DATA MOVES INSURER AHEAD

Two years ago, The Prudential Insurance Co. of America was in the Dark Ages of data analysis. But the company has quickly modernized and now has customer analysis capabilities that may rival the best in the financial services industry.

"Prior to two years ago, we didn't even have an analytic group," said Alan Satterlee, manager of customer modeling and analysis at Prudential in Newark, N.J. "But that's been changing fast lately."

Prudential is just now beginning to measure the results of its first marketing campaigns based on data analysis provided by the new systems.

To start, last summer the $37 billion insurance and financial services company flipped the switch on a new data warehouse project that connected separate business division data marts. At its core is a central data hub running on an IBM MVS mainframe. Data comes into the hub and is then fed into data marts and analyzed using Cognos Inc.'s Impromptu and PowerPlay software.

Most recently, Prudential added SAS Institute Inc.'s Enterprise Miner data mining software to its collection of tools for in-depth data relationship analysis. The tools will cut large data-crunching projects from as long as a year to as short as a month, company officials said.

Because insurance companies offer so many products, data warehousing has been slow to take hold in the industry because of the difficulties in integrating stovepiped systems, said Patricia Saporito, an analyst at Meta Group Inc. in Stamford, Conn.

"In order to have an effective [data] warehouse, you need an effective model, and getting disparate business units to agree on a model is usually like herding cats," she explained.

"But then once you achieve those commonalities, you can start to do better customer relationship management and data mining. Of insurance companies, Prudential may be in the lead" in this type of application, she added.

Now that Prudential has its data warehouse operational, the focus is on ensuring data quality and figuring out what data marts to add, said Pat Komar, a vice president of information systems at Prudential.

With the new system, Prudential analysts have started looking into which customers are most profitable, which are likely to leave the company and which might be most open to cross-selling.

The push for insurers to know their customers better comes from new competition. "We're competing with financial institutions now because customers are seeing other financial products as a substitute for life insurance," Satterlee said. "So we have to be that much sharper."