Tag: Business

Insurers: 5 ways siloed data hurts your bottom line

Data silos not only create obstacles to effective operations, but can also directly affect your bottom line. Listed below are five common issues associated with siloed data and ways to avoid them.

1. Creates a dependency on inefficient external reporting applications

Multiple platform architecture complicates the reporting process. While third-party reporting tools can be used to analyze data across multiple systems and produce unified reports, there are costs incurred. Forrester reports that nearly half of all data professionals spend at least as much time prepping data as they do analyzing it. This inefficiency worsens in cases where reporting reveals a need to modify how data is captured or organized, forcing analysts and IT resources to trace data all the way back to its original source and then make changes.

In some cases, third-party reporting tools can also create a gulf between those who master the reporting technology and those seeking answers from the reports. In a recent interview, Christopher Ittner, chair of the accounting department at The Wharton School, discussed how this division affects the business process:

“What we are finding is that in a lot of companies, there are great data scientists and great business people but what is missing is business people who know enough data analytics to say, ‘Here is the problem I would like you to help me with.’ And then they can take the outcome from the data scientists and see how they can best leverage it. That is where we must get to in the next couple of years if we want to take advantage of the digital technologies.”

Providing users with direct access to reporting that requires no prep work solves both issues. End users can become their own data analysts and answer the business questions that apply to their work. Without the requirement to master the technical process of assembling, scrubbing, and joining data from multiple systems, reporting becomes more efficient, effective, and scalable.

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To build or to buy? Q&A with Origami Risk’s Steve Schmutz

Steve Schmutz is a successful entrepreneur with an extensive technical background and more than 20 years of experience in software design and implementation. He has founded and run two software companies, including Origami Compliance (formerly, ClaimWire, LLC), which integrates with any claims management system to provide automated workers’ compensation forms, compliance resources, and regulatory information.

Q: Why is the “build or buy” question important to consider?

A: The “build or buy” decision isn’t limited to software. It’s a question that has been around forever. Homeowners evaluate whether to pour their own patio or have a professional do it. Budding artists wonder if it would be best to create their own website or have a more experienced web designer do it. But when it comes to enterprise software, the stakes are much higher than many other situations. Making the wrong decision can cost millions of dollars and put your project years behind. We’re talking about the type of mistake that can, quite literally, take a company down.

Q: Where should an organization begin?

A: They should start by creating an exhaustive requirements list. Making the build-buy decision before knowing its requirements is like arriving at the airport before knowing where you’re going. The list should be as thorough as possible. Creating this is absolutely worth the effort. Doing so provides a true picture of the scope—breadth, depth, and length—of a project. Without an understanding of these details, it’s impossible to make an informed decision.

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How ERM technology helps financial institutions address Matters Requiring Attention (MRAs)

Complying with Bank Secrecy Act/Anti-Money Laundering (BSA/AML) regulations is a major challenge for financial institutions. Those found with deficient practices are subject to receive a Matter Requiring Attention (MRA) notification. The Office of the Comptroller of the Currency (OCC) states, “MRAs communicate specific supervisory concerns identified during examinations in writing to boards and management teams of regulated institutions. MRAs must receive timely and effective corrective action by bank management and follow-up by OCC examiners.”

This combined requirement of timeliness and proof of effectiveness makes delivering an acceptable response particularly challenging. Unfortunately, MRAs are not uncommon. The article Get to Know the “5 Cs” — BSA Matters Requiring Attention notes, “Most banks receive some sort of finding or ‘Matter Requiring Attention’ (MRA) or ‘Matter Requiring Immediate Attention’ (MRIA) regarding their BSA Program during a BSA exam.” Given the likelihood of receiving an MRA, and the burden associated with the response, developing a robust process to handle them is essential.

This post will examine how the right Enterprise Risk Management (ERM) system is uniquely suited to not only help efficiently and effectively respond to the challenges associated with MRAs, but also (when properly configured) help minimize them.

To understand how this is possible it is useful to “learn from the mistakes of others.”

