INCREASE OPERATIONAL INSIGHT AND AGILITY FOR GLOBAL INSURERS
Data Governance for the Insurance Market | 2
Industry Pressure
Over the past decade, the insurance landscape has shifted dramatically.
New, “insuretech” insurance companies create pressure on traditional
insurers by threading the needle on the regulatory landscape and leveraging
technology and data to radically alter the customer experience, impacting
both retention and new customer acquisition of the incumbents.
Additionally, increased frequency and severity of catastrophes (not to
mention a global pandemic) are leading to a rise in claims, itself resulting
in increased severity for liability losses due to litigation. This, coupled with
historically low interest rates causing depressing investment income, has
created an urgent need to carefully manage capital to balance these risks
more effectively to fund innovation.
Business Impact
Investment Opportunity Cost Insurance companies collect insurance premiums from their customers and
invest those premiums to generate a return on investment (ROI). They invest
premiums that are beyond the required statutory capital reserve. Without
having real-time visibility on available premiums for investment can cause
the company to be under-invested, causing under performance compared
to their peers. Indeed, insurance companies require up-to-the-minute
awareness of the ebbs and flows of capital to drive investment decisions
and the lack of trustworthy or complete information to aid decision-making
creates significant risk.
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Regulatory RiskInsurance companies are highly regulated in each jurisdiction where they are
licensed. Regulatory requirements vary by state or municipality and include
capital reserves based on a ratio of revenue to assumed risk. It’s critical
that data supporting revenue and risk profile of the portfolio is available
on-demand, is accurate, and is maintained properly. Inaccuracy or delays
producing these critical metrics can lead to financial penalties, insolvency
declarations, and/or barred from operating in a given jurisdiction.
There may be large differences in the nature and definition of acceptable
reserves, which can make it tricky for companies, and their shareholders, that
operate in multiple jurisdictions.
Because statutory capital reserves
are dependent on premiums,
it is critical that each organization
has a clear understanding of
premiums through their life-cycle
- quoted, written, earned, net, etc.
Additionally, data security is
becoming an increasing concern
for the insurance industry. As
the regulatory, monetary and
reputational consequences of data breaches continue to mount, they are
now a significant business risk.
Customer Acquisition & Retention RiskThe insurance market is both highly competitive and highly regulated. Within
rating classifications there will be minimal differences in quoted premiums
between insurers. This places a premium on customer service. Lack of
fast, accurate and friction free engagement with customers during policy
“It’s critical that data supporting revenue and risk profile of the portfolio is available on-demand, is accurate, and is maintained properly.”
Data Governance for the Insurance Market | 4
quoting, policy management, claims management and billing can cause
customers to leave, or to select emerging Insuretech alternatives that
present a lower barrier to entry.
Why This Solution
Alation and Snowflake have defined a joint
solution to help global insurers to break down
silos, accelerate data governance and drastically
improve business performance.
Why Alation
The Alation Data Governance for Snowflake
solution combines Alation’s market-leading
enterprise data catalog platform with the
Snowflake Data Cloud, to power leading insurance
companies worldwide with a people-first, active governance approach that
enables decision makers to trust the data behind each analysis needed to
make critical business decisions rapidly.
Why Snowflake
The Snowflake Data Cloud is the leading Cloud Platform for the creation
of consolidated, actionable, and trusted information. It combines data from
policy, claims, billing systems and other data sources to help insurers drive
real-time analytics and reporting at scale.
Data Governance with Alation and Snowflake
Alation and Snowflake have a track record of helping global insurers
empower their employees to adopt a data culture by breaking down silos,
accelerating data governance, and empowering data governance leaders,
chief data officers and business executives to make better and more timely
decisions with data.
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These insurance firms realize business value with Alation and Snowflake.
These firms leverage the benefit of this combined data governance approach,
which takes a people-first approach and applies governance at the point
of data use.
