“Know your customers” is the new data mantra for the 21st century. Clean, high-quality customer data gives insurers powerful marketing and service advantages and prevents expensive headaches. A well-conceived data warehouse is a good place to start, but, as core insurance systems develop problems over time, data-quality issues grow undetected in the data warehouse.
These problems usually only show up when reports are generated from the warehouse and business people question the validity of the data. By then it is too late, and correcting the problem will take much time and money.
So how do you avoid this problem? The answer lies in searching for small data problems before they get bigger. And, once they’ve been found, fix them right away.
The same principles for running a great data warehouse apply to property/casualty, life and health insurers. All have complex challenges, but health insurers, which deal with patients, providers, employers and brokers, may face the biggest data challenges.
To avoid data integrity issues, carriers should consider establishing a simple yet effective four-step program.
1. Control totals
The standard approach is to keep track of the number of records in the file and make sure that same number end up in the warehouse. That's a good start, but take this concept further and use it with individual fields that are important for the business. For example, while loading patient data, we can get the control counts for male/female and match them with the membership system. Another example would be to get the control count based on age bands and make sure they match the membership system.
2. Aggregate data and check for trends
Your system should aggregate certain data to make sure that the percentage is as expected and lies within a trend. For example, in a typical month, 18% of members may have claims. If that number is suddenly showing up as 8% or 28%, you know you probably have a data problem.
To track the change, calculate the percentage that matched upfront and store it in the aggregate table. Storing of the aggregated data helps identify problems with the data quickly if trends change.
3. Set up automatic alerts
Your system should automatically issue alerts whenever it detects a problem: controls totals that do not match or a percentage that’s outside the range of expected results.
4. Build and empower data teams
Build a team whose job is to identify the data-quality issues. This team has to be knowledgeable about the business and understand trends. Data-quality team members should include representatives of various business departments and IT.
When any problems arise, the data-quality team will report them to the data steward/governance team. The latter team is empowered to take prompt corrective action.
The key to making any data warehouse successful is to continually build trust and credibility in the data. Checking for data anomalies is not a one-time thing. It needs to be done continuously as part of a healthy data program.
Having a set of strategies for automating data-quality checking helps maintain the trust in data over time. Building a support team that is vigilant about finding data-quality issues is a must for continuing data quality.
4 Ways to Keep Data Quality High
If you wait until a manager spots a problem with data integrity, you've waited too long. The fix will be expensive.
