McKinsey: Where did you start when building a deeper data and analytics capability at AIG?
Heather Wilson: I believe in evidence-based work. At AIG, we started by finding a few business executives who were willing to sponsor a series of pilot initiatives to create this evidence base for big data. We started with five pilots of analytics capabilities in different areas.
McKinsey: Can you give an example?
Heather Wilson: In one case, we had a claims file with a lot of unstructured text data, so our scientists could not analyze these comments. We could access only around one-third of the elements in a typical claim file. So we ran a pilot for efficiently processing this unstructured data and were able to extract around 2,000 data elements. Now all of a sudden we had unlocked a lot of additional information from this data, which provided a rich data set for our scientists.
McKinsey: What did you do after the initial round of pilots proved successful?
Heather Wilson: I am always going to continue the innovation stream and do pilots. As the technology continues to mature, I expect that we will continue to see new applications and capabilities emerge.
McKinsey: How did you fund these pilots?
Heather Wilson: You have to think through all sources. In the initial round, we used three different funding sources: we combined seed money from my business-as-usual budget with funding from relevant business executives, and we leveraged vendor partners who invested by offering their labs and skills to prove out certain technologies.
McKinsey: Why was business funding important?
Heather Wilson: We felt that getting funding from the eventual business users was critical, as it would give them a share of ownership and stake in the success of these pilots. Their funding ensured that they were serious about the pilots and would invest in applying the insights they generated to future business analytical capabilities.
McKinsey: How did you position the pilots with the vendors?
Heather Wilson: Our partners went into the process with the understanding that there was no guarantee of downstream work, but by being good thought partners they earned goodwill and an opportunity to participate in our journey. They also learned from our pilot for future product releases.
McKinsey: Why did you turn to vendors instead of trying to do this completely in-house?
Heather Wilson: We felt that speed was essential. We had to get the pilots proving value as quickly as possible, and the vendors were very effective in helping us bootstrap the work. Because they were external, we did have to take some precautions, like masking parts of the data to ensure we were compliant with our legal, regulatory, and privacy guidelines. Even with the masked data, our pilots were hugely successful, and we know there is even more gold in the unmasked data.
McKinsey: What were the keys to your pilots’ success?
Heather Wilson: It’s critical to be the queen—or king—of communication. You have to spend the time to make sure people know where you are and where you’re going with new data capabilities. To do this, you need to have a whole communication strategy. I talk to our executive sponsors monthly, and oftentimes every couple of weeks, to ensure they understand the pilot status. They have to understand what is in the pilot and how it affects their business unit. They are the owners of the pilots, so it is essential to communicate the entire life cycle of the project. Additionally, we created metrics with our executive sponsors to baseline our efforts.
This article was originally published in McKinsey Quarterly. Copyright (c) 2014 McKinsey & Company. All rights reserved. Reprinted by permission.
Register or login for access to this item and much more
All Digital Insurance content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access