5 Key Questions to Ask About Your Data Program
The biggest buzzword in the insurance industry today is “data.” Articles and studies cite it as a top strategic mandate. Nearly every insurer and broker is laboring furiously to transform their business around data. Unfortunately, much of this labor is in vain.
In the effort to prioritize data, whether it be predictive or historical, bold pronouncements are issued. Uncertain of the purpose and goals of the data initiative, IT or some other part of the organization is entrusted to “seize the momentum!” But without a clear end state in mind, the organization’s capital resources, budgets and skill sets are stranded along the way.
Many readers are probably thinking, “Well, that’s not us. We know what we’re doing. Our data initiatives are progressing along just fine.”
But is this true? Has data been elevated to a strategic imperative? Is the data initiative part of the budget in each department?
If the answers are no, then the data effort is not strategic. The company is in thrall with the idea of a data-driven ecosystem, but doesn’t really have one.
All or Nothing at All
There is no one-size-fits-all solution, yet businesses still need to put forth a data initiative that has both long and short-term strategy value across the enterprise. This is what is meant by an “ecosystem”—a holistic community of interacting parties drawing from the same pool of data for the collective benefit of the organization.
Unfortunately, this desired state is thwarted by the way in which companies create and manage the data strategy. Typically a part of the organization like IT, the data analytics group, or operations is entrusted with articulating and developing the data initiative. However, when this occurs, the data strategy tends to benefit that particular silo of people and not the enterprise as a whole.
For businesses to transform into data-driven entities, all decisions must flow from the data strategy. This is paramount.
Finding the Magic
If data is the key to enabling insurance to provide more useful products to customers at more competitive prices, then what’s needed is a declaration by the CEO that everyone in the organization must put data first and foremost into the context of everything they do.
Here are a few questions to ponder to ensure your business is being driven by a real data strategy:
- Is data brought up in every meeting and conversation involving company strategy and tactics? Is it always on the agenda?
- Is the data initiative explained in the company’s recruitment materials and orientation sessions?
- Are products and services continually transforming to the dynamic insights produced by data?
- Is there a budget for data and is this budget allocated across the enterprise with accountability for expenditures and a return on investment?
- Is the CEO able to articulate to the team and to outside parties how data will transform the business and, by extension, the entire insurance ecosystem?
Honest answers to these questions are needed. Today’s insurance model has not changed in four centuries. The current paradigm is unsustainable in an era when Google and Amazon hold all the cards—the data along with the analytical know-how. These companies and other technology giants really are data-driven. The race is on. &