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Big Data Enhancing Insurance Sector

By Jason Lichtenthal, SVP, CIO, PURE Group of Insurance Companies And Natali Mohanty, SVP, Data and Analytics, PURE Group of Insurance Companies

Jason Lichtenthal, SVP, CIO, PURE Group of Insurance Companies

Big data is a very broad term and means different things to different people and industries. Broadly speaking, people have been using the four Vs: Volume, Velocity, Variety and Veracity. In the world of insurance, the V that matters is ‘Variety’ and by ‘Variety’ I mean unstructured data – data in the form of text, voice, images and there might be more. There are usually vast amounts of unstructured data in any mid to large sized insurance company that can be leveraged for creating value in the insurance world but has not been explored enough.

“We are actively exploring unstructured data in claims notes as well figuring out how to incorporate aerial imagery in our decision making”

We are actively exploring unstructured data in claims notes as well figuring out how to incorporate aerial imagery in our decision making. Some of these explorations require advanced technologies and to move forward quickly, we are partnering with smaller start-up companies who combine technology and analytics in a highly specialized manner. Combining our business knowledge and internal data with their specialized knowledge of how to deal with specific unstructured data and transform it into usable structured format gives us great leverage and speed.

How to consolidate, integrate and use Big Data to drive business

Data management is a whole topic by itself and the importance of this is usually underestimated. To be able enhance our data management capabilities is fundamental to timely business intelligence, gaining insights and taking action on those insights. Legacy systems are a big problem in many large companies and companies have to be forward looking to make investments in overhauling the systems. Many companies have embraced the ‘data lake’ concept to bypass large investments in time and money upfront and instead get quick access to data and let the data models evolve over time. However, even if data is difficult to access in the current situation, we can always create easier to access datasets by taking raw data from the data warehouse and combining data from different sources to create tables that we use regularly. This is more of a design issue where we proactively work backwards from what data we need to drive what to how we can get it in a timely manner.

Changing Role of CIOs

I [Jason Lichtenthal] have been the CIO here at PURE for just under two years, so describing how the role has changed is going to be difficult. What I can tell you is that because of my “newbie” status, I came in with a minimum of preconceived notions as to how the CIO of a growing insurance company should function. We are no longer comparing ourselves against other insurance companies – we are comparing ourselves against the best companies out there. Our job is to use empathy and creativity to be exceptional, to be a team player who is there when needed the most, to be obsessed with getting better, and to favor action over unnecessary bureaucracy. This philosophy has changed the way we conduct business, and it shows in both our 96 percent customer retention rate, as well as our Net Promoter Score (a measure used to gauge customer loyalty), which is among the highest in any financial services segment.

There is more of an appetite to take a look at “unproven” technologies than ever before. In the past, it was deemed too risky to look at the capabilities of a company that didn’t have a solid balance sheet, cash flow, and customer base. Today, if there is a solution out there that will help us gain a competitive advantage in some area, I’m interested. I’ll manage around the risks that come with up-and-coming business solutions.

It used to be acceptable to have long, multi-year projects to enable business transformation – in fact, most projects fell into that category. Those types of initiatives should be a thing of the past. They have a high risk of failure – whether going well over budget, significantly delayed timelines, or not delivering expected functionality (e.g., does it accomplish at least 80 percent of the business rules that were in-scope from the beginning, are you changing scope so your “needs” adjust to the capabilities of the system). These are ways to lose competitive advantage. Keep initiatives small and impactful. Find a structured way to understand, triage, and prioritize the ever increasing needs of the organization yet still allow for the flexibility of each team to creatively solve some really hard problems without clear answers. I believe success is not about the volume of work completed, but in consistently making sure the team as a whole completes what they’ve committed to with quality.

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