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Many P&C insurance companies have a long history and undoubtedly have a variety of legacy systems and reporting applications. Meanwhile, insurers are not only operating in a dynamic marketplace, with an increasing need to incorporate meaningful metrics into everyday decision making, but trying to keep costs down. How do insurers approach these seemingly polar opposite objectives? How can insurers drive information acceleration without spending large amounts of money or time to consolidate and streamline reporting?
Rather than a project approach, which can be costly and consume a large amount of resource time, we recommend creating a process to drive information acceleration, a predictive analytics tool, that becomes part of the organization’s culture. There are four principles that insurers may want to follow as part of this process.
Over time, as management changes, insurers can develop a large inventory of metrics. But which ones are the most meaningful today? With executive management support, an insurer may want to evaluate this question as the starting point to drive information acceleration. It should foster a common language around how the organization measures its success.
As technology is continually changing, organizations should think two to three years into the future when selecting a reporting tool as an organizational standard. However, the strategy deployed to streamline reporting should consider future needs to the extent possible. For instance, how do decisions made today affect the ability to change reporting tools in the future to meet changing demands? Will these decisions make it easier and/or less costly to migrate to a different reporting tool? These are the types of questions that should be considered when developing organizational standards.
Streamlining a company's reporting and metrics should consider standards that cover:
Where do we start? Our recommended approach is to look at what reports the business is currently requesting. This starts with the key metrics identified as part of the organizational standards. Also, what reports have the biggest impact and the widest reach to support the business and informed decision making? These should be made a priority. As noted in the first principle, this approach is a forward-thinking process that aims to develop an insight-driven culture. Often a project to streamline the use of a reporting tool doesn’t fully consider the business’ current needs; the focus is on the list of existing reports rather than what questions the business needs to answer, or what story needs to be told, to keep up with a dynamic and changing marketplace.
You’re probably wondering, how can simplicity possibly come into play? Legacy reporting environments often include duplicative data extraction and transformation. This developed over time, as technology matured, due to changing requirements for data aggregation, database platforms or reporting tools. The recommended organizational standards aim for simplicity via one set of data layers, each representing a business unit view (e.g., underwriting, claims). Each data layer should be consistent in how the model is designed. Each time a new report request is received, the existing data layers are reviewed to determine what information is re-usable and what may need to be added.
Up until this point, we have only discussed new reports. But what about the existing reports? As each new report is deployed using the organizational standards, the existing inventory should be reviewed. Given the new report, is the existing report still needed? How does the data differ (e.g., one additional field, aggregation level)? Should the effort be made to migrate the existing report to the organizational standard? Over time the organization may find many of the required existing reports share the same underlying data as those using the standards. At this point, the organization may start to make things more efficient by retiring the old extraction, transformation and reporting tools.
These four principles - operational standards, prioritization, simplicity/re-usability and efficiency - may provide the foundation for insurers to successfully provide their businesses with the information they need in order to successfully navigate the dynamic and changing marketplace, by inspiring a cultural change via an embedded process.
