Creating Order From Chaos: Data Integration For The Insurance Industry

By Jamie Peers

In the digital age, insurance industry executives recognize that data is not just a static by-product of business operations; data must be used to optimize every aspect of the insurance business. Insurance companies collect and aggregate customer data through billions of interactions. That data can then be used to understand the customer journey and create new products, services and revenue streams. However, making sense of the avalanche of available data is far from easy.

The U.S. insurance industry is the largest and most complex globally, with net premiums totaling $1.28 trillion in 2020, translating to 7-9% of global gross domestic product. It also is one of the most regulated industries, governed by federal, state and even local laws. Today, 1.2 million insurance agents at nearly a half-million brokerages and agencies provide policies for a population of more than 300 million. As a result, the industry is a data-producing behemoth. The number terabytes of data produced and collected each day are astronomical.

Managing all that data is essential to digital transformation. For insurance companies, digital transformation is no longer an option. Insurers are rapidly coming to terms with the need to innovate and transform their businesses entirely — not just provide a digital front-end to give customers a better experience. The first step in digital transformation is to tame the data dinosaur.

Data Integration: The First Step In Digital Transformation

Although data integration is the first logical step in digital transformation, many insurance companies are hesitating. The question insurance executives face is “when,” not “if.” IT departments are overwhelmed by the complexity and cost of data integration, fearing the disruption caused by learning new tools and technologies. Furthermore, since insurance is a consumer-driven industry, executives must be laser-focused on making IT buying decisions that create customer value. Ultimately, there must be a value-add for the consumer as well as increased revenue and business value both in the short and long term.

To date, many insurance companies have made piecemeal investments in digital tools to modernize their operations. Now they find it daunting to integrate these tools and efficiently use data from different systems. Other companies are still encumbered with old, inefficient legacy systems, relying on them to continue to perform adequately or finding it nearly impossible to upgrade them to handle new data.

Insurance companies are adopting hybrid integration platforms to solve these complex issues. HIPs are designed to connect disparate data sources, providing data integration and automation tools that enable different departments to get the right data to the right person at the right time. HIPs help improve operations and make the consumer experience smoother.

For example, with a centralized data location, insurance companies can build automated workflows that speed up the onboarding process. Customers no longer must repeat information and the company maintains one master customer record, eliminating the problem of outdated, inaccurate duplicates.

The Value Of Data Integration In Insurance

One of the ongoing challenges with integrating customer data is the proliferation of systems and partners. Every partner has its own data system which has led to disparate sets of data. There is a variety of common issues:

Getting the CRM system to sync properly with the policy management solution.
Extracting policy data locked in archaic legacy solutions to gain data insights across the business.
Automating the rate/quote/bind process.
Extracting data trapped in operational silos to develop a cohesive data strategy.

The right HIP solution can optimize internal and external data, integrating siloed data into a single, unified view. Data from all systems and sources can be used to present an accurate dashboard of historical business trends and new opportunities.

Data integration can bring order and insight to every stage of the customer lifecycle. This allows insurers to understand what customers need, how they are engaging with offerings and how they can be better served. In addition to improving the customer experience, many insurance companies are structuring their entire organization around data. Having the right tools puts strategic data within reach of everyone within the enterprise.

To simplify data management, insurance companies also are embracing low-code/no-code solutions. Being able to drag and drop data connectors and steps into customized workflows eliminates the need for extensive programming knowledge. It also reduces costs by eliminating the need for developers to create and maintain workflows.

Choosing An Integration Solution

Digital transformation requires modernizing systems and integrating data, but some companies still resist change, preferring to try to upgrade legacy systems. Other companies are building new data management systems using proprietary platforms customized to their business, which can be expensive and consumes extensive resources. For most companies, a ready-made or customizable software platform package from a technology partner that knows the insurance industry is the best approach.

When evaluating data integration platforms, insurance companies must make sure that the tools are future-ready and can scale to meet changing needs. The functionality and cost savings should make it easier to focus on strategic areas of the business, and the IT departments need to see transformational benefits. The faster the solutions can be deployed, the sooner the business can benefit.

The goal is to apply data integration to power digital transformation. Unified data enables better business decisions and more powerful insights. Data integration can transform every aspect of the insurance business including customer relationship, new product development and, most important, generating business revenue.

Jamie Peers is the vice president of business development and alliances for Synatic. He may be contacted at [email protected].