Insurance: Strategic IT Investment Critical to Competitive Edge

Kevin Pledge

CEO and Co-Founder

Insight Decision Solutions

Kevin, welcome. What are your thoughts on strategic IT investment?

For companies that want to survive and thrive it is more important than ever. As companies look for efficiencies in this new economic climate they need to be able to identify what makes them competitive. Consumers are becoming more selective, more knowledgeable and the market may contract; companies that do not understand what makes them profitable and cannot relate this to operational and strategic decisions will not be successful. Business Intelligence is an investment for the future – critical for companies that want to grow and be profitable.

Goals?

Companies need to execute their business strategy with maximum efficiency and effectiveness, and make the smartest possible business decisions. This can be achieved with an enterprise-wide BI strategy incorporating functions such as financial performance management, source-of-earnings analysis, experience studies, sales and marketing reporting and operational performance. It is particularly important to incorporate planning and performance management with source-of-earnings as this enables companies to explain profitability in terms of impact of events such as lapse, mortality and morbidity.

What should companies avoid?

They need to avoid siloed analysis and decision-making; we often see decision-making at the department level being counterproductive as it is not possible to recognize the broader impacts. Companies need to operate as one entity, pulling together in the same direction with all business areas sharing information effectively and constructively. Companies also need to be careful of assuming that BI is a technology solution; it is about the business and the business model has to be at the core of any deployment.

New capabilities?

There are two critical developments in the BI space, the first is the ease with which multiple data sources can be combined, and the second is the integration of applications.

Companies will see the ability to rapidly deploy enterprise-wide analytics across multiple administration systems, integrating finance, actuarial, sales and marketing and operations. Integration of multiple systems is far less challenging from a technical perspective than it has ever been before due to data management technologies, such as SQL Server Integration Services, and data standards and documentation, such as those provided by ACORD. Integration of insurance specific applications is critical to the credibility of any BI system as this demonstrates the functionality of the system to the end users before the investment in the system is made and does not leave critical success factors to chance. It also means that applications can be shared across business areas, enabling them to work together and pull in the same direction.