Case Study
Austin-based Texas Mutual Insurance Company is the state’s leading
provider of workers’ compensation insurance. They serve over 40% of
the Texas market, and over 72,000 Texas businesses rely on them to keep
their 1.5 million-plus employees safe and on the job. Since 1991, the
company has provided a stable,
competitively priced source
of workers’ comp insurance
for Texas employers. Helping
employers minimize the human
and monetary consequences
of workplace accidents is a
crucial part of their mission.
Before partnering with Alation
and Snowflake, Texas Mutual’s
biggest challenge was enabling
its organization to leverage data
as an asset. Doing so helped Texas Mutual make data-driven decisions
to continuously improve claims outcomes and optimize premiums and
reserves during a time of rapidly changing factors affecting policyholders.
These factors include the opioid crisis and Covid pandemic, recreational
marijuana legislation, rising medical costs, and an increased volume of
complex claims.
To effectively manage their critical use of capital in response to such rapid
change, executives rely on a daily premiums report, powered by multiple
data sources, complex analysis, and metric calculations to understand the
company’s ebbs and flows of cash. But business leaders examining the data
had difficulty trusting the accuracy or understanding how information was
derived. This created delays as teams of staff evaluated and reviewed critical
information, robbing the leadership of their most valuable asset - time,
specifically time to make impactful business decisions.
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Winning Solution
To tackle these challenges, Texas Mutual has implemented a next generation
cloud-based analytics platform and Active Data Governance solution from
Snowflake and Alation. Combining data from 11 business domains and key
processes such as actuarial, policy management, claims, finance and the
like, the solution provides trusted, reliable data that executives rely on
to make in-the-moment decisions about how best to deploy capital.
The first iteration of Active Data Governance is targeted at premiums with
the goal to empower, enable and engage the business across other lines
of business.
In order to accomplish this the Active Data Governance process does
the following:
Establishes business ownership and participation in defining key business metrics such as premiums or claims
Classifies critical fields stored in Snowflake
Allows easy search, descriptions, business meaning for premium related fields in Snowflake
Catalogs and classifies premium related BI reports
Creates lineage for BI reports and fields so users understand the relationship between data and reports
Certifies premium reports based on data quality so business users can trust them and make business decisions with confidence
Establishes guidelines and standards for stewardship and premium related asset curation in the catalog
Metric 1 Metric 2 ... Metric N
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Reference Architecture
Achieved Outcomes
Working with Snowflake and Alation, Texas Mutual was able to unlock
decision-making to improve business performance, mitigate risk and
accelerate innovation. Here are some key success examples at Texas Mutual.
Shared Enterprise Premium DefinitionFor the first time, Texas Mutual has a consolidated view and definition of
the premium ‘life-cycle’ including, quotes, written, earned, billed, and net
premiums. This allows every business function to report consistently and
make decisions using the same, foundational understanding.
Business Critical Executive Decision SupportExecutive leaders are able to use daily dashboards and reporting with
confidence that the numbers are certified. This is vital in a business where
several critical inputs including healthcare trends, demographics, legislation,
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are changing quickly. This requires quick and accurate responses related
to the risk the company is assuming, its capital reserves, and investments.
Modeling AccuracyModels that show trends and predict the health of the business rely heavily
on types of premiums (written, earned, billed, net). Providing self-service
access to fully curated and defined premium data helps Actuarial and Finance
create models and perform scenario analysis. This impacts changes in pricing,
cash management, collections, payments, and other key business processes.
As a result of the above improvements, Texas Mutual was able to reduce
delivery time of essential business dashboards by 80% thus enabling senior
executives to make daily decisions on how best to deploy critical capital.
In parallel, the deep trust in the accuracy of the data that the solution
engendered largely eliminated the back-and-forth rework and forensic
analysis that often resulted from analyzing the underlying assumptions
and definitions behind the data.
Next Steps
Interested in learning more about how Snowflake and Alation together
empowers data governance success at your organization? Please click
here to schedule a 30 min call with your sales representatives.
“Texas Mutual was able to reduce delivery time of essential business dashboards by 80% thus enabling senior executives to make daily decisions on how best to deploy critical capital.”