The focus on data is increasing for small businesses like insurance firms—but understanding the challenges and strategies to manage ownership, process, and infrastructure are key. Read on to see what Information Management says are just a few opportunities with a master data management approach.
Insurance master data is critical to operations and frequently crosses functional and line-of-business areas. Because of the siloed nature of the insurer’s application environment, master data management (MDM) is necessary to ensure consistency across platforms wherever accuracy is paramount. Yet beyond operational data usage, MDM is growing in importance to keep up with a proliferation of analytics and external demands.
Insurer investments in data and analytics are increasing. Novarica research shows that over 70% of insurance carriers have deployed or plan to deploy predictive analytics, and over 40% have deployed or plan to deploy AI. These initiatives, which improve the quality of business decisions, are dependent upon MDM for governed, quality data.
Beyond analytics, high data quality is imperative for digitization where data is being exposed to outside parties. According to recent Novarica research, budgets are starting to shift away from core applications and toward digital engagement that enables self-service. Redundant, incomplete, conflicting, and inaccurate data will come to light without master data management. This is especially true in areas like understanding producers and the products they sell, consumer preferences, and marketing automation.
Regulatory change is requiring that carriers take greater care in their use of data. Security regulations are expanding on a state-by-state basis and are sometimes insurance-specific, many of which require understanding where and how data is used. Personally identifiable information (PII) and health-care data are of particular importance, as is knowledge of where data exists, what its permitted uses are, and access control.
The focus on data and mastering data is expanding, and with it comes challenges around ownership, process control, and infrastructure, among others. For more on master data management including best practices, challenges, and trends, see Novarica’s latest brief, MDM in Insurance: Expansion and Key Issues.