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TDWI Upside - Where Data Means Business

Executive Q&A: Data, the Cloud, and the Insurance Industry

From integrating data silos to creating strong customer experiences, the insurance industry is facing a host of challenges. Venkitesh “Venki” Subramanian, vice president of product management for enterprise solutions at Reltio, spoke to us about the results of the company’s recent survey of the industry.

Upside: Let’s start with a little background about your survey. Who participated and why did you focus on the insurance industry?

For Further Reading:

How Ethical AI Is Redefining Data Strategy

How a Small Insurance Firm Uses Big Data to Level the Playing Field

To Unleash Data Potential, Enterprises Need to Fully Embrace the Cloud

Venkitesh Subramanian: Our Insurance CIO Mega Trends report surveyed 100 leaders from insurance companies across North America. More than two-thirds of respondents represent organizations with over $1 billion in revenue. Most respondents (64 percent) identified as working in information technology and data management within the insurance field. The report is based on a survey conducted by WBR Insights of 100 technology leaders from insurance companies across the U.S. and Canada; 29 percent of respondents are C-level executives.

When it comes to tech challenges, what are insurance leaders most concerned about?

The survey showed top insurance leaders are facing aggressive business demands and formidable challenges across various dimensions, including the following:

  • Shifting customer purchase preferences
  • Evolving customer loyalty linked to innovative product offerings
  • Increasing pressure on classic operating models
  • Balancing improved customer relations through data with increased protection and privacy of personal data
  • Requirements for increased automation and intelligent operations

These give rise to a number of technology challenges. However, one of the largest challenges insurance companies face is the siloed and fragmented IT landscape. It is not uncommon for an insurance company to have a dozen or so systems for policy management, claims management, or other key processes across various lines of business, leading to data discrepancies, inefficient operations, and inconsistent customer experiences. 

How does cloud-native technology address these challenges?

By 2025, over 80 percent of enterprises will adopt a cloud-first strategy and total expenditures on cloud technologies will surpass $1.5B according to a Gartner study released in November 2021. The cloud is not a choice but a necessity to keep pace with the innovation and deliver scalable solutions fast to support business needs. This accelerated cloud adoption will create further fragmentation of the data landscape, but it will also create unique opportunities for organizations to leverage cloud-native solutions to solve data management challenges. The use of cloud-native databases such as Amazon’s DynamoDB or Google’s Cloud Spanner, cloud native integration, data lakes, and machine learning capabilities provide the ability to create highly scalable, real-time data management solutions.

Reltio has been a trusted partner for insurance companies as they manage customer, policy, and claims data across disparate legacy systems. By using a cloud-native SaaS MDM offering, businesses can unify and cleanse multisource, complex core data into a single source of trusted information -- in real time. Insurers can gain a complete view of their customers so they can pivot from policy-centric operations to customer-centric operations. API-led, easy integration with the partner ecosystem allows insurers to launch new innovative services and drive growth faster. 

How do master data management (MDM) practices and solutions currently support the insurance industry specifically? Are there opportunities to improve MDM for these industries?

Companies spend significant amounts of money on their digital transformation efforts. It is imperative CIOs and CDOs ensure these initiatives are successful by supporting them with the right technology and data. CDOs are concerned about the data complexity and the threat of disruption from newer digital-native Insurtech startups.

Many insurance companies leverage previous-generation MDM technologies or have built their own solutions to create a single view of their customer data, along with related information like policies and insured assets. Unfortunately, these systems are unable to keep up with growth; they are unable to deliver the data with the speed and accuracy required. Moreover, they’re often inflexible and costly. A modern, flexible MDM solution is needed to solve these challenges. 

The survey participants emphasized the need for strong customer experiences for business success and customer retention. How does customer experience factor into the development of MDM tools and services in general?

For Further Reading:

How Ethical AI Is Redefining Data Strategy

How a Small Insurance Firm Uses Big Data to Level the Playing Field

To Unleash Data Potential, Enterprises Need to Fully Embrace the Cloud

To deliver a seamless omnichannel customer experience requires real-time access to customer data across systems and channels. The most successful MDM services create this real-time data abstraction layer for customer data and related information. 

A good example of this is when a leading insurance company wanted to provide multi-policy discounts and encourage customers to bundle policies, helping them save on their premiums while driving revenue growth for the insurer. Due to a fragmented landscape of policy systems, this was challenging. Now, using cloud-native MDM tools, the insurer’s teams are better enabled to not only consolidate customer and policy data into a single system, but also to provide real-time access to data through its online quoting system and call-center systems.

Many insurance providers see MDM as an important tool for digital transformation. Why are insurance leaders prioritizing data management rather than other innovative tech such as AI, robotics / automation, cybersecurity, and virtual assistants?

Insurance companies are not prioritizing MDM or governance initiatives over AI or robotics/ automation. Rather, they are realizing that without the right foundational data, these investments in AI or automation do not yield results. Some also find they are spending too much time and money in fixing data issues within those initiatives. The right data with the right quality is essential to the success of any of these initiatives and this is driving investments in technologies such as MDM.

What approaches do insurance executives plan to use to improve customer experience, reduce data silos, and achieve business goals?

As insurance companies work to become digital leaders, we believe there are three key areas that will drive their success:

Mitigate data management challenges. Insurance companies seek solutions to defragment customer data, break down silos, and gain greater visibility into overarching pools of enterprise data. Our survey showed that although many respondents believe a customer data platform is useful for marketing purposes, most agree MDM is a better solution for end-to-end organizational visibility.

Analyze and predict market trends. Companies turn to data and analytics to gain insights into the insurance market and customers’ needs. They can then combine those insights with their internal analytics to identify areas for innovation and operational improvements.

Use data and analytics to improve customer experiences. Insurance companies use the insights gained from marketing and customer data to deliver new digital customer experiences and operational excellence. They deploy self-service capabilities for their customers and increase automation in the claims process, where appropriate, to speed up claims and deliver faster results for customers.

How do you expect the insurance industry to change within the next five years? What solutions do you expect to be the most impactful?

Insurers will continue enabling more advanced digital experiences and automating more tasks. Five years back, submitting claims through apps might have been considered innovative, but customers now expect it. Insurance companies will continue to introduce innovative products and services powered by technology.

Do you think the results of your survey, specific to insurance, easily translate across other industries?

Many of the trends we see in the insurance industry and the priorities that result are applicable to other industries. Companies are investing in driving growth by improving marketing and sales effectiveness, improving operational efficiency, and reducing risk and ensuring compliance. These broad trends are applicable to not only insurance, but other industries, too.

What survey results surprised you? Why?

For the most part, the survey results confirmed the trends we have been observing across several industries while talking to our customers and prospects. Although the results largely met our expectations, we were surprised by the extent of these trends. For instance, 82 percent of respondents said fragmented and siloed customer data poses a challenge when attempting to deliver seamless customer experiences. This shows the scale of the problem that companies are facing and validates our strategic focus on providing solutions that unify data across the enterprise and enable critical business initiatives for growth and efficiency.

If you could conduct another study, what would you investigate now?

We plan to investigate industry trends in other industries such as financial services, including banking and wealth management. We’d like to better understand the shifting priorities of CIOs and CDOs based on the current global economy and get a handle on their plans for supporting profitable growth for their organizations.

[Editor’s note: Venkitesh “Venki” Subramanian is vice president of product management for enterprise solutions at Reltio. In his role, Venki serves as a product management leader to create data management solutions for various industries and use cases, and to develop go-to-market strategy and implementation approaches to deliver faster time to value for Reltio's customers.]

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