INCREASE OPERATIONAL INSIGHT AND AGILITY FOR GLOBAL INSURERS

Data Governance for the Insurance Market | 2

Industry Pressure

Over the past decade, the insurance landscape has shifted dramatically.

New, “insuretech” insurance companies create pressure on traditional

insurers by threading the needle on the regulatory landscape and leveraging

technology and data to radically alter the customer experience, impacting

both retention and new customer acquisition of the incumbents.

Additionally, increased frequency and severity of catastrophes (not to

mention a global pandemic) are leading to a rise in claims, itself resulting

in increased severity for liability losses due to litigation. This, coupled with

historically low interest rates causing depressing investment income, has

created an urgent need to carefully manage capital to balance these risks

more effectively to fund innovation.

Business Impact

Investment Opportunity Cost Insurance companies collect insurance premiums from their customers and

invest those premiums to generate a return on investment (ROI). They invest

premiums that are beyond the required statutory capital reserve. Without

having real-time visibility on available premiums for investment can cause

the company to be under-invested, causing under performance compared

to their peers. Indeed, insurance companies require up-to-the-minute

awareness of the ebbs and flows of capital to drive investment decisions

and the lack of trustworthy or complete information to aid decision-making

creates significant risk.

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Regulatory RiskInsurance companies are highly regulated in each jurisdiction where they are

licensed. Regulatory requirements vary by state or municipality and include

capital reserves based on a ratio of revenue to assumed risk. It’s critical

that data supporting revenue and risk profile of the portfolio is available

on-demand, is accurate, and is maintained properly. Inaccuracy or delays

producing these critical metrics can lead to financial penalties, insolvency

declarations, and/or barred from operating in a given jurisdiction.

There may be large differences in the nature and definition of acceptable

reserves, which can make it tricky for companies, and their shareholders, that

operate in multiple jurisdictions.

Because statutory capital reserves

are dependent on premiums,

it is critical that each organization

has a clear understanding of

premiums through their life-cycle

- quoted, written, earned, net, etc.

Additionally, data security is

becoming an increasing concern

for the insurance industry. As

the regulatory, monetary and

reputational consequences of data breaches continue to mount, they are

now a significant business risk.

Customer Acquisition & Retention RiskThe insurance market is both highly competitive and highly regulated. Within

rating classifications there will be minimal differences in quoted premiums

between insurers. This places a premium on customer service. Lack of

fast, accurate and friction free engagement with customers during policy

“It’s critical that data supporting revenue and risk profile of the portfolio is available on-demand, is accurate, and is maintained properly.”

Data Governance for the Insurance Market | 4

quoting, policy management, claims management and billing can cause

customers to leave, or to select emerging Insuretech alternatives that

present a lower barrier to entry.

Why This Solution

Alation and Snowflake have defined a joint

solution to help global insurers to break down

silos, accelerate data governance and drastically

improve business performance.

Why Alation

The Alation Data Governance for Snowflake

solution combines Alation’s market-leading

enterprise data catalog platform with the

Snowflake Data Cloud, to power leading insurance

companies worldwide with a people-first, active governance approach that

enables decision makers to trust the data behind each analysis needed to

make critical business decisions rapidly.

Why Snowflake

The Snowflake Data Cloud is the leading Cloud Platform for the creation

of consolidated, actionable, and trusted information. It combines data from

policy, claims, billing systems and other data sources to help insurers drive

real-time analytics and reporting at scale.

Data Governance with Alation and Snowflake

Alation and Snowflake have a track record of helping global insurers

empower their employees to adopt a data culture by breaking down silos,

accelerating data governance, and empowering data governance leaders,

chief data officers and business executives to make better and more timely

decisions with data.

Data Governance for the Insurance Market | 5

These insurance firms realize business value with Alation and Snowflake.

These firms leverage the benefit of this combined data governance approach,

which takes a people-first approach and applies governance at the point

of data use.

