RESEARCH REVEALS INSURERS STILL STRUGGLING WITH MANAGEMENT OF INFORMATION DESPITE GROWING REGULATORY DEMANDS
A significant majority of insurance professionals believe insurers are still struggling to effectively manage and access business critical information, according to new research(1) from EDM Group, the information management specialists. This is despite growing regulatory demands for insurance firms to be fully in control of their data estates.
EDM Group currently generates around 10% of its revenue from the insurance sector but because of the huge challenges facing insurers with regards to information management, the firm is forecasting a dramatic increase over the next three years.
Over four-fifths (86%) of senior insurance professionals canvassed by EDM said insurers are still faced with a number of barriers that hinder their ability to effectively access their data/ information. The majority (81%) blamed poor IT infrastructures and legacy systems for insurers struggling to access data effectively, with 17% citing a lack of digitisation and the same number (17%) blaming a proliferation of customer data feeds and communication channels(2).
Overall, a quarter (26%) of respondents said that the quality of information held by insurance companies is currently either poor or very poor. Only 1% said the quality of data and information was ‘excellent’, with one-fifth (21%) believing it to be ‘good’.
|On a scale of 1 to 5, where 1 is excellent and 5 is very poor, how do you rate the quality of data and information held by insurance companies?||On a scale of 1 to 5, where 1 is excellent and 5 is very poor, how well do you think insurers have coped with the raft of new legislation in recent years?|
|Source: EDM Group(1)|
The findings come at a time when regulators, investors and other stakeholders are demanding much better data management – and data validation – processes from insurance firms. However, only a third (33%) of respondents to the EDM survey said insurers had coped well with the raft of new legislation in recent years, while over two-fifths (43%) said poor information and data management had specifically had a very significant or significant impact on the ability of insurers to manage/ implement the huge amounts of new regulation they have had to face in recent years.
Craig Campbell, Head of Insurance Sector at EDM Group, said: “The data challenge for many insurers remains significant. The real concern is that too many have yet to get to grips with best-practice day-to-day information management as well as also adherence to new regulatory demands and standards. The proliferation of customer touchpoints, including the rise of social media, coupled with significant amounts of historical paper-based records have added to this significant information challenge.”
According to the research, around one in six (17%) insurance professionals believe that the quality of data and information held by insurers will improve ‘dramatically’ over the next three to five years, with half (50%) thinking it will improve ‘slightly’. Over a quarter (28%) think it will stay the same or even decline.
Craig Campbell continued: “The next three to five years will be critical in the evolution of the insurance industry, not just with regards to the regulatory burden but also how firms exploit the quality of their data for a competitive advantage.
“EDM is currently working with a number of insurers and we are seeing strong demand for solutions that help insurers simplify their data estates, particularly with regards to the digitisation of paper-based records. The management of such information is central in the wider discussion around ‘Big Data’ and the quality and accessibility of insurer data, which has recently been heightened by the January 2016 deadline for Solvency II.”
EDM Group provides companies with effective and efficient ways to manage the rapidly growing volumes of information flowing into and through their businesses every day. Clients include Legal & General, Friends Life, Bupa, Nationwide Building Society, Companies House, Lloyds Banking Group, Grant Thornton, Towers Watson, Ensign Pensions and numerous healthcare providers, including NHS Trusts and BMI hospitals.
(1) 153 UK insurance professionals, including insurance intermediaries, were surveyed online from 8th to 24th January, 2014.
(2) Respondents could select more than one answer