identified influential individuals who cared about data first. It was then their role to work on data owners in the organization, getting them on board with an evangelical grassroots approach.
Complementing this approach was to identify an initial use case, the “beachhead” use case, to demonstrate feasibility and value creation. This step would, ideally, involve engaging a data owner whom other business leaders would want to emulate.
Building demand for data governance
It is vital to find leaders who know of solvable data quality challenges to lead the cultural change and evangelization effort. One carrier invited actuaries to discuss burning issues, which were, in this case, that they could not price property at the coverage level because the cause of loss was all coded as “other.” Claims determined that they captured cause of loss data at FNOL, too premature in the claims process to ascertain this information. Furthermore, the field was locked, and they could not make subsequent changes to this value. The organization updated the process and systems, data quality improved, and the story went viral within the carrier, creating demand for the data steward role.
Gaps in data security
Carriers at the event also highlighted areas that lacked data governance but were potential exposures. Many had realized that the unstructured data, such as claims notes, may contain significant amounts of regulated data—but they were having some challenges with the available tooling and their organizations focused more on structured data. Carriers also viewed outbound data as a vulnerability. One carrier noted that they were sending data to 300 partners for everything from fraud to medical bill review. There were no contracts in place with vendors in some instances, which exacerbated the issue.
Institutionalizing data governance
Several carriers were getting in front of data quality and governance by incorporating it explicitly in the development process. Some had updated their SDLC to incorporate data, some had developed a data-specific data development lifecycle, and others had employed a SIPOC model alongside their Agile efforts. Participants touted SIPOC as a useful tool for developing an MVP and identifying critical data elements, noting it is more effective for communicating with business leaders than data lineage, as the former provides useful context and business leaders may not have interest in the end-to-end data flow.
More information
It was a privilege to spend the day with this group of industry data executives and CIOs who viewed that ensuring data is trustworthy and accessible, yet secure, was critical to the success of their organizations. For more on Novarica’s thought leadership in data and analytics, visit https://novarica.com/data-analytics/
Add new comment