Got ‘Clean Data’?

“Big data” and the age of digital transformation are drivers for increased competitiveness and growth in many of today’s industries.  And, businesses are now faced with the challenges of effective management and analysis of that data to support their objectives and serve their stakeholders. Companies with the most effective plans and methods to administer and analyze information, and find opportunities for increased productivity, all while providing information security are better equipped to maintain a competitive edge.

Historically, data management has been a cumbersome process that struggled when implemented because of inconsistent systems and human error.  This reality coined the phrase “garbage in, garbage out”, which both recognizes and laments the notion that data analysis is only relevant if based upon clean information that is properly entered.  And, in the case of property and casualty insurers, good data and reporting provide better daily task management and are critical for the complex modeling and actuarial processes for proactive forecasting and managing the insurance cycle, including reserves and LAE (loss adjustment expenses). When data is properly managed it can also bring an element of control in business practices.  As management consultant Peter Drucker famously said,

 “It is not possible to manage what you cannot control, and you cannot control what you cannot measure.”

True control of forecasts and costs in the insurance industry, especially in P&C, remain a difficult process since there are exposures that can dramatically change the environment, such as storms, social changes, terrorist activities and financial upheaval.  And since the product of a property and casualty insurance carrier is based and priced on future estimates of costs that have unidentified risk, insurers must be good at predicting and managing those liabilities.  Since the industry is moving away from broad estimation forecasting toward accuracy, it has a growing need for the data and reports to support finer analysis strategies. The opportunities that software automation provide can be critical to better control and improve analysis for forecasting, especially for high liability expenses such as LAE and reserving.  These analytic tools can lead to better outcomes for both day-to-day operational health and in the inevitable case when a catastrophe strikes.  

 To support these goals, there are methods and solutions to address three important challenges for property and casualty insurers:

·       Standardization of back office functions for cost and time savings.

·       Data management that allows accurate forecasting and growth.

·       Critical tools needed to protect vulnerable information.

Standardization of back office functions for cost and time savings

The first challenge is to provide task standardization, accuracy and ease to back office functions.  Today’s software automation systems are designed for finer control in the management processes with day-to-day automation functions for accuracy. It also supports reporting for long-range “holistic” business planning.   By providing systems that marry ease-of-use data entry as well as validation functions to “flag” problems, the need for excessive manual inspection of now standardized tasks is reduced. There is also a realized reduction in costly, time-consuming mistakes, such as duplication, overpayments and late remittance to third parties.

Data management that allows accurate forecasting and growth

When properly implemented, these functions provide opportunities to save time and contain costs, but they also allow remedies for the second challenge by providing tools for analysis, more accurate forecasting and report preparation. Since the product of a property and casualty insurer is based and priced on future estimates of costs with both identified exposures and unidentified risk, insurers must be good at predicting and carefully managing their business.  By automating back office processes to better support forecasting, high liability areas such as Loss Adjustment Expenses (LAE) and reserves can be more accurately viewed and planned.

Critical tools needed to protect vulnerable information.

Today, hacking vulnerable systems is epidemic. This third challenge is a growing global problem and it has become necessary for any industry trusted with confidential information to provide security. The industry is moving away from the use of unsecured email, fax transmission or other vulnerable portals when dealing with personal information because it is universally acknowledged that easily accessed systems will be compromised.  And these security changes can be additionally supported with thoughtful integration of secure automation systems that have secure backup, cloud technology and mobile access for both easy implementation and to administer protections against lost information or security breaches.

Integrated solutions that provide ease-of-use and a validation process to support critical goals are quickly becoming the new normal for P&C insurers for all the reasons stated.  Along with the efficiencies of time and costs savings, providing support for the critical functions of long-range analysis and allowing greater information security, there is yet a deeper benefit for the insurer.  Automating, standardizing and securing critical processes and information also provide greater opportunities to serve today’s consumers who value, and reward those who provide faster, competitively priced, and more easily accessible products and services.

VIP Software is a leader in property and casualty insurance software solutions that provides innovative products and outstanding service and support for success.  Adoption of enterprise software solutions is seamless and predictable, so insurers see a positive return on investment, increased opportunities for profitability and ease of integration with existing partners to leverage the current technology investments.