| | March 20158CIOReviewThe insurance industry is at an important inflection point, and CIOs and information technology professionals are at the forefront of addressing three major trends: core systems transformation, leveraging big data technology, and the accelerating pace of innovation-driven competition. Core System TransformationInsurance companies across the country are implementing new policy and claims administration systems to create a stronger data/business intelligence foundation. By improving their policy administration systems, organizations are enhancing the way they design and maintain products, underwrite, interact with producers, sell to, and ultimately service their policyholders. If done correctly, the transformation can have a positive impact on policyholder, business user, and producer satisfaction. At the same time, increasing use of third party data and analytics can improve straight-through-processing and underwriting results.By introducing design efficiencies into the claims lifecycle, from intake to adjudication, organizations are improving their ability to meet regulatory requirements, reduce expenses, improve customer service, and streamline the overall claims processing framework. Similar to policy administration, the benefits of a successful claims transformation include improved operating efficiency and better claims outcomes by leveraging big data and enhanced business rules.With these types of transformation efforts taking multiple years, CIOs and information technology professionals are a critical component of streamlining the technology integration and achieving the desired ROI. In addition to guiding the selection of a solution that supports the business transformation objectives, IT can help guide the user community to reduce both configuration and customization by focusing on the key drivers of business value. Just as important is understanding how to best capture, manage, leverage, and provision data within the core systems to enable the analytics and decision making that are critical to profitable underwriting, efficient operations, and enhanced customer experience.Leveraging Big DataTechnologiesThe convergence of big data, advanced analytics, and an evolving understanding of habits and how to change human behavior through data enhanced "nudges" is quickly changing the world we live in. For insurance, underwriting predictive models have been used successfully for almost two decades. Personal lines, followed closely by the commercial lines of business, recognized the power of leveraging internal and external data to do a better job of segmenting and pricing risks. Less than a decade ago, insurance companies began using predictive models to attack the claim side of the equation. Running models at first notice of loss, insurers can attack recognized and unrecognized severity by aligning claim complexity with the most appropriate resources as early as possible.Today, insurance companies are attacking all types of challenges with big data and analytics: price/demand optimization, web optimization, agent segmentation, excessive opioid use, premium audit modeling, workforce intelligence, and more.But as some insurance companies found out the hard way, IT involvement is a critical component of developing models, building a scoring engine, and successfully implementing the models in a production environment. Data scientists may find a way to access internal and external data, but without the help of IT, it is almost impossible to bring the models to life in the day-to-day operation of the insurance company.Three Trends for Insurance Technology ProfessionalsBy Kevin Bingham, Principal and Dave Schmitz, Director, Deloitte Consulting LLPopinionin myKevin Bingham
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