While there continues to be huge numbers of mergers and acquisitions (M&A) in insurance, Quantexa feels many are not meeting their full potential.
Even during the pandemic, M&A activity remained high. There are expected to be a continued high level of deals in 2021. The first half of the year saw 197 deals completed, which was down from 201 in half one of 2020, according to data from Clyde & Co.
In a new blog post, Quantexa states that M&A is one of the best methods for pushing innovation, finding synergies and advancing digital transformation initiatives.
However, despite the huge potential, Quantexa believes many deals are falling flat due to their inability to maximise the value because of disparate IT systems and data. This means operational teams are unable to effectively serve customers and potentially cause friction within customer experience and portfolio risk management.
If an insurer can successfully handle integration and consolidation of data, it can give them a better understanding of customers and even serve as a competitive advantage, Quantexa explained. With better access to richer and broader data, the insurer can bolster their customer experiences, relationship management, as well as improve the application, underwriting and claims processes.
A reason some firms fail to successfully merge data is because they rely on large scale data migration projects or master data management solutions. “But traditional solutions in this space are not built to scale for the high volumes of distributed, disparate data that is generated by various applications and external sources within M&A,” the post said.
Traditional master data management solutions are not suited for siloed data sources and can cause data duplication or inaccurate record linking. The system can also miss connections and context, causing inaccuracy within decision making.
Instead, Quantexa believes firms should switch to a contextual master data management service.
These boast an array of benefits, including the ability to connect siloed data and enhance its with greater context. This supports a joined-up view of all data across each business, in-terms of customers, third-parties and supply chains.
A contextual master data management solution also ensures hidden connections can be revealed, better relationship understanding, dynamic data updates as each record changes and maintaining a “golden record” that ensures the highest-level of accuracy and trustworthiness for data.
Finally, the contextual master data management solution empowers a data team to have a strong foundation for their data and analytics across the business. It achieves this by accelerating data and system migration through data fusion, predictive entity and network-based AI, visualization and unified exploration.
With this, a team can reduce the time and effort of data scientists maintaining data and handling quality issues, freeing them to spend more time on predictive analysis, decision intelligence and process automation.
It concluded, “Many insurers are demonstrating a sense of urgency about both M&A activity and their digital innovation efforts. In a recent global survey of insurance executives, 79% reported that the coronavirus pandemic exposed shortcomings in their company’s digital capabilities and transformation plans. In response, 95% of those surveyed said they are accelerating their digital transformation to maintain resilience with better use of cloud computing (59%) and data analytics (49%).
“Establishing a strategic approach to data integration is key to tackling the steady rise of M&A in insurance, and accelerating your digital transformation journey.”
Read the full blog post here.
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