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Focus on: Property and Casualty Insurance |
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Top business challenge: Growing revenue in a market where prices are declining for the same level of risk.
Solutions: Getting data out to agents in the field; developing new insurance products more quickly.
How I.T can help: Cleaning up legacy data and installing applications like data mining and BI.
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Dirty Data
Yet as any IT executive who has worked on a BI project knows, easier access to (and intelligence through) data requires a strategy to deal with "dirty data." Church Mutual Insurance Co. in Merrill, Wis., is building one to complement its new servers and applications for data warehousing and data mining. The $512 million firm has mounds of dated, inaccurate information, some of which was captured years ago on scraps of paper.
"We're working toward cleaning it," says vice president and CIO Chris Graham, who wants to have more accurate and complete data within five years. "We're developing a methodology to purify our data and identify what we can correct electronically and what needs to be done manually. Some things we aren't going to be able to clean."
Graham's efforts include developing a strategy to define business priorities and determine which sets of legacy data are critical for analysis and which can be tossed out. It also involves a Web-based questionnaire so customers can update their information themselves. "It's better if we get them to fix it," he says.
At $380 million American Community Mutual Insurance Co., a life and health insurance firm in Livonia, Mich., CIO Lynn Phillips is also in the midst of a big data warehousing initiative with a focus on data cleanup. Further, he's trying to update and replace or outsource outdated technology using hosted software, third-party agreements and service-oriented architecture (SOA). This approach offers the flexibility needed to meet rapidly changing demands; however, Phillips says it can be tough for IT to crank out new products, such as networks and policies, in the time frame the business side wants. "The business people have been pretty good at having ideas about the direction they want to go, but it's been a challenge for us," he says.
Still, Phillips says his IT group has come up with some fairly novel approaches to software for processing policies, deductibles and consumer-directed products and shrinking the amount of time it takes for a customer's application to become a policy (see An Insider View).
Merger Madness
Daniel Cerny, CIO of $130 million Security Mutual Life Nebraska Holding Co. in Lincoln, has had a harder time figuring out how to meet the needs of his business units. A recent merger with Lincoln Insurance Group Inc. has brought two different business cultures with reams of data between them under one umbrella. In this corporate marriage, there was no time for a honeymoon -- or even a courtship.
"Integrating and transferring all the data between systems has been a big challenge," Cerny says. "Not everybody gets the treatment they were used to in terms of getting what they want quickly."
Cerny says he would probably have an easier time backing up the business if he held a coveted "seat at the table." Before the merger, he did. Now IT isn't represented at the highest level. Industrywide, only 41% of IT executives report to the CEO, according to a June report from Forrester Research.
Another issue is that insurers are low spenders when it comes to IT, with only about 3% of revenue invested each year. But the business' needs are unrelenting. "Speed to market and nimbleness of business is the hallmark of what's required to seize competitive advantage," Phillips says. "The key to being successful is delivering innovative and exciting products at competitive prices."
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