The Hype Around BI 2.0 Heralds Functionality Changes Surrounding Business Intelligence, Which Helps Insurers Gather Information to Make Business Decisions

The next generation of business intelligence tools will be integrated within business processes themselves, enabling improved forecasting and real-time data analysis.

While business intelligence encompasses many technologies and principles, at its core, BI's purpose is to unlock the information organizations need to drive business decisions. Already, BI initiatives help insurance companies predict consumer behavior, anticipate risks, understand distribution channels, identify growth areas, and adhere to legal and regulatory requirements.

Business intelligence is "the broad category of applications and technologies for collecting, integrating, storing and analyzing data, which in turn creates actionable information ... for the purpose of making better tactical and strategic business decisions," according to Sullivan McConnell, VP, enterprise business analytics, The Travelers Companies (St. Paul, Minn.; $113.76 billion in assets). Among the key components of BI, he says, are data extraction, integration and cleansing tools; data warehouse platforms; multidimensional analysis products; ad hoc query tools; and data-mining and predictive-analytic technologies. Of course, a key feature of BI solutions is the reports they generate to provide analysis, McConnell adds.

Though this analysis now happens in faster and more flexible ways than ever before, the new dashboards, scorecards and user interfaces associated with current BI solutions do not offer much more than their predecessors in terms of real-time intuition. If something unusual happens, a business user still cannot reorganize and react quickly enough to effect a change.

For that reason, the batch reporting that offers information in a historical, after-the-fact manner in current BI practices is beginning to give way to a new breed of BI that lives within the business processes itself. The idea is that with true insight on a day-to-day, hour-to-hour or even minute-to-minute basis, operational units will be able to act immediately on information about policyholders, plan administrators, claims agents, brokers, financials and events. In other words, real-time, cross-functional and multifunctional analysis can drive proactive strategies rather than reactive responses.

The concept of BI has not gone through any sea change since its inception in the relational database world, but experts anticipate a fundamental shift in BI practices. They point to recent research and development efforts and hype around "BI 2.0" as evidence of the expected changes in BI functionality.

With next-generation BI, users would have access to real-time data coming from within the processes of the operational systems themselves so that operational areas such as underwriting, marketing and fraud management could be informed about risk, illicit activity or cross-sell/up-sell opportunities in a more timely manner. After all, the less latency, the more effectively actions can be taken to affect outcomes.