Intelligent Decision-Making: Resolving the Monty Hall Problem

The television show "Let's Make a Deal" was a favorite in my household when I was growing up (do the math, you can figure out how long ago that was). My brothers and I loved the crazy costumes that audience members wore and the wacky items they offered to trade, hoping to catch host Monty Hall's attention. Even more entertaining was seeing contestants agonize over which box, door or curtain they should select - behind which could be anything from a car or mink coat to a giant can of chili or even announcer Jay Stewart dressed in a baby outfit. We often debated if there were any patterns or "sure things" that, if you figured them out, would guarantee winning a real prize. Sometimes it seemed like you couldn't go wrong picking Door Number Three. But you never knew when they would mess things up just by switching gears and making Door Number One the winner.

It turns out it wasn't just grammar school kids trying to figure out the system. Evidently a number of mathematicians around the world (no doubt, they also are Baby Boomers who grew up watching the show) have tried to resolve what is known as The Monty Hall Problem (www.letsmakeadeal.com/problem.htm) - basically, trying to figure out if there is an actual mathematical/scientific system for consistently picking the winning door.

Luckily for the insurance industry, when it comes to making financial and strategy decisions, we've come a long way in recent years. Thanks to technology innovation, there is an array of sophisticated tools available to insurers (and their customers) - including analytics, modeling, data warehouses, dashboards, mapping and networked storage - that can help them make intelligent decisions about anything from claims adjusting to underwriting to new product development to acquisitions. The decision-making process has become increasingly scientific and quantifiable. In fact, if there is a problem it lies in the very fact that so much data is now available and accessible, across multiple applications and lines-of-business - how can insurers effectively manage the multiplicity of data points and metrics across the enterprise without getting bogged down in data overload?

Starting with this issue of Insurance & Technology's special edition Connected Enterprise newsletter, we explore the challenges of achieving an integrated, "straight-through" processing and information management environment. We will try to answer a critical question facing carriers: What does it take to capture the right data and turn that into actionable information? With so much information available, how can insurers avoid creating a whole new set of silos and disparate resources?

In addition to the newsletter and the next edition of the Connected Enterprise supplement in the December 2005 issue of I&T, on Wednesday, December 7, an editorial Webcast will address the challenge of "Improving Decision-Making Via Real-Time Analytics." You won't find Carol Merrill behind the curtain, but to learn more about these offerings and what the industry is doing to achieve a more integrated and effective approach to decision-making, visit www.insurancetech.com/ConnectedEnterprise.

Katherine Burger
Editorial Director
[email protected]

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