Case Study

Austin-based Texas Mutual Insurance Company is the state’s leading

provider of workers’ compensation insurance. They serve over 40% of

the Texas market, and over 72,000 Texas businesses rely on them to keep

their 1.5 million-plus employees safe and on the job. Since 1991, the

company has provided a stable,

competitively priced source

of workers’ comp insurance

for Texas employers. Helping

employers minimize the human

and monetary consequences

of workplace accidents is a

crucial part of their mission.

Before partnering with Alation

and Snowflake, Texas Mutual’s

biggest challenge was enabling

its organization to leverage data

as an asset. Doing so helped Texas Mutual make data-driven decisions

to continuously improve claims outcomes and optimize premiums and

reserves during a time of rapidly changing factors affecting policyholders.

These factors include the opioid crisis and Covid pandemic, recreational

marijuana legislation, rising medical costs, and an increased volume of

complex claims.

To effectively manage their critical use of capital in response to such rapid

change, executives rely on a daily premiums report, powered by multiple

data sources, complex analysis, and metric calculations to understand the

company’s ebbs and flows of cash. But business leaders examining the data

had difficulty trusting the accuracy or understanding how information was

derived. This created delays as teams of staff evaluated and reviewed critical

information, robbing the leadership of their most valuable asset - time,

specifically time to make impactful business decisions.

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Winning Solution

To tackle these challenges, Texas Mutual has implemented a next generation

cloud-based analytics platform and Active Data Governance solution from

Snowflake and Alation. Combining data from 11 business domains and key

processes such as actuarial, policy management, claims, finance and the

like, the solution provides trusted, reliable data that executives rely on

to make in-the-moment decisions about how best to deploy capital.

The first iteration of Active Data Governance is targeted at premiums with

the goal to empower, enable and engage the business across other lines

of business.

In order to accomplish this the Active Data Governance process does

the following:

Establishes business ownership and participation in defining key business metrics such as premiums or claims

Classifies critical fields stored in Snowflake

Allows easy search, descriptions, business meaning for premium related fields in Snowflake

Catalogs and classifies premium related BI reports

Creates lineage for BI reports and fields so users understand the relationship between data and reports

Certifies premium reports based on data quality so business users can trust them and make business decisions with confidence

Establishes guidelines and standards for stewardship and premium related asset curation in the catalog

Metric 1 Metric 2 ... Metric N

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Reference Architecture

Achieved Outcomes

Working with Snowflake and Alation, Texas Mutual was able to unlock

decision-making to improve business performance, mitigate risk and

accelerate innovation. Here are some key success examples at Texas Mutual.

Shared Enterprise Premium DefinitionFor the first time, Texas Mutual has a consolidated view and definition of

the premium ‘life-cycle’ including, quotes, written, earned, billed, and net

premiums. This allows every business function to report consistently and

make decisions using the same, foundational understanding.

Business Critical Executive Decision SupportExecutive leaders are able to use daily dashboards and reporting with

confidence that the numbers are certified. This is vital in a business where

several critical inputs including healthcare trends, demographics, legislation,

Data Governance for the Insurance Market | 8

are changing quickly. This requires quick and accurate responses related

to the risk the company is assuming, its capital reserves, and investments.

Modeling AccuracyModels that show trends and predict the health of the business rely heavily

on types of premiums (written, earned, billed, net). Providing self-service

access to fully curated and defined premium data helps Actuarial and Finance

create models and perform scenario analysis. This impacts changes in pricing,

cash management, collections, payments, and other key business processes.

As a result of the above improvements, Texas Mutual was able to reduce

delivery time of essential business dashboards by 80% thus enabling senior

executives to make daily decisions on how best to deploy critical capital.

In parallel, the deep trust in the accuracy of the data that the solution

engendered largely eliminated the back-and-forth rework and forensic

analysis that often resulted from analyzing the underlying assumptions

and definitions behind the data.

Next Steps

Interested in learning more about how Snowflake and Alation together

empowers data governance success at your organization? Please click

here to schedule a 30 min call with your sales representatives.

“Texas Mutual was able to reduce delivery time of essential business dashboards by 80% thus enabling senior executives to make daily decisions on how best to deploy critical capital.”