March 04, 2014

Insurance technologists, like their peers across industries, have been tasked with untangling the concepts of big data and analytics. The buzzy terms have taken over not just tech circles, but seemingly the entire corporate enterprise, as all business units look for solutions to tap into the supposed wealth of consumer and market information that provides a competitive advantage.

Establishing data management standards and expertise, and understanding data warehousing, are key projects that insurers must complete before they can tap into the wealth of available data, says Susan Helm-Murtagh, VP of analytics at Blue Cross and Blue Shield of North Carolina (Raleigh, N.C.; 3.7 million policyholders).

Susan Helm-Murtagh, Blue Cross and Blue Shield of North Carolina
Susan Helm-Murtagh, Blue Cross and Blue Shield of North Carolina

"The thing that isn't being talked about when people talk about big data is the importance of data management," she says. "If we don't understand data certification and standardization, how to build data models and exchange data with an increasing number of partners, we're going to have problems."

All companies struggle with reaching a consensus on the definition and scope of big data, as well as where to begin and its potential applications. But insurance companies have always, in a way, been stewards of big data, industry experts say. And so for many insurers, the journey to an analytic enterprise begins at home, in using newly available technologies to build a framework around that data."

There are huge stores of data that are not well-structured at insurance companies. There's lots of forms and documents exchanged," says Adam Kornick, business leader for big data and analytics at Progressive (Mayfield Village, Ohio; $1.2 billion in premiums written, 2013). "I think the ability to take all of that and make predictions based on that is something that previously wasn't feasible."

That's what's been going on at Imperial Fire & Casualty (Opelousas, La.) for about seven years, says COO Duane Heady.

"The insurance industry is overwhelmed with information. Many of us are just data junkies; we can't have too much," he says. "But much of the data that companies are dealing with is legacy data that is difficult to handle, and you're limited in what you can do with it."

[Can legacy stand in the way of big data and analytics innovation?]

Imperial decided about seven years ago to build a data warehouse to get all its data on a common platform. But that turned out to be the easy part. From there, Imperial struggled with an inability to gain in-sights from its data, Heady explains. "We invested heavily in our IT systems, and we certainly had the data in our ware-house and we knew it would be good. But extracting that data could be difficult. You had to go through a query and set up a report," Heady says.

And those reports lacked redundancy, he adds. Each business unit had unique needs from the data, and even within units, different users had different ideas.

"A lot of our folks like to look at things a little differently. You had all these reports with the same information, but they weren't uniform," Heady says. "People within the organization, depending on where they are or what department they fall in, might look at the data in a slightly different way."

So Imperial recently completed implementations of a business intelligence dashboard from Domo and analytics software from Innovation Group, to help it get effective insights from the stored information. It's an existential project, Heady says.

"I had the sense that in order for us to compete, because we are a smaller regional carrier, we aren't going to win on size. Many times we're competitive on our relationships," he says. "All those small details make the difference between companies that are profitable and not profitable. We can grow also through acquisition, and with what we've implemented, we can take on additional companies and settle them into our tech, utilizing our tools and resources."