The insurance industry is the most data rich industry in the world outside of the tech giants. Unlike the tech giants, however, the majority of the companies in the insurance industry are not able to leverage their data anywhere close to what could be possible in today's tech world. The call for the leveraging of Big Data can be heard throughout the industry, but the reality is the majority of these companies cannot leverage this data effectively because the information needed is often spread over multiple systems which cannot communicate, leaving their IT professionals to "Frankenstein together" work-around procedures which are often manual.
Policy systems, claims systems, ceded reinsurance systems, document management systems, and cash management systems have all grown in separate silos for years. Each department with slightly different needs require managing mergers and runoffs with duck tape and bailing wire. Companies end up spending money to fix these problems as they arise in an effort to plug a leak without the understanding that the boat's engine is significantly underpowered.
As p1 discussed in "The Enigma of Insurance Company Information Systems", a time and generational element has contributed significantly to these issues. We also discussed how M&A played a role in its creation. But Dr. Frankenstein's story demonstrates two important reasons there are so many stand-alone data management systems that cannot communicate with each other:
- Fear - Like the villagers with their pitch forks and torches, insurance executives and IT professionals truly believe that if you "awake the monster" (i.e. change the system), it will maul you with the potential of data loss, extensive training needs, and grip your employees with the general fear of change.
- Hubris - Dr. Frankenstein believed he was unique in his abilities and he could bring a monster to life. He learned that just because you CAN do something does not mean that you SHOULD. Most companies think of themselves as different than the rest, unique snowflakes in a sea of sameness. And they design software solutions to magnify that unique approach. In the case of software, a unique approach breaks down and causes a lack of interoperability. The mere fact that a company has the money to spend and the staff to build their own software doesn't mean this is the most beneficial path for that company to take.
Fear and Hubris can be overcome by partnering with people who know how to manage the monster as they have a hundred times before, via a data migration to a single interoperable platform which can easily work alongside continued technological development.
There are multiple reasons many insurance companies have ended up piecing together "monsters". The net result remains the same: an inability to harness the power of big data across the width and depth of all its disjointed systems.
See how p1 can turn YOUR monster into a platform of modern sensibility and taste, set apart through its innate ability to communicate fluently in many languages, while taming the big data animal within.