Sleep Tight, Data Light!  De-Risking Data: ‘Insure’ your Dreams are Free of Data Dread

Feb 22, 2024
6 mins read
De-Risking Data - ‘Insure’ your Dreams are Free of Data Dread

Getting ’Data Dread’ at night? Data nagging you in your dreams? A cold sweat trickling down your back thinking about completing your underwriting analysis, or that vital piece of lost information that could help you process a claim?

                                                                         Don’t worry. You are not alone.

If you work in insurance you will be used to dealing with risk. Helping others to de-risk their lives and businesses is satisfying - but what about you? Who’s going to help you to de-risk your work life? We all know the risks of mismanaging data, but should it be penetrating your dreams? If you are spending time (and losing sleep) managing the daily headache, worrying about that one DSAR that will cost you everything, or knowing that somewhere lurking in your data is that lost document that could cost your business millions…fear not - your dreams don’t need to become reality!

Reports of ‘data dread’ in the insurance sector are not uncommon – a sense of feeling overwhelmed, fatigued, intimidated by the amount of data to deal with, fear of the consequences of using incorrect data and, of course, worrying about keeping your data secure! No matter whether awake or asleep, these are the common concerns that demand attention for insurance professionals. And the list goes on – how that data or lack of control / clear oversight of it will impact risk management, underwriting, processing claims, as well as the vast amount of personal data associated with working in customer service...

In this, our first in the SimSights series on data in the insurance sector, we provide an overview of these key concerns, and later will delve a little deeper into the specific data risks and worries that should be taken into consideration, and how to deal with them.

Risk Management: How does Data Increase or Mitigate Risk?

We all know that insurance, is of course, all about risk. Natural disasters, cyber threats, economic downturns… are these nightmares or just another Tuesday working in risk management? The complex world of risk management often reads like a bad dream, and as an insurer navigating ever evolving risks, being proactive is a priority. When it comes to risk mitigation, harnessing the power of data will result in a holistic view of potential risks; enhancing decision making and helping to shift from reactive to proactive actions. However, proceed with caution! Whilst high quality data is powerful, low-quality data, a lack of governance and data integration will have a massive impact on how you assess the risk and can surely impact your bottom line if that risk assessment is based on incorrect data or data that you simply haven’t found yet.

Underwriting: What’s Data got to do with it?

The heart of every insurance transaction is underwriting. In today's data-rich environment, there are more challenges to consider than ever before to ensure fairness, accuracy and transparency. Incomplete or inaccurate data consisting of incorrect or out-dated information can cause havoc in underwriting, leading to errors which can hinder the decision-making process and, again, can prove costly to the business.

High quality data and efficient data integration is pivotal to being able to leverage effective data-driven insights, helping to refine underwriting practices, enhance risk prediction models, and optimise machine learning algorithms. A delicate balance between innovation, advanced technologies, risk mitigation and regulatory compliance must be found before achieving underwriting excellence – and data is crucial in getting this right!

Claims Processing: Finding Efficiency in a Sea of Data

Concerns around insurance data in the claims processing department often fall under efficiency – or lack thereof. The rise of AI, automations, and advanced analytics has done wonders to increase outputs, streamline processes and ease the workload of claims processors. However, many companies are still using out-dated legacy systems, aren’t addressing data security issues or  simply are not utilising the advancements in technology effectively.

This can particularly be seen when looking at analytics and predictive modelling, where insurers may face challenges in harnessing their full potential due to data silos, poor data quality, or a lack of skilled personnel. Using a solution such as SimSage Find, that can efficiently search across multiple systems to find the information you need, can remove this data headache.  

Beyond that, claims processing can turn a headache into a fully blown migrane. Significant financial losses are more likely as the more ineffective the data management solution, the more inefficient fraud detection will be – again and again and again.

Customer Service: Keeping it Personal

Privacy concerns over personal data are, understandably, a common topic of conversation no matter what industry you work in. Whether considering this in the context of GDPR, CCPA, or any other international privacy legislation, the insurance sector is particularly vulnerable to DSAR requests. But it doesn’t stop (or even start) there. The conversation becomes more nuanced and complex when working in insurance, especially when considering the large amount of confidential or sensitive personal information being handled about each individual customer.

One significant concern revolves around maintaining the delicate balance between leveraging customer data to personalise interactions whilst ensuring strict adherence to data privacy regulations. With the increasing volume and complexity of data being collected, insurers must prioritise data protection measures to not just safeguard customer information but to protect it from abuse - outside (and within) the organisation. All the time being conscious that the next DSAR coming down the line could be the one that sinks the company’s reputation.

Defeating Data Dread

Sadly – as with any other sector, there is no simple answer to tame the ‘Data Dread’ beast. There are however a number of steps that can be taken which address many of these data management issues. These require a holistic approach incorporating modern technologies, like SimSage, robust data governance frameworks and a commitment to continuous improvement in data processes and systems.

In the end, the only real insurance for a good night’s sleep is knowledge. Knowledge of what data is there, what data isn’t there and understanding what damage it can do and how to harness it. There are many ways to do this, but in the first instance the best way will be by using a powerful tool to find what you are looking for quickly and efficiently.

At SimSage we are aware of the risks of data mis-management and believe that employing a system that can help you find, audit and manage that data is the main way to ‘insure’ a successful approach to insurance data management – and a restful night.