The rapidly accelerating needs of organizations to better understand and predict consumer preferences and behaviour, using larger and less structured data sources, are causing these organizations (including insurers) to adopt new enterprise models and to appoint leaders with new titles and broad responsibilities.
As we recently noted, management of data is a critical success factor for insurers in 2012. We called it a ‘megatrend’. Seems that this extends well beyond insurance. A recent Globe & Mail article on big data reported that Scott Thompson, the newly appointed president of Yahoo, was pledging that data would be the key to his new company’s future just as it powered his last company (PayPal). Thompson said, “I am certain that the battle of the next generation of Internet businesses will be made up of who has more data and who knows how to use it better than anyone else.”
Moreover, Thompson indicated that the data needs go well beyond traditional market segmentation and groups, extending to the individual level. “I’m not talking about your classic segmentation stuff,” he said, “It’s the segmentation of one and what the data of one tells you.”
Seems that insurers are coming to the same conclusion and are appointing senior managers at the enterprise level to take responsibility for consumer data and analytics. As reported in Insurance & Technology, Lincoln Financial has created a new group “dedicated to capturing quantitative and qualitative information about consumers that can better inform product design and distribution decisions.”
Kristen Phillips, SVP of Strategy and Marketing, noted that “Lincoln Financial recognizes the need and value of expanding our definition of the consumer to be more multi-dimensional – to include our end consumer. Clearly understanding the behaviors and decisions of consumers will be valuable to our advisors and partners, as well as driving product positioning and innovation, which will help ensure Lincoln’s solutions meet the emerging needs of current and future consumers.”
Recently, Chartis Insurance named Murli Buluswar to the newly created position of Chief Science Officer. In a recent interview with Insurance & Technology, Buluswar noted that the creation of the role came from the Chartis CEO Peter Hancock. “He has had extraordinary success by harnessing the power of data to drive results. He had the vision to build this team of top-notch business thinkers and research scientists to forge a path forward in strategy and business impact, while having a positive impact on society more broadly,” Buluswar said.
The CSO role has broad, pioneering, proactive aspects. According to Buluswar, “The use of data analysis in the insurance industry has tended to be focused on the actuarial side of the business, but the opportunity is much broader than that. It can be applied to how you manage marketing, distribution, customer experience, underwriting decisions — it has a place in every function of the insurance enterprise.”
These organizational appointments will likely continue. In a recent blog post by Joe McKendrick in Insurance Network News, reports on a conversation that he had with Jim Kobielus, Forrester Research’s data guru:
The rise of “data scientists”: Having specialists that can help insurers make sense of all the data coming in – whether they’re called “data scientists” or merely “quants.” Jim sees more of these specialists in organizations, handling challenges from building multivariate statistical models to predictive modeling to developing data mining approaches to look for hidden patterns in historical data sets.
If nothing else, this megatrend will reduce the unemployment rate of math majors.
Analytics is a key theme at the 2012 Insurance-Canada.ca Technology Conference. Join your colleagues on March 5, 2012 in Toronto.