As insurers grapple with how to convert data into customer insights, they often get bogged down in the costs and risks of replacing legacy systems.
In this Leading Insights article, Culture change needed to become a data-driven organization, we explore how an insurer can turn a vast cache of data into meaningful information by breaking down organizational silos and challenging the status quo.
Insurers’ struggle to employ data analytics is partly the result of their acquisitive nature, notes Gary Richardson, Insurance Analytics Lead, Data Insights Services with KPMG in the UK. “Insurers often grow by acquisition, resulting in a common brand with lots of individual companies and systems,” says Richardson. “Integration of legacy systems is often postponed if executives prioritize preserving portfolio margins and profitability.”
Although incompatible legacy systems make it hard for an insurer to achieve a single organizational view of data, they are a symptom rather than the root problem, observes Daniel Hodgkiss, Head of Customer Analytics, Data Insight Services at KPMG. “The underlying cause is often culture, with many insurers being policy-centric and therefore having systems that are more geared to a specific product, with minimal view of the customer.”
85% of leading companies struggle to accurately analyze and interpret their data.
Source: Going beyond the data, KPMG International, 2013.