Insurance companies face a significant challenge in their ability to differentiate themselves from the competition. While conventional methods such as new product offerings and discounted rates may offer growth paths, it is a company's commitment to technology that can deliver true advantage.

More than ever before, technology is lowering operational, transactional and service costs and improving customer service and quality risk assessment. Companies are turning to everything from service-oriented architectures (SOA) to data analytics and predictive modeling, geographic information systems (GIS) and virtualization as they seek to maximize technology investments and achieve measurable business results.

Here’s a closer look at these key enabling technologies.

Service-Oriented Architecture

SOA was designed to make software reusable by allowing different technologies to be combined and interchanged. This is an especially valuable asset in the ultra-competitive insurance industry, where the ability to bring new products to several markets quickly and efficiently is a major key to success.

By utilizing SOA to develop a set of core, complementary data components, insurers can build out a wide-range of services and business solutions for customers across several markets in a fraction of the time it would take using a traditional systems. Additionally, SOA provides greater flexibility to adapt to today’s rapidly changing, global business environment.

Many insurance organizations are starting to use SOA to increase business value by integrating heterogeneous data sources. But that raises technological and business challenges. After all, data that is suitable for one purpose is often not suitable for another. For example, data with one error per one hundred entries may be good enough for a marketing campaign, but not good enough for fraud detection.

Accordingly, one definition of data quality is “fitness for the intended use.” When a service provides data for a variety of unknown purposes, quality is difficult to maintain and control.

From a business perspective, legal and business constraints can limit the use of data in an SOA environment. For instance, if an insurer obtains permission to use a set of third-party data in a marketing campaign, that does not necessarily give it the right to use that data for an unrelated initiative such as fraud detection. Such issues highlight the importance of authentication and authorization at the service level.