For insurance companies, migration projects open the door to the new, digitalized world. The valuable databases that have grown over the years for the industry from often out-of-date application landscapes are extracted to