Random thoughts - Insurance Knowledge Management

Driving down to meet a friend, I got thinking about the topic for my dissertation - Knowledge Management in the Insurance industry. Some thoughts:

We are still in the knowledge acquisition phase as far as the maturity of KM activities are concerned, and hence we shall focus on that aspect of Knowledge Management. To give you a simple example of what KM is, and what it can do for your organization, let us look at one aspect of your business, and then pick strands of related ideas and thoughts as we make progress.

So, let me start with a simple example, say, in the Marine Business. Marine Cargo insurance, as you are all well aware of is the insurance of cargo from one place to another; the mode of transport is by Air, Sea or Land. What are the different aspects of this insurance that one needs to be aware of. For instance, the rating is dependent on the type of goods, the way it is packaged or stored, and the mode of transport. This is of course a simplistic way of looking at something. However, for the purpose of our understanding, let us just focus on these three aspects for the time being. Now, when someone who is not familiar with the business is given the responsibility of underwriting this insuance, what is it that he needs to know. Can we place a ready reckoner for him, that will help him along the way. How can he get more information about this type of insurance? Do we have a repository of our experience in this line of business? How about the industry experience - after all, to a large extent rating is driven by the general experience in this business? So, as we begin to probe this further, we realise that life would be a lot simpler if we can have this information available. More importantly, if this was available in a readily usable manner, then the benefits accruing to the company because of this is enormous: we could ensure that people made less mistakes during underwriting, for instance; or the claims process would be more diligent; the information available within the organization would help in reducing incidents of fraud. However, the way I see it, the fact that the underwriter is more knowledgeable about the subject is perhaps the biggest take-away of all. He is a lot more productive, which directly contributes to the bottomline.

More on this in a while...

Insurance Speak - Experian experience

Business segmentation: three categories of business segmentation
1. Classifications - Commercial mosaic classifies the business into 13 groups and 50 different types based on key variables that significantly influence behaviour.
2. Propensities - broad description given to any statistically modeled value that indicates a business's likely behaviour; for example, purchasing intentions, profitability etc.
3. Demographics - broad term used to describe any single characteristic of the business. This may include variables such as: employees per site, total turnover, net worth, pre-tax profit, sales per employee, etc.

This is a useful classification for analysis of the business. See how you can apply the same concept to the indian industry and come up with similar classification.