Insurance Companies Swamped by Data
Insurance Companies Swamped by Data
April 11, 2007: According to Ernst & Young LLP’s Insurance and Actuarial Advisory Services, the insurance industry is struggling to meet data management and compliance demands.
Announcing highlights from its third Actuarial Transformation Roundtable in the US, the company says that there are growing concerns surrounding the governance and management of the constantly increasing volume of data the industry is required to maintain. Particularly regarding enhanced financial reporting requirements.
While it does not cite attendance numbers, Ernst & Young LLP says that out of the senior insurance executives surveyed, 88 percent agreed that “data management issues currently impact the ability to provide reliable, valid financial data.” More than half (56 percent) say they do not have a dedicated data governance team in place and 67 percent do not have a formal data management program.
“Companies need to engineer a culture shift,” explains Steve Goren, roundtable moderator and leader of the Ernst & Young IAAS Actuarial Transformation practice. “It is crucial to get everyone to acknowledge data governance and quality as key corporate priorities, and reflect this in their operating practices and processes.”
The company says that almost three-quarters (73 percent) of participants say the quality of their data needs at least some improvement and half acknowledge that their actuarial team spends between three and five “person days” per month correcting data quality issues.
The survey also highlighted a consensus among participants that valuation actuaries have become too tied up in data management activities, with too much reporting time spent analysing and explaining results.
“Just as critical as data input is output for analysis,” says Goren. “There is a significant opportunity for companies who transform their processes. They will not only enhance their data quality, but free up their actuarial department to focus on the area where they can truly add value… business decision support.
“Recognising that old problems will only multiply over time, insurers must clean up existing data and change their processes going forward.”
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