Structured Data, Unstructured Data, and Growing Your Distribution Channel

Structured data is vital to the future of growing insurance distribution channels, but moving from present to progress is no easy proposition. Keep reading to get the skinny on structured and unstructured data, and why your insurance organization should care. 

Data is everywhere. Even more so in the insurance industry. From the vast quantities of actuarial data a carrier houses to the minute details of client data an independent insurance agent collects, there’s no escaping the truth that we’re surrounded by data and only creating more of it every second of every day.

But often, especially in the insurance industry, it can feel like, “Water, water, everywhere. But not a drop to drink.” Data, data, everywhere. But none of it is accessible or usable. Sound familiar? The problem isn’t that we’re lacking data. It’s more to do with how data is collected that determines whether or not it’s usable. This brings us to the important distinction between structured and unstructured data.  

What is unstructured data?

Before we can talk about structured data, let’s talk about its predecessor: unstructured data. Unstructured data can encompass anything from paper forms to disorganized and siloed digital formats. Just like it sounds, unstructured data is that which is collected and housed in an unorganized, unstandardized way.

What are some examples of unstructured data?

Examples of unstructured data include emails, spreadsheets, images, video files, audio files, and of course paper files. When information is collected and stored in an unstructured way, it blocks the ability to view the data as a whole, analyze it, identify trends, and many other uses that we actually want to get from our data.

What are some drawbacks to using unstructured data?

Unstructured data is less efficient, less accessible, and less secure. And security matters because sensitive client information like health history, Social Security numbers, and financial details are common pieces of data the insurance industry keeps in unstructured formats. The inconsistency of formats across unstructured data gives cybercriminals an advantage when trying to hack sensitive client information. These cyberattacks commonly come in the form of phishing, ransomware, identity theft, data breaches, and unintentional leaks of sensitive information. As we’ve written about before, the insurance industry is a prime target for cybercrime.

Security isn’t the only concern. Because unstructured data tends to be more siloed, it’s less efficient to sort through and requires more manual labor. Insurance industry employees would rather not spend their time tediously digging through different spreadsheets, files, and folders to then cross-reference information between multiple sources. The truth is, many still do!

What is structured data?

Structured data doesn’t consist of inherently different pieces of information than what’s found in unstructured data: It’s just that it’s collected, organized, and stored in a way that enables both people and technology to access it and leverage it more easily.

What are some examples of structured data?

Structured data can include formulaic data points that are easily labeled, like customer names, addresses, important dates, car makes and models, and insurance claims history, as long as these are housed within a shared database. When an insurance agency uses an agency management system (AMS) or customer relationship management system (CRM), the system forces data to be entered in a way that adheres to a set structure. Once collected, the software can filter, sort, report, and analyze the data in a way it never could if – for example – each employee kept a Word document with the same information on their own computer.

What are the benefits to using structured data?

A huge benefit of structured data is the ability to proactively manage your business in a way you can’t when you’re dealing primarily with unstructured data. With the transparency and visibility structured data provides, business leaders can access trends, leverage predictive models, and overall make more data-informed decisions because they have a clear view of what’s happening across each part of the business and during each step of the process. 

On top of just being more easily accessible to employees, and being more easily analyzed by technology, structured data formats are more secure. This is because rather than data being all over the place (your desktop, a shared network drive, your filing cabinet, a notepad on your desk, a USB thumb drive, a sticky note in your pocket, etc.) all data is kept within a secure platform that has safeguards in place to prevent unauthorized access. Insurance industry software is increasingly moving toward zero-trust security protocols, which limit access to only authorized users and never assumes a user is authorized just because they logged in previously.  

How can the insurance industry benefit from structured data?

When considering if a switch to structured data systems is the right direction for your insurance business, it’s important to consider the positive effects that make day-to-day operations flow smoothly. The insurance industry can use structured data, which includes specific customer information detailed above, to influence underwriting, rating, pricing, forms, marketing, and claims handling. 

Another aspect to consider is how the volume of your data will be stored in the database. The two main options to house your data are cloud storage maintained by the storage provider or on-premises data storage systems requiring you to maintain, protect, and backup your data. You can read more about the key differences and pros and cons here. 

What are known risks to using structured data?

After reading the above, you may be asking yourself if there are any downsides to switching entirely to systems that use structured data. With any technology shift, there are always concerns regarding implementation, hassle, data security, cost, and ongoing maintenance. Structured data kept in a secure location (whether cloud-based or on-premises) is typically not as much of a security concern as unstructured data, although it can become one if files are shared outside the secure environment. Once data leaves a closed, secure system, your organization loses control of how it may be used and who may access it.

Structured data is more rigid

One true con of structured data is precisely that it is structured. The same parameters that make the data easily searchable and analyzable can limit the creative use-cases for the data outside of its original purpose. Luckily, this is becoming less of a roadblock as new technology like application programming interfaces (APIs) help connect one set of structured data with another.

APIs are quickly becoming vital to the insurance industry as new technology relies on the ability for one system of structured data to “talk to” another. Some examples of common use-cases for APIs in the insurance industry include: 

• An insurance agency’s management system syncing with its customer communication and marketing system to allow a seamless and automated flow of communication from the time a potential client inquires about an insurance quote through the lifecycle of the sales and servicing of a policy.
• Producer licensing and compliance management software pushing and pulling real-time information between multiple insurance companies, regulatory bodies, and agencies. 
• An online customer quoting system where a consumer can input information and receive real-time insurance quotes from multiple carriers. 

Structured data must adhere to storage requirements

Most structured data is stored in data warehouses, which may come with their own requirements about exactly how the data needs to be formatted. If the warehouse changes anything about its setup, this can mean customers of the warehouse now must spend time and money adjusting large quantities of data to meet the new criteria.

Using structured data to grow your distribution channel

Despite any downsides, the truth is, the insurance industry will largely benefit from moving away from its historic unstructured methods and toward systems of structured data in the future. One particular use case for structured data within the insurance industry is the ability to use data to power carrier, agency, and MGA/MGU growth.

In the world of unstructured data, any insurance business looking for insights that will help grow its distribution channel has to obtain multiple, overlapping, messy data sources, which likely have incomplete or inaccurate data. They then must cross-reference all sources to check for inaccuracies and redundancies. They have to manually analyze data, or at the very least, spend time entering data from different sources into one central system to try to find insights.

Structured insurance industry data, on the other hand, allows the user to instantly access and sort industry-wide data from multiple, reliable sources thanks to integrations and feeds. The right technology can give you access to search for agencies or carriers by state, by line of authority, by active carrier appointments, and more. The right technology will have periodic data refreshes to ensure the data you’re using isn’t stale or untrustworthy. With a system like this, your organization can quickly and precisely target the best possible distribution channel partners to meet your growth goals.If using structured data to grow your insurance carrier, agency, or MGA/MGU sounds appealing, check out AgentSync in action today.