Insurance companies often rely on external partners to manage parts of their portfolio, but external portfolio management can complicate their data infrastructure. Investment data and accounting data can be split across external and internal systems, in different formats, connected through legacy or infrequent interfaces. The data challenges that a fragmented infrastructure present are especially compounded by the acquisition of new business, which requires the integration of an entirely new set of systems and partners.
Insurers with multiple Investment Books of Record (IBOR) and Accounting Books of Record (ABOR) not only operate at a higher cost but without an enterprise view of their assets. Limited visibility of this data can prevent effective coordination with the liability side of their business as well as operating effectiveness and resiliency.
Data integration in a hierarchical manner will facilitate a single version of truth
A data hub can bring together fragmented data, including multiple IBOR and ABOR records, but this presents technical as well as business challenges. Even if data formats and interfaces are standardized, there is usually considerable overlap of redundant data. A common example of redundant data are security identifiers or prices, which can come from different market vendors and be applied inconsistently across an enterprise.
To achieve a single enterprise view of IBOR and ABOR data, format and interface must be standardized, but business rules must also be applied to select preferred data sources. The work to define these business rules usually reveals data governance or quality work that is already happening, so transparency over these rules helps to create a data hub as well as centralized data quality.