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Carriers: Single platform advantages and reducing TCO

Insurance carriers that rely on multiple-vendor application stacks to manage core functions such as policy management, billing, and claims administration may be placing limits on the strategic advantage IT departments can offer. As the number of supported vendors increases, more IT resources are forced to focus on managing application stacks rather than identifying and developing competitive technological advantages.

An Ivanti survey analyzed in The CIO’s Conundrum: Can IT Move From ‘Keep the Lights On’ to Creative Thinking? underscores the tension between maintenance and innovation. “In this survey, what became crystal clear was the counterbalancing of maintaining essential IT services with the desire to be bold and to act as a creativity dynamo.” Matthew Smith, President, Demand Generation at IDG Communications, notes that the survey results indicate that organizations “need to liberate their CIOs to think ahead of the curve rather than obsess over day-to-day operations. But today IT is all too often still regarded as a support function or information leaders are too stretched to drive competitive differentiation.”

Sandra Gittlen writes in Whittle down application sprawl, “out-of-control application stacks can jack up costs, introduce vulnerabilities, add to infrastructure complexity, jeopardize licensing and waste staffing resources.” This pulls resources toward the maintenance side of the spectrum and away from the strategic side. Glitten concludes, “IT’s value is not in supporting technology, but in understanding the business and using technology to achieve business goals.”

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Looking to launch an ERM program? Borrow ideas from startups

Implementing an enterprise risk management (ERM) program can be a daunting, intimidating project. Trying to introduce new frameworks and controls across the organization, roll up risk reporting from the unit to enterprise level, and initiate discussions with the board that lead to action can be overwhelming. Using techniques proven to work with startups, however, can make the process far more manageable and increase the odds for success.

Startup incubators often promote a few common themes:

  • Let customers/market dictate the product
  • Scale it down – start small and go live fast
  • Do the research and learn about the market
  • Get feedback as quickly as possible
  • Fail silently – incorporate lessons learned without dragging the whole effort down

These techniques suggest that the traditional high-profile, enterprise-wide rollout of a new ERM program may not always be the best way to launch. Instead, focusing on the smallest scale project—one with the potential to yield meaningful results—and relying on a customer-driven approach may be the key to creating a sustainable, effective ERM program.

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Growing your business through analytics — Getting started

A recent article, “Transforming into an analytics-driven carrier“, examines best practices in what is a multi-stage journey that requires equal parts business and analytics leadership. The end goal is an organization where:

  • Data-driven decision making is the standard
  • Analytics is central to claims adjustment, underwriting, and pricing processes
  • Analytics drive the entire business, functions are better integrated, and organizational silos no longer exist

The transformation is also dependent on having the right technology in place in order to begin to get buy-in and build momentum as a strategic vision for the organization is implemented. As a McKinsey Quarterly article puts it, companies must begin to build a foundation which enables change. “People have been talking about data-driven cultures for a long time, but what it takes to create one is changing as a result of the new tools available. Companies have a wider set of options to spur analytics engagement among critical employees.” For carriers still looking to move off of core legacy systems that struggle with modern requirements, even starting down the path to becoming an analytics-based insurer may seem out of reach. read more

Finding added value in RMIS: Business continuity/disaster recovery

Munich Re reports that 2017 was the second most expensive year for natural disasters ever recorded, with overall global losses estimated at over $360B. For the U.S., last year’s severe storms resulted in a share of losses that was significantly higher (50%), than the long-term average (32%). A recently published Business Insurance special report cites estimates of insured losses of $15.4B–with $12B caused by inland flooding–stemming from Hurricane Harvey, alone.

Ernst Rauch, head of Munich Re’s Corporate Climate Center, holds that these patterns are likely to continue. “We have a new normal. 2017 was not an outlier.”

A quick look at the weather on the first day of Spring seems to underscore that point.

  • Businesses in the mid-Atlantic and Northeast expect to be digging out from the fourth winter storm in 3 weeks.
  • High winds and hail are causing damage across the Southeast.
  • Flash flood watches have been issued by the NWS in parts of Southern California.

Is your business prepared for the “new normal”?

With large-scale natural disasters becoming increasingly common and more costly, a renewed focus on business continuity and disaster recovery is essential. Preparing for these events, along with the ability to rebound from them, are a factor on which businesses must now be able to compete. read more