Missing Automated Data Lineage for your Actuarial and Pricing Processes?

by | Mar 20, 2020 | Data Governance, Data Lineage, Insurance

Discover the impact manual processes or missing visibility in your data governance framework has on your organization.

By now, your organization most likely implemented a data governance framework or a data catalog that offers a high level view of your data and manages your daily data activities. 

One of the greatest challenges facing insurance companies, and specifically, actuaries, is to identify or correlate a compelling return on investment. When your talented actuarial and data science teams determine a rating, you are likely sourcing this data from policy, billing, claims, or other unstructured data to formulate the pricing. Therefore the critical next step to your data governance process is source for data lineage at a granular level. 

Identifying the data flows and the transformations that occurred and lead to the building of models and leveraging analytics are fueling your pricing models and will ultimately lead to the ROI that your actuaries must identify.

Three challenges with your insurance rating information that you are using to develop pricing


1. 50 Different Departments of Insurance, Means a Plethora of Mandates

With various mandates circulating and changing constantly, you need to have not only a 70K foot view of the data, but you need to be able to get down to the details as well.  Having reports that you can also share with internal and external audits would make the process of showing proof and avoiding fines and elements of operational risk that much more seamless.  You may have a streamlined, policy management process and a workflow in your data catalog. However, you may still end up with some blind spots, since you are not able to harvest metadata from some of your systems, like your data lake or maybe your legacy systems or others.  Automation of your data lineage will widen your vision and give you the ability to get down to record, column, and expression levels and ensure that your data quality metrics are being captured from everywhere.

2. Unable to Track the Source of the Data.

Your organization uses  a data catalog and it does a serviceable job of showing and governing the data.  The challenge is being able to say with 100% confidence where the data originated and what transformations have occurred during the data flight through each data hop.  Did this data originate from one of your main systems like policy, billing, claims or perhaps your data warehouse or lake? Or did the data originally source from a legacy system?  Was the data transformed along the way to its final destination?

Ultimately, these transformations will have an effect on your bottom line pricing in the aggregate. 

3. Finding Inaccurate Data Sources

How long does it take your organization to determine the right information was used in your rating process? Ineffective or manual root cause analysis can cloud your visibility, making it difficult to show each data hop and how those transformations have occurred. You may have a manual and costly process for this currently, involving a team of skilled FTE’s, to check through data flows on a regular basis. However, automation offers efficiency, speed, visibility, and saves money in the long term.

Take Action!

An effective first step is to take an independent look at your various sources that are at play in your rating process and gauging the priorities of more problematic sources.  

  • What improvements would you like to make to your root cause analysis process? 
  • What data lineage can you see today and what are some improvements that you would like to make?  
  • What are some question marks or blind spots that you have about your visibility of data lineage today through your data catalog?

Compact Solutions provides free data lineage assessments!

Compact Solutions provides free data lineage assessments, which usually help organizations to identify gaps or blind spots in data lineage, assess your current approach, and helps them to plan for the future.

Curious to see smart lineage visualization, deep code analytics and lineage versioning in action?

Explore MetaDex™ by Compact Solutions and experience a demo of this new combination of AI and Lineage Extraction to enrich your data catalog.


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