"They are revamping a good deal of the traditional technology," he says. "There's also a geographic dispersion with remote employees. This is causing people to step back and maybe restructure their approach to storage and management of data. As changes come in the industry they are revisiting the infrastructure and looking at different solutions."

One of the key areas to focus on is unstructured data, which to many people means audio and video files and photographs, but Callahan points out that some text files also are unstructured and if insurers cut up the unstructured data pie, text data is the largest portion of the pie followed by images—accident pictures, inspection pictures of a house—and then audio files, such as recorded reports for claims investigations.

"Companies are trying figure out how to get into the data in an automated manner," he says. "Some text analytics tools are doing mining through actual unstructured images of data and are getting out meaningful information."

Callahan reports that an insurer he has worked with has conducted text mining research on workers' comp business where they are running tools against the claims files looking for words that would profile risks or exceptions. Their system also is going through images stored in their imaging systems "like they were adjustors going through a file."

Callahan believes this is a good use of text analytics.

"They are not changing how data is stored, but they are changing the way they are looking at it," he says. "The industry is very effective with structured data. The biggest challenges with structured data are redundancy and quality, not infrastructure or management. When you look at unstructured data it becomes the volume and indexing that makes it more challenging."

Callahan also has seen telephone tools work well at creating links to integrate into a carrier's administration systems.

"You have recorded calls on service transactions that have a link to the legacy or new admin system so you can get to the entire experience of that client," he says.

The extent that carriers are now dealing with unstructured data is overwhelming, points out Callahan.

"If you look at telematics on the p&c side and the flood of data coming in from social media, indexing is the key and that's where I see advances," he says "The metadata is the key to get to the analytics. If the analytics tools know where to look, they can give you the answer. Knowing where to look is the challenge."

With so much data coming in, Callahan believes storage remains an issue, although he sees some leading-edge carriers moving in the direction of the cloud, although most carriers are more cautious because of security concerns.

"Whenever customer data is leaked it certainly sends trepidations through the insurance industry," he says. "Given that most data centers are not proximate to where the operations are, you are operating in the cloud, although it's a walled-off cloud. I'm not seeing a major rush to put all the data out there in a cloud. When I look at cloud I think of timeshares. If I run a variable product off someone's data center, you are effectively running that business in the cloud. It's not necessarily a new concept; it's just being presented differently."