Insurers struggling with data management

Increasing data management requirements are hindering the ability of companies to provide “reliable, valid financial data”, according to a recent roundtable conducted by the Insurance and Actuarial Advisory Services (IAAS) practice of Ernst & Young.

In the third Actuarial TransformationTM Roundtable, a forum for senior insurance executives, 88% of attendees agreed that, “data management issues currently impact the ability to provide reliable, valid financial data.” At the same time, more than half said they do not have a dedicated data governance team in place and 67% do not have a formal data management program.

“Companies need to engineer a culture shift,” explained Steve Goren, roundtable moderator and leader of the Ernst & Young IAAS Actuarial Transformation practice. “It is crucial to get everyone to acknowledge data governance and quality as key corporate priorities, and reflect this in their operating practices and processes.”

Nearly three-quarters of participants said the quality of their data needs at least some improvement and half acknowledged that their actuarial team spent between three and five “person days” per month correcting data quality issues.

Another issue was the heightened compliance expectations. The vast majority of participants agreed that the assumptions they use in their actuarial models constitute data that must be stored and managed. In fact, many acknowledged they are building meta-data repositories to hold information about existing data, such as how they develop their assumptions, in order to satisfy auditors.

“Insurers are fighting an ongoing data battle as they look to address who owns the data, how it should be maintained, who should have access to it and, most importantly, how to bring it together and integrate it in a way that will make it useful,” added Goren. “All of these issues relate to basic decision making and overall financial reporting and, if positioned appropriately, should gain C-suite attention.”