The four drivers of productive data in the London market are accountability, confidence, compliance and effectiveness. If there is an issue with incorrect data, it needs to be flagged and fixed before it causes a market-wide storm
Weatherman Michael Fish recently blamed the Met Office Computer for his failure to predict the infamous 1987 hurricane. That computer was capable of making four million calculations a second, whereas nowadays it is capable of 14,000 trillion calculations a second – when the winds pick up now, the Met Office has the data at its fingertips to accurately forecast where it could hit.
The London Market is generating data at an exponential rate. However, an error in one department can still impact the overall business, or even further afield. If there is an issue with incorrect data, it needs to be flagged and fixed before it causes a market-wide storm. Businesses must have data confidence to avoid this scenario.
Most business leaders for London Market carriers would agree that data has long been one of their most valuable resources, alongside their capital and their people. And the significance and applications of data are increasingly daily.
The current debate in insurtech is around how data generated from emergent technologies such as Artificial Intelligence and the Internet of Things can be harnessed alongside existing carrier data to produce new insights on risk, pricing and customer engagement.
At the same time, the laudable Lloyd’s and London Market Target Operating Model (TOM) aims to drive and expand data sharing initiatives, getting to the heart of a dynamic that will help the London Market remain competitive on the international stage.
However, a clear prerequisite to this is the necessity for quality data that cost-effectively helps carriers meet regulatory needs, as well as supporting emerging innovation initiatives.
Granted, the ‘data as oil’ analogy feels outdated. Perhaps a better metaphor would be to view data streams as the wind driving a turbine – after all data is ubiquitous, but it is only productive when harnessed correctly. Seen through this lens, the four drivers of productive data in the London market data turbine are accountability, confidence, compliance and effectiveness.
Emerging technology, data sharing and contributory databases help insurers to better understand risks and settle claims as well as reducing workload – quite simply, data is a key resource for both individual businesses and for collaboration in the market as a whole.
Confidence is key – what about third parties?
Each of the individual businesses that make up the market must be confident that their internal data streams are driving their business as effectively as possible, in order for wider market collaboration to be successful. At the same time, each business must also have confidence in their third party data and shared data.
Third party data can be inconsistent and challenging to monitor, yet simple errors can have a deep and far-reaching impact on overall data quality and confidence. Ad-hoc methods are no longer suitable or sustainable – confidence can be increased by 24/7 monitoring/checking with alerts and workflow prompts when potential issues are detected.
Surely it is time that we question the sense of using manual, people- intensive methods and spreadsheets to check for data errors often created by other people and spreadsheets?
Leading London Market (re)insurers are already embracing data accountability and ownership, with evidence of data quality increasingly seen as a key performance indicator for a business. This together with smarter workflow and increased transparency is pushing ownership of data to the business end of the company, where it rightly belongs.
We applaud all the efforts that have taken place with data already to meet the market’s minimum standards, perhaps a sensible next step is to modernise the market’s approach to making this happen.
Downstream data risk
There is a clear downstream risk to incorrect data, particularly when a company shares data that others rely on to make decisions and forecasts. Making sense of, and keeping track of increasing data volumes is crucial to success – data must be right first time, every time.
For data sharing and a culture of collaboration to become part of the London Market institution, it is imperative that each party takes ownership and responsibility for the data they are bringing to the table. If one company’s data is incorrect, it will adversely impact everyone else’s data, potentially leading to a market-wide storm and significant regulatory implications.
Of course, if everyone had a culture of data accountability and had 100% data confidence, there would be no issue. In the meantime, an automatic data monitoring platform that checks both internal data and 3rd party data before it is accepted must be the smart way forwards.
Third party data risk must be carefully and strategically managed, with business-side users empowered with tools that allow them to find, flag and fix any issues at source,
before they grow into bigger issues further down the chain.
Data drives everything. Better data will drive a better business. Do you have data confidence?
DQPro is a market-driven platform, developed in response to demand from key London Market players. Book a DQPro Demo now.