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What should we provide as support for BI development and customized reports in the insurance industry?

    Ask The Experts published in DMReview.com
May 11, 2006
  By Sid Adelman and Adrienne Tannenbaum

Q: We are in the process of identifying new opportunities for business intelligence (BI) use in insurance, mainly in life and property and casualty in the area of policy administration, claims handling and underwriting. Can you consultants suggest what should be the next level as we provide support for BI development, and customized reports? Our group is also looking for trends and what a software vendor's expertise in BI/DW can do for an insurance company. We work on ETL as well as reporting.

Sid Adelman's Answer:

Property and casualty fraud runs about 30 billion dollars each year. Analysis and data mining could uncover much of this expense. The amount that's paid compared to what should be paid ("claims leakage") lends itself very well to BI analysis. Every dollar saved from a fraudulent claim or an overpaid claim goes directly to the bottom line. In both life and property and casualty the agent network is critical to sales. A BI application would help your organization understand your agents, both employees and independents, analyze compensation, bonuses and the affect of perks.

Adrienne Tannenbaum's Answer:

BI opportunities should be determined based upon the following assessments:

  1. What analysis is currently being done, specifically analysis that has the biggest impact on major decision-making. For P&C insurance, much of this is risk assessment. This assessment is often used to determine potential rate changes based upon a history of claim types, costs, and surrounding circumstances (geography, age, etc.). Providing data to support this major effort as well as the ability to create quick results would be a gold mine.
  2. The quality of your data - don't start advertising BI goodies if your data cannot be validated. Anyone who comes up with the wrong conclusions using your data will never come back
  3. How much value the data will actually provide in the grand scheme of things. If the true analysis is now being done via spreadsheet with data coming from "other places," maybe your next efforts should focus on information requirements gathering.

For more information on related topics visit the following related portals...
Business Intelligence (BI).

Sid Adelman is a principal in Sid Adelman & Associates, an organization specializing in planning and implementing data warehouses, in data warehouse and BI assessments, and in establishing effective data architectures and strategies. He is a regular speaker at DW conferences. Adelman chairs the "Ask the Experts" column on www.dmreview.com. He is a frequent contributor to journals that focus on data warehousing. He co-authored Data Warehouse Project Management and is the principal author on Impossible Data Warehouse Situations with Solutions from the Experts. His new book, Data Strategy, is scheduled for publication this year. He can be reached at 818-783-9634 or sidadelman@aol.com.  Visit his Web site at www.sidadelman.com.

Adrienne Tannenbaum is president of Database Design Solutions, Inc. (www.dbdsolutions.com), a New Jersey-based consulting firm specializing in the revitalization of corporate data. The firm focuses on data issues within large organizations and supports all data reconstruction efforts with a solid meta data backbone. Tannenbaum is the author of two popular meta data-focused books: Metadata Solutions: Using Metamodels, Repositories, XML, and Enterprise Portals to Generate Information on Demand (2001, Addison Wesley) and Implementing a Corporate Repository (1994, Wiley).

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