At last week’s InsurTech Summit in Sydney, a recurring theme during many of the panel sessions was: How can insurance industry stakeholders make the best use of data?
During the opening session, Engaging customers in a digital environment, the big insurance companies represented on the panel discussed their efforts to make data more accessible and, in the case of Jacqui Lennon, head of customer and digital, life & investments at Zurich Financial Services Australia, how they’ve now moved their data to a central system to facilitate this.
A data analytics expert has warned that insurers can face cost and time blowouts and customer dissatisfaction if they underestimate the data migration aspect of moving to new systems.
Will Erskine (pictured), general manager of PBT Group Australia, said insurers frequently fail to give data migration the priority it deserves. PBT Group is a data and analytics company with operations across Africa, Europe, and Australia.
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“It’s not just insurers that are underestimating data migration; it’s almost universal that organisations underestimate the data migration process and undervalue the data they have,” he said.
Other business impacts from poorly executed data migrations, he said, can include wrongly converted data creating customer-facing issues, regulatory problems, and flawed decision making.
When asked for examples of insurers underestimating their data migration process, Erskine said it would be “unprofessional to name names.”
“People play their cards close to their chest when it comes to project failures or major project delays,” he added.
However, he said it’s human nature to get excited about a new product.
“If you were buying a new car, you’d be excited to drive it but not interested in the logistics and shipping schedules involved for it to get from a Korean factory to a Sydney showroom,” said Erskine.
Fortunately, he said, when buying a car, all of that is taken care of for you. However, that doesn’t necessarily happen in a data migration project.
“When implementing new software, frequently the vendor will sell you the solution but with an incomplete roadmap to get there, or an implementation partner that contractually just needs to get the system up and running, with or without your customer data,” he said.
In a news release, PBT Group said it recently managed a complex data migration for a large specialist Australian insurer. The process included establishing complete data sets in a new system and archiving the old, but also maintaining ready access due to decommissioning of the existing mainframe.
Erskine said the complexity of data migration is historically driven by three key factors.
“The biggest factor is that data is not information – it can’t tell you what it means. If decisions were made 20-years-ago, the data captured can’t tell you what it’s meant to mean or why it’s structured that way,” he said.
Erskine said if you could ask the data a question, or ask the person who captured it a question, then migration would be a lot easier.
The second big issue, he said, is non-standard data formats.
“This is generally ‘free text’ where someone has captured information in blocks of text which may or may not be transferable to a new system in the same free-text format,” said Erskine.
The third factor is disparate source and destination systems.
“Data is often stored in a range of different systems, many of which may not have been updated in years, or the people who understand the data structures are no longer working in the company,” he explained. “When transferring between different software platforms, having an incumbent vendor who is losing the work can create additional challenges,” he added.
Erskine said there are red flags that insurers should look out for when they’re starting a data migration journey, for example: “Software vendors selling the sparkling dream without a genuine, viable roadmap on how to achieve it.”
Another important issue for insurers to be mindful of is the quality and validity of their own data.
“Does it all need to be transferred to a new system? Is it all relevant? Technology is only part of the solution. Business processes and approaches to implementation are a large component of data migration and the broader software implementation,” said Erskine.
However, Erskine said an insurer’s most important asset is information about their customers including their history, personal circumstances, and even simple information like their policy numbers and status.