Finally, McGiffin sees an up tick in investments in catastrophe management having to do with Katrina and continuing major costly events.

The initial step in the process is to ground the technology projects, programs, and investments by helping clients with the business case to achieve the desired outcomes, according to McGiffin. "Otherwise, it will be a large-scale IT data warehouse project that loses the attention from management over time and eventually is perceived as an infrastructure project."

There has been an important switch in what was perceived as infrastructure investments to what now is being seen as mission critical and strategic to the business, states McGiffin. "That connection finally has happened with a lot of insurance companies around the world," she says.

DATA ISSUES

The challenge Nationwide Insurance has faced over the last nine years of using business intelligence has been dealing with data-quality issues, according to Gary Peck, a senior solutions analyst for Nationwide. "Many of the source systems we are working with are 20 or 30 years old," he says. "Trying to get the appropriate data stewardship in place and data lineage from the point in which the data is created and comes into the warehouse is difficult."

Nationwide struggles with maintaining good control of the data as a data asset, and there is a lot of replicated data, Peck explains. "We have to weed through that and find out what the system of record is we want to use for the data source," he says. "There is some cleansing we have to do along the way, as well. We tend to store the data at its most atomic level. Reporting projects take those summaries at a daily, weekly, or monthly grain."

Deepak Joshi, Nationwide's database administrator and manager of the infrastructure team, points out there are some metrics that are not in the source system. "Many of our systems are product siloed," he says. "We have to do some cleansing as we load the data to the data warehouse."

Rob Crossley, director of architecture and business intelligence for Scottsdale Insurance, admits Scottsdale suffers from a lack of quality in its data, but the carrier is working to improve matters by establishing an information governance board. "We're trying to create a 'good data is good business' campaign so people understand the best place to have quality data is when it's first entered," he says. "There are several ways to attack it, but the first place we are looking is to create more awareness. If people understand that point and take the extra time to ensure the data is inputted properly, it becomes very valuable."

THE FUTURE

As Nationwide ponders the future of its BI deployment, a major concern is how best to take it to the next level as the company deals with redundant solutions and mergers and acquisitions. "We have multiple warehouses we are consolidating into a single warehouse environment," points out Peck.

The carrier looks forward to richer BI on processing systems other than the traditional ones at Nationwide, reports Mishka Griffin, an information delivery architect for Nationwide. "We've acquired some other companies, and one of the challenges on the business side is to get data from the other systems in the same format as [business users] are getting for Nationwide policies," she says. "We're looking in 2008 to do some integrated reporting so they can see some of the common attributes integrated. We are allowing for quick dashboard-type reports to distribute the information at a high level."

Yul Garces, director of operations for Coventry Workers' Comp Services, claims to have improved productivity by close to 30 percent at Coventry along with reducing personnel and enhancing the quality of Coventry's products. "Having a true dashboard is helping me to look at the operations and detect bottlenecks before they happen," he says.

Garces describes Coventry's BI program as a never-ending journey. "Every time something works well, you think of new ways to improve your business," he says. "As we evolve as a company, we'll start getting more people working from home. I am starting to think about dashboard components we may need so the supervisors can manage the remote population."

Scottsdale primarily uses its toolset for the underwriting and claims divisions, but there are some tools on the Web for the carrier's general agent community. "That's an area that can be grown," says Crossley. "We can put more and more tools out there for our agents to view the data they are sending us and the profitability of that data."

What excites him even more are opportunities yet to be explored. Recently, a member of Scottsdale's regulatory department asked how she could use the tool. Though Scottsdale is not set up in that area yet, Crossley sees the opportunity. "I had to tell her it's not something you can go on and grab whatever report you want," he says. "But I told her she can start working with our team, and there are a lot of great reports she can use."

CRITICAL BUY-IN

Critical to the success of the project at Delta Dental of Illinois was the buy-in from the carrier's CEO, Robert Dennison, relates Ross Gosnell, CIO and vice president of IT. "He's a very fact-based, decision-making CEO who loves technology and he loves the information he gets from our reports," says Gosnell. "The day after we close a month, he can see how we did without waiting two weeks to get the financial information from the accounting side."

Showing an ROI on a business intelligence project can be a challenge--but not always. "We didn't have to do that because he understood the value of [the project]," says Gosnell. "That's a huge obstacle we didn't have to deal with."

At Scottsdale, Crossley felt it was important to establish value quickly in the solution for his business users. Even though it wasn't considered best practice, Crossley created one-off data stores and put the Business Objects BI tool on top of it. "The data stores didn't really talk to each other, but we knew it would start catching on," he says. "We parlayed that success into getting more sophistication with our data stores."

Scottsdale also worked with Moore Stephens Business Solutions and analyzed what the carrier needed to start its first-generation data warehouse. "We're about at the end of a year-long project where we are pulling in about 250 million rows into a data warehouse database and building some cubes on top of that," says Crossley. "For the first time in the history of Scottsdale, someone can sit down at a desk and ask what the premium is for a region in '07 compared with '06 and '05 and drill down into class code. It allows you to drill down to the detail-level record for either the policy or the claim side."

ACTIVITY NUMBERS

There are approximately 20,000 BI users at Nationwide and a monthly average of 87,000 queries with the carrier's MicroStrategy tool. Nationwide has 28 applications in production, primarily focused on personal lines policy analysis, claims management, risk management appraisal, and agent productivity.

From a policy administration standpoint, Peck relates the carrier has a heavy analytics capability. "It is pretty much ad hoc in nature," he says. "Several hundred metrics across hundreds of attributes that are available for the users to build their own reports." Most of the analysis done for policy administration is around profit and loss based upon certain product characteristic segments, adds Peck.

