Both the benefits and limitations of information were very much in evidence over the recent holidays, providing insurance executives with cautionary tales that they should heed in determining their future data management needs. For example, the airline industry showed that if there is a way to ineptly or improperly use information, it will find it. Delta subsidiary Comair blamed its computer systems (or rather, their failure) for the complete cancellation of its flight schedule during Christmas week. And, while the official cause of the US Airways luggage fiasco during the same period was baggage handler no-shows, clearly management was severely lacking in timely and critical data about personnel and their holiday plans. With more insight into the schedules (and attitudes) of its workforce, US Airways might have spared itself an operational meltdown and horrible publicity - and it might have spared its customers ruined holidays and awful travel experiences. If either of these two struggling carriers had any thoughts of rebuilding on a base of customer loyalty, they certainly can forget about it at this point.
Another illustration of the value of data can be found in the growing retail discipline of tracking customers' return practices and using that information to develop more restrictive policies on returns of purchases and gifts - a development that has created some tense moments for consumers during the holiday season. The retailers (including Best Buy and Express) that collect and analyze this kind of data claim that it's all in the interest of fighting fraud (e.g., stymieing someone who buys a dress, wears it to a party and then tries to return it, or thieves who try to return stolen merchandise), but executives in any industry familiar with the promise of CRM would recognize the attraction of trying to do more business with your most profitable (and least return-inclined) customers.
Finally, there was the devastating Dec. 26 earthquake and tsunami in the Indian Ocean. Geologists, politicians and victims will debate for years to come whether there could, or should, have been any kinds of detection, warning and communications systems in place. When seismologists were able to calculate and develop computer models of the scale of the disaster, the information was academic at best. A case of too little too late ... or an experience to be learned from?
Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio