Data governance – five key strategies for insurers

In the insurance industry, data governance defines the framework conditions for dealing with large amounts of data. In addition to secure data handling and high data quality and integrity, there are now five key strategies that insurers should consider in connection with data governance.

For effective and responsible use of data, all insurers need a foundation in the form of a robust data governance framework. This enables them to make data-driven decisions while at the same time complying with the required regulations. At Swisscom’s Data Governance in the Insurance Industry event (in german), five key factors emerged from the discussion that are crucial for insurers today to ensure they remain competitive in the long term:

1. Centralise data management
   Start by centralising data management so that all data can be managed consistently and accessed easily. This reduces redundancies and significantly improves decision-making. Use this as the basis for building a transparent and efficient data strategy governing the handling, processing, protection and evaluation of data for reliable results at all times.
   
2. Establish transparent processes and clear guidelines
   Ideally, you should set up a committee consisting of specific key roles (e.g. data stewards) to define data classification, quality, security and access guidelines. This will enable you to establish transparent processes and clear guidelines that you can regularly review and, if necessary, adapt to meet all regulatory requirements. Clear guidelines create trust within insurance companies and with your policyholders.
   
3. Invest in technology and know-how
   Tools help you to be more efficient – whether in checking the quality of your data or in automated cleansing processes. This ensures the high quality of your data, makes data management more efficient and allows you to respond faster and more flexibly to new challenges. At the same time, building cloud technology competence is essential so that newly implemented processes are based on the use of the latest technologies.
   
4. Ensure continuous monitoring and adjustment
   To operate successfully in the long term, you should continuously monitor your data governance strategy and adapt it if necessary. Ideally, use verifiable key performance indicators (KPIs) and always keep your data strategy up to date and effective. Possible KPIs include a data quality indicator, data availability (is the data always available when needed?), data usage rate, etc.
   
5. Treat data as a strategic asset
   Think of your data as fuel for innovation and growth. Treat it as a strategic asset and not simply a by-product of your business processes. Provide appropriate training to ensure your employees understand what your data contains, why this information is important and how your organisation can unlock its full potential.
   

Data governance requires commitment

Implementation of data governance in an insurance company is not a sprint, but an extensive, lengthy and exhausting marathon. You need the right strategy, plenty of stamina, discipline and perseverance to overcome the various obstacles along the way.

Implementing data governance requires commitment from the entire team and a long-term vision in order to deal with resource scarcity, resistance to change, technical difficulties, complex data landscapes and unclear responsibilities.

And as with a marathon, overcoming all the challenges and reaching the finish line pay off when implementing data governance. Insurers can then use their data as a strategic success factor and minimise risks such as data loss and misuse as well as data handling inefficiencies.

Once a framework for handling data is in place, it can be used to build a solid data pool that can be worked with in confidence. This helps insurers to identify risks more precisely, calculate them more accurately and lay the basis for informed decisions. Other positive effects include improved ESG reporting and a good impression of the insurer amongst investors, supervisory authorities and clients.