The continued momentum of MDM strategies will make insurers better able to overcome limitations of legacy applications, according to a new research report.
“MDM helps bring together the hodge podge of systems being used to make the systems of insurers work,” says Clark Troy, author of the Aite Group study "Master Data Management for Insurers: Mastering the Unknown Unknowns."
The thorniest problems faced by insurers worldwide can be traced back to the multiple legacy core systems that persist within insurers’ walls. MDM offers insurers an approach to reconciling the differences between disparate source systems by managing any type or domain of data that can exist plurally and make it singular.
The Aite Group predicts that the total market for MDM solutions and services sold to insurers will rise from an estimated $82 million in 2011 to $158 million in 2014. By 2015, MDM revenue is anticipated to swell another 40 percent to $3.2 billion, according to Gartner Research.
In particular, notes the Aite Group report, the most successful MDM strategies are those that have well-defined business goals, effective sponsorship and executive buy-in as well as having a well-defined scope.
“The speed at which insurers are gaining confidence is surprising as are the range of uses and applications. Insurers have quickly moved past some of the reservations they had a couple of years ago,” says Troy.
The qualitative study is based on Aite Group interviews with roughly 30 insurance carriers participating in the MDM ecosystem and with solutions vendors.
While customer MDM holds the most promise to various insurance stakeholders and is where most insurers begin MDM, increasing numbers of insurers are moving forward with multi‐domain MDM, particularly broker MDM. Other insurers have begun with finance MDM.
“MDM is giving the industry insight into customers, their finances and products, which makes it better able to overcome some of the limitations of siloed and legacy applications that are still being used in areas such as policy administration, claims and CRM solutions,” says Troy.
Regionally, the United States and Europe will lead the MDM market, though the fastest rate of MDM software revenue growth will be in Asia by 2013, states the report “Forecast: Master Data Management Worldwide 2010-2015" from the Gartner.
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