IoE and the Insurance Impact
The Internet of Everything (IoE) and its impact on financial services and more specifically, insurance, is at its infancy. Many other industries are already taking advantage of data coming from historically non-communicative devices to make changes to processes, automate inventories and adjust the amount of water required for farming. As IoE proliferates within the insurance industry, there becomes an increasing need to connect data sources and virtualize that data. With more connected “things” than ever, data points can be utilized in different ways to provide better customer service, prevent fraud and develop new products. Because these new data points can change everything from a business model to product design, insurers need sophisticated software to manage them. All of these additional data points are on top of the explosion of data already in the industry – referred to as “big data”.
Insurers are now looking into software solutions that virtualize data and connect disparate sources around the firm to business intelligence applications that decision makers are using to look for specific insights. The opportunity won or lost will be determined by how well a business leader leverages their data to affect business value and obtain a significant advantage over competition. Data virtualization, a way of optimizing data from disparate sources, allows insurers and financial professionals the ability to manage big data and get updates in real-time without moving it from its original location. By leaving the data in its original location, it reduces the duplication of data when data marts and data warehouses are created for specific analytics applications (e.g. Customer Information File) and allows for other applications to easily access the data as well.
Business Capabilities and Uses
Recently, a large global insurer was in need of a solution that could provide a flexible but efficient data strategy that could allow everyone within the enterprise to create virtual data stores for everything from enterprise risk management to single view of their customers and turned to Cisco to implement a centralized platform for faster, more efficient access to data across the enterprise. An agreement for access across the enterprise enabled their business to use it as an “all you can eat” solution from a data virtualization perspective. Data virtualization is an approach that can deliver on the promises of the data warehouses of the past – enabling insights from the data stored in the transactional systems without the downsides of data duplication and expense of building and maintaining the data warehouse. But it goes two further, it can deliver the vision in a short time frame and updates in real-time. Historically to create the “single view of the customer”, companies would need to identify all of the specific data sources around the company that hold policy, interaction data, and sometime third party data and create an Extraction, Translation and Load (ETL) process (typically overnight) to move the data into the data warehouse on the customer. Creating a data warehouse, finding the data, determining a new data structure and consolidating the data would take more than a year in several situations, but with a data virtualization software solution, this is able to be completed in a matter of weeks.
Companies are now able to put together a single view of the customer, real-time portfolio views in the wealth management space and risk analytics in the insurance space in short periods of time and get updates to the data in real-time. Analytics applications benefit the most from the use of data virtualization because it provides companies the ability to add another data point, or data source easily as well as the ability to normalize the data.
Advantages of Data Virtualization
Data virtualization is crucial for business decision makers, because it creates an easier path to expose big data to analytics applications to provide meaningful, real-time insights they are looking for to help manage their business. Let’s use the single view of the customer as an example. When a customer called to report a recent change of address, the data would not be updated to some data warehouses for a period of time, many times waiting for overnight batch processes to update. Data virtualization allows for these data points to be updated and accessed in real-time by creating a pointer to where the data is, usually a last name or social security number. When the update occurs in the transactional system it simultaneously update in the virtual data warehouse.
With the expanding amount of “big data”, insurance and financial companies are in need of a software solution that allows their business leaders to make decisions in real-time to stay ahead of the competition. And with the coming wave of ever building data resulting from the Internet of Everything (IoE), data virtualization will be playing an ever increasingly important role. To learn more about how Cisco can further assist your business visit our insurance solutions page.