Griffin explains the carrier looks extensively at the number of policies it has that are used and how much of a book of business has been retained. "We try to create a self-serve environment for our product and pricing people so they have everything they need to put together appropriate reports," she says.

Claims is much more transaction- and operation-oriented, points out Peck. The analytics used in claims are similar to those used in policy administration, but the claims people use more operational-type reporting so they can see the various workloads that are occurring at the adjuster level. "Claims is less of an ad hoc-type report and more of a prompted or canned environment," says Peck.

DASHBOARD DELIGHT

McGiffin sees the introduction of more technology for dashboards. "There are a variety of products for different types of dashboards," she says. "We don't see one product as the dashboard for everything because you are serving the BI needs for a diverse audience--everyone from actuaries to underwriting management and product developers, field management, sales personnel, and operations personnel."

At any point in time, Coventry might have 4,000 cases it is working for a particular carrier. In the past, the only way to know where things stood was to go into the particular case files and read the notes built within the system, according to Garces. Today, with dashboard reporting, the cases are organized in working queues, so the users know where each case stands without having to dive into the details. "Supervisors can move resources to cover the cases as they see fit or have multiple people working multiple cases," says Garces. "Without Allegro [a tool from @Global], this would be impossible to do."

After its initial success, Scottsdale also has invested in the dashboard module from Business Objects to allow the company to work in data visualization. The company is beginning to dabble in predictive analytics, Crossley reports. "We partnered with the actuarial division to do some proof of concepts with predictive analytics looking at claim reserving so we can predict ultimate loss of a claim," he says. "There is a whole lot of sophistication we need to grow some muscle for in that area, but the sky's the limit as far as potential."

Another area McGiffin observes the technology infusion for BI is in geographic information systems (GIS)--converging relational data, technology capabilities, and databases with spatial analytics; introducing spatial database engines working with the relational data marts; and serving up graphical visualization using mapping software. "Companies are bringing that to the user, whether it's a power user doing exposure modeling in the cat unit of the home office or underwriters or sales people in the field using these tools to understand their portfolio, manage their allocation surplus, or target risk or marketing and sale activities," she says. "We're seeing GIS find its way out of the cat unit to more of the operational side of the business."

SOFT MARKET

High-performing carriers are getting in front of the softening market through the use of business intelligence, McGiffin contends. "There is recognition the companies that were aggressive in returning their book to profitability in the hard market to get ahead of the soft curve with some of these investments are poised for more intelligent growth--being less reactive and more proactive," she says. "Every company out there is looking for double-digit growth. For the most part, they are looking to do it organically, which means they need to win the game with their rules, pricing, and products and be easy to do business with."

Carriers are going to distinguish themselves more through product and service, according to McGiffin, than they are through process. "Everybody has automated process, so that's become a bit of a standard," she says. "There is recognition the way to win the game on a sustainable basis across market cycles is to generate unique insights that can be translated into more profitable approaches to product and service."

Companies that are trying to preserve rates and still grow by double digits realize they have to generate unique insights to get much finer market segmentation of their own book. They also must segment the target books they want to go after before they focus their resources and energies on that target business to grow, explains McGiffin. That could mean pricing what would otherwise be considered more hazardous business or enabling a more opportunistic approach to certain classes of business or product lines, she adds. It also could mean generating insights that allow carriers to build new product lines and be able to do so with confidence they can complement their portfolio with a new product.

BI FOR CRM

A key benefit to Delta Dental's business intelligence initiative was its ability to integrate with customer relationship management, according to Gosnell. The carrier had a CRM system in place, but it did not have the tools Gosnell felt were necessary to improve relationships with clients.

When Microsoft released its CRM 3.0 product, Gosnell believed the performance of this platform had been raised to the next level. "To maximize the value of this product and virtually all other IT initiatives, you have to be able both to have and apply a vision of where you want to go and what you want to achieve," he says. "That strategic component is the key to success in most disciplines."

DDI's vision included not only a tool for customers and prospects but one that would help the carrier proactively manage all of its critical stakeholders and give DDI a 360-degree view of its customers. Gosnell calls the CRM tool a gateway portal to information for all the carrier's defined entities and is both a vehicle and a repository for enterprisewide communications. "The fact this critical informational gateway resides on everyone's desktop and is integrated with Microsoft Outlook certainly adds to the ease of use not found with any other product," he says.

While the benefits of this tool include integration with Web-based applications, Gosnell maintains one of the most powerful tools is the use of CRM with its integration into the business intelligence solution from Business Objects.

An inherent component of any well-designed BI platform, states Gosnell, is the ability to use analytical functionality to understand what the information is telling you. "Tools such as exception reporting, drill down, parameter selection, and various sorts and filters all help you to get to the bottom of questions you may have regarding the presentation of information," he says. "Couple that with business analytics in the form of graphs, charts, trends, and dashboards, and you have the ability to have information proactively telling you what's happening without having to download data to spreadsheets, printing reports, and other forms of crunching numbers, all of which are time-consuming and susceptible to error. When you are managing numerous entities, you don't have time to do that on an individual basis."

THE VISION THING

The biggest challenge for carriers embracing BI is having a vision, asserts Gosnell. "You have to know where you want to go," he says. "As easy as that sounds, a lot of people don't have that. They jump [into a project] and say, 'Now where do we want to go?' We knew where we wanted to go."

Investments are reaping the rewards and achieving the business case, observes McGiffin. "There probably isn't an enterprise conclusion yet for BI, but I think we are seeing achievement in the value of the business case for things such as product pricing, for example," she says. That's been a priority area for companies."