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Information You Can Act On

Achieving business intelligence requires insurers to take disparate data and link, consolidate and transform it into actionable knowledge.

By Peggy Bresnick Kendler

This Month's Experts


Vice President, Customer and Market Intelligence, Chubb Group of Insurance Companies, Warren, NJ


Vice President, Product Marketing, Cognos Inc., Burlington, MA


Manager, Information Management and Distribution, Zurich North America, Schaumburg, IL


Chief Technology Officer, Crystal Decisions, Palo Alto, CA

Q: How do you define business intelligence? Does it have to do with systems and strategies, or is it more conceptual?

A: Jeff Hoffman, Chubb: Business intelligence at Chubb is defined by its actionable utility. In the back office, raw data is consolidated, transformed, modeled and served up in the front office to business users as meaningful information. It is delivered on platforms that are easy to use and which directly support targeted business initiatives, such as prospecting and underwriting risk assessment.

A: Karen Williams, Cognos: Business intelligence (BI) is a software solution that enables companies to analyze data that resides across disparate databases and provides a consistent information environment for fact-based decision-making. Organizations that leverage their business information with BI can increase operational effectiveness and gain competitive advantage in both bull and bear markets. Some BI vendors also fulfill the concept of corporate performance management (CPM). CPM, as defined by Gartner, encompasses the methodologies, metrics, processes, and systems used to monitor and manage business performance.

A: Ted Balzano, Zurich North America: At Zurich, business intelligence is the combination of processes, business rules, and technologies that take raw data, organize it into meaningful and actionable information, and deliver it to the right people at the right time to support business decisions.

A: Tony Wind, Crystal Decisions: Business intelligence, very simply, unlocks the value held in the insurance firm's disparate data banks and systems by turning it into information and knowledge, and then delivering it to whoever needs it, when they need it, where they need it, and the form they need it in. This supports their daily operations and workflow while enabling them to make better decisions.

Q: What are the key technology challenges in a successful business intelligence initiative/strategy?

A: Hoffman, Chubb: The "heavy lifting" in any business intelligence initiative is related to turning data into information. Identification of optimal data sources, extraction/transformation/load (ETL) processes and data quality audits make up around three-quarters of the effort. Integrating and deploying software tools to deliver the intelligence are less-challenging aspects, in relative terms.

A: Williams, Cognos: Companies in all vertical markets and industries face many of the same challenges before implementing a business intelligence solution, including uniting disparate and legacy sources across the company; data accessibility, integrity and security; ease of use for the non-technical business user; and enterprise-applicability and scalability. In addition, the insurance industry deals with its own unique challenges,including increased competitive premium pricing from new industry players, convergence and globalization; fragmented customer and transaction processing systems; standardization of business processes; and increased government regulations regarding customer privacy, fraud detection and prevention, and demutualization requirements.

A: Balzano, Zurich North America: For us, the primary technology challenge with business intelligence has been the ETL process. With multiple business types, platforms and data stores, we've encountered our share of challenges in building our consolidated repository. In addition, without properly building the data schema, platform architecture and insuring data integrity in the process, the delivery of the information is nearly impossible and it will not provide much value for decision-making.

A: Wind, Crystal Decisions: One of the most challenging tasks is taking this disparate data and linking, categorizing, consolidating, and interpreting/ transforming it into actionable information and knowledge. Then, it is crucial to deliver this via a simple user experience so it is accessible and usable to the common business users. Finally, it is extremely important to have a mission-critical BI system infrastructure in place in order to ensure availability.

Q: How should insurers determine what to build versus what to buy in terms of BI? What technologies are available to help achieve business intelligence?

A: Hoffman, Chubb: If you are in the early stages or just beginning to develop business intelligence capabilities, it would be wise to engage third-party experts with skills related to data architecture, data modeling, ETL and BI tool development. At the same time, you should be thinking about hiring or training individuals within your firm to work with vendors and receive transfer of knowledge in these critical core competencies. As much as many software firms will sell their solutions as a place to "one-stop shop" for all business intelligence needs, firms would be best served by weaving together a software architecture of "best-in-breed" tools.

A: Balzano, Zurich North America: When considering a buy-versus-build strategy, insurers must consider the commonality of their needs. Certainly, front-end delivery tools and database platforms are fairly common and should be bought. Many front-end tools are highly customizable and can easily fit any organization. The ETL tools become more difficult to simply buy. This will depend on number of source inputs, platforms involved and the complexity of business rules.

Q: Once an insurer achieves a certain level of business intelligence, what can it do with the information?

A: Hoffman, Chubb: Business intelligence is a journey that never ends. As meaningful information is delivered, more and more requests for new intelligence surface. In a successful business intelligence effort, most business users gain access to information that they have never had before. This serves to stretch their thought as to new types of information that would help them make better business decisions.

A: Williams, Cognos: Business intelligence provides customers with a consistent information environment for fact-based decision-making. Organizations use business intelligence to increase operational effectiveness and gain competitive advantage. Insurance companies use business intelligence to gain visibility into claim processing cycles, risk management and customer relationship management.

A: Balzano, Zurich North America: The ability to measure and analyze your core information allows you to adapt to the ever-changing insurance landscape more quickly. You can better understand your markets, customers and the products driving your organization's profitability. You can provide information to external customers, creating self-service abilities. And the better you can analyze your company's loss information, the better you can control the largest expense to any insurance company. Business intelligence creates substantial new possibilities for the organization.

A: Wind, Crystal Decisions: The insurance company can start turning data into actionable information to reduce costs and grow revenue. For example, once all the information is gathered about customers, and their experience with the various touchpoints/ interactions with the company (e.g., service centers, call centers, mail, agents, Internet, etc.), along with the products they own or intend to buy, it can then be analyzed to make better business decisions. A business executive can be presented with an interactive exploratory view of this knowledge and can use it to determine the profitability of customers, or where realistic up-sell/cross-sell opportunities exist, or where the agent network needs incentives or different product mixes, or to define operational policy where transactions take place within the lowest-cost touchpoints.

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