The power of data in delegated authority
With digital firmly embedded in our day-to-day and organisations looking to utilise AI, the significance of data has not been so apparent since the Big Data era of a decade ago. However, data in isolation is not the answer to all our problems. To use data effectively, we first need to understand why we need it and what we hope to achieve. Let’s consider the endemic organisational and talent challenges delegated authority needs to overcome to get the most out of its data.
Removing data silos
Too often, individual departments will hold data that is not fully accessible by other departments. This might be natural when you consider finance, HR, marketing and other teams need different information to do their jobs, but there will always be areas of overlap. That’s why we need greater collaboration, with underwriters, operations and data scientists working together to solve data problems and helping the organisation work more effectively.
Adjusting expectations
Data standards vary across a business, yet organisations are often too keen to acquire ‘perfect data’ before they make a business decision. In reality, perfect data does not exist and DA is no exception, so there will always be some risk involved in devising your strategy. If the data’s good enough, why not go ahead and automate processes?
Introducing common industry data standards
There’s a lack of consistency in the way data is stored, processed and managed in DA. This is exacerbated by coverholders and carriers using different data entry systems, resulting in no standard taxonomy to categorise data, so around 50% of bordereaux data can be lost at the point of ingestion.
Inconsistent formatting and lack of understanding between carriers, coverholders and MGAs mean that carriers don’t trust the quality of data. There’s also far too much time and effort spent on processing, storing and maintaining data, instead of data analysis.
Thinking about the challenge, not the tech
If AI is the answer, what is the question? Every organisation wants to adopt AI for fear of falling behind, but not everyone has a business case – or even understands the benefit. Where appropriate, some organisations are experimenting with AI on a small scale, such as in speciality commercial insurance, where you don’t need large volumes of data for accurate risk assessment. There are also providers working with amalgams of frontier AI models to deliver specific customer service needs.
The kind of data clients want, and what they expect to get from it, is often missing from organisations’ initial thought processes. That’s why it’s important to take a step back and understand the problem they’re looking to solve.
Gaining more support from leadership
C-suites often don’t have a clear understanding of data, digital technologies or even DA. As a result, they might not understand what kind of data they have, or whether it’s enough for accurate decision making. Boards frequently ask heads of delegated authority to take on too much without the resources, talent and support they need. Greater education on the data available, its importance to the business and the challenges facing DA, will give boards a clearer understanding of what’s happening in DA and the part that data has to play.
Conclusion: It’s a team effort
With varying ways of ingesting data and a lack of C-suite understanding, common data standards are still some time off. But by working collaboratively, understanding the business need for AI, and educating the C-suite about data and DA, organisations can substantially increase their ability to make the most of their data.
These insights were gathered during our exclusive delegated authority breakfast roundtable on Wednesday, 20th November 2024. How’s your business getting the most out of its data? What have you found challenging? Contact me at ben.johnson@eamespartnership.com for an informal conversation. You can download a full report on the discussion ‘What’s the future of data and AI in the delegated authority space?’ here.
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