June 18, 2018

Archie Anderson: Is the Insurance Sector Ready for Big Data?

By: Archie Anderson, President, Options & Choices, Inc. (OCI)

We are beginning to hear more about “big data” and opportunities on the horizon with the use of big data. The possibilities make me wonder if the insurance sector – healthcare, property/casualty and other forms of benefits – are ready for the potential economic and competitive advantages by analyzing large data sets – big data.

Big data? Just what is big data? According to the McKinsey Global Institute, big data refers to datasets whose size is beyond the ability of typical database software tools to capture, store, manage and analyze.

Data growth is outpacing traditional IT’s ability to manage it. And, the insurance sector has traditionally not made the investments in technology and techniques to unlock the power of the data they already store and hold. Of course, the insurance sector has captured the power and efficiencies of relational databases in order to process and manage any type of transaction. The latest innovation now includes moving this transactional data to the cloud – and cloud computing is simply a newer method of running traditional applications but now running them on someone else’s infrastructure.

Digital data is everywhere now – and the Internet has only provided a greatly expanded medium to share that data. Of course, most insurance information stored and utilized remains as heavy text and numerical data formats. However, studies show that upwards of 90% of clinical data generated in healthcare is now in video form – CT scans, surgeries, etc – and these digital formats require thousands of times more bytes than a single page of text or numerical data. Are the insurance payors ready for this transformation, when they desire ever more copies of the clinical data produced by providers in order to assess, evaluate and determine whether to cover or pay for those medical services?

The insurance sector is positioned to highly benefit from big data, but only as long as barriers to its use can be overcome. What are some of those barriers? First, the insurance industry’s data is highly fragmented. Underwriting data lies in systems disparate from claims, contracts and financial/accounting systems. Next, little insurance data is standardized – every enterprise has their own standards and each company wants their standard to be “the industry standard”. And, finally, data is stored in legacy IT systems that are both difficult to extract and is incompatible with other systems.

What can the insurance sector do to capture the potential value of big data? They should first inventory their data assets – yes, data should be viewed as an asset. Data policies need to be reviewed and updated to better enable sharing and access to data, while at the same time protecting privacy, security and intellectual property. New technologies and techniques need to be deployed in order to capture the value from big data – including storage, computing and analytics. New and additional talent is needed to understand the value in big data and how to unlock its value. And, companies need to integrate information from multiple data sources – they need access to data beyond their own – to enable transformative and economic opportunities.

So, is the insurance sector ready for big data? Some enterprises will continue to treat it as a problem and an operational challenge, continually throwing more storage at the problem and trying to contain it. Others will be more competitive and create greater growth opportunities because they choose to figure out ways to use big data and embrace the challenge that can, and I surmise, will be a more advantageous and successful strategy.

About Archie Anderson
Archie Anderson is President of Options & Choices, Inc. (OCI), a Denver-based software and data integration firm that helps companies make better-informed decisions about their human resource, employee benefit, risk management and information technology dependent programs. Anderson has over 25 years experience in the workers’ compensation, employee benefits and HR fields. Prior to OCI, Anderson served as President of Intracorp and in a number of leadership posts over an eighteen-year career at GENEX Services.

About OCI
Options & Choices, Inc. (OCI)OCI (Options & Choices, Inc.) is a software and data integration provider that helps companies make better-informed decisions about their human resources, employee benefit, risk management and information technology dependent programs.

OCI’s FastTrackTM Suite of Services offers data integration and software services to improve operational efficiencies and lower costs. Products include LeaveXpert™ – a total absence and leave management automation solution, claims data conversion services, and broad-based data management, warehousing and business intelligence for human resources, employee benefits, risk management and technology managers.

Using secure web-based applications, a flexible, client-centric approach and deep industry experience, OCI’s solutions transform data into information and knowledge, giving its customers the power to increase administrative efficiency, reduce expenditures and improve productivity.

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