I have to admit, I'm a sucker for loyalty cards at the grocery store. It's a pretty simple and painless way to save a few bucks on everyday items, things that you'd buy every day like bananas, bread or peanut butter. The key is I don't have to skimp on quality to save money since I can get the same brand I usually purchase. In the insurance business, people grapple the quality versus savings equation when it comes to efficiency.
There was a time in the industry when the focus was mainly on getting more for less. Whether it was increased investment returns, more reporting output, or faster throughput of claims and other documents, insurers sought more from their operations. The "less" part of the equation was relatively simple – lower costs, less investment, and fewer people to manage the process.
But from my experience, "more" doesn't necessarily help insurance executives. Instead of simply asking for more, insurers today should ask for better – better reporting, content, documentation and investment returns.
To get to "better," executives need visibility and transparency to provide the proper insight that leads to more informed business decisions. Better investment returns come from a greater understanding of the risk and returns from portfolios, managers and securities. Better investment reporting means improved visibility across the organization and transparency within subaccounts to the security level. Better document processing comes from keeping the right data and managing the throughput more effectively.
[Previously from Vercellino: Getting the Truth of Investment Performance]
And it doesn't stop there. Availability is a critical component to efficiency as well, because questions that need answers now can't wait until tomorrow or next week. Boards and regulators demand answers today, in real time, which is driving the need for immediate access to data, reports, securities and holdings. They want it fast because it provides executives and managers with the ability to respond quickly to regulators, analysts and other stakeholders who need information now.
Executives and managers can turn to business intelligence (BI) to get the visibility want across a multilevel organization, showing data from different states, companies or product lines. BI provides transparency within business unit or product group silos as well, allowing users to dive deeply within their data to uncover key challenges and successes.
With visibility and transparency comes insight. BI can give executives and managers the ability to filter out all the extraneous information, or the day-to-day noise that comes from running a business. They're left with the most important part of the content – the actionable information that gives them the insight to make better, more informed business decisions.
Today's insurance managers and executives have access to more information than ever – customer data, product data, investment data, claims data, weather data, and a myriad of other data resources. But I've found that "more" is often the enemy of clarity. It's more efficient for managers and executives to leverage technology such as BI tools to cull through their data, determine what's important, and then act on the data with a clear, well-informed decision.
About the author: John E. Vercellino, AAM, AIAF, is vice president of product management for SunGard's iWorks Financials solutions. He holds the Associate of Automation Management and Associate of Insurance Accounting and Finance designations from the Insurance Institute of America, and is currently an Expert Level candidate in the Certificate in Investment Performance Measurement (CIPM) program of the CFA Institute.