Competing for customers: data management and business analytic practices help carriers develop insight into their customer base.

Economic challenges have forced insurers to an increased focus on customer analytics.

Competition has never been fiercer nor have profit margins been thinner. Effective management of customer data and the ability to analyze it are critical success factors for insurers to survive in this market.

Customer relationship management isn't once and done. Developing a 360-degree view of the customer optimizing contacts, facilitating offers in real-time and enhancing customer service is a continual process. Historically, insurers built master customer files and data marts to integrate customer data across multiple policy, claim, billing and other core applications.

As carriers consolidated call centers operationally, pulled more customer service back from agents into call centers and provided more cost-effective and flexible phone and Web self-service options, they integrated data across these touch points. They also included not only financial transactions, such as premium billing and claims, but also data from nonfinancial interactions and sources such as Web logs, call-center calls and customer surveys, adding more real-time data to the mix.

While they haven't yet conquered all the hurdles of customer-data management and analytics, insurers now have richer data sets and improved business intelligence tools to leverage this explosion of data. They also have more advanced performance management applications and methodologies available to them including evolving business intelligence tools such as text mining and sentiment analysis, which reveal data patterns in call center notes, customer surveys and other documents and enable insurers to detect potential attrition, cross-sell opportunities and new product ideas.

Scorecards and dashboards have become part of integrated portals and focus on metrics that are part of integrated strategy management and planning applications fed by integrated data stores instead of one-off or stove-piped functional applications. Visualization tools have evolved to true business end-user data exploration tools that enable "knowledge workers" such as agents, underwriters and claims professionals to conduct theft own analysis using "Google-like" questions while business intelligence widgets provide ambient business intelligence via dynamic data update and customizable content.

These tools are becoming mobile, available on PDAs and other devices and many insurers are extending these capabilities outside their walls both to distribution partners and customers. Performance management applications provide new insights into profitability by customer segment, product and channel enabling revised product pricing, product development, customer service and channel management.

Data quality and data governance continue to be key components of business analytics. Meta data management (data about your data) and integrated metric frameworks have become part of an organization's data foundation. Organizationally, joint business and IT teams are collaborating as part of enterprise business intelligence competency centers for knowledge and best-practices sharing.

To provide products and services that stand out in a turbulent market, insurers need a robust, 360-degree view of a customer that covers his or her entire experience with them. Information technologies that support end-to-end business processes, combined with sound data management and business analytic practices, can help carriers truly compete on analytics.

Patricia Saporito, a Best's Review columnist, is senior service line leader, insurance and health care, for Business Objects, an SAP company. She can be reached at [e-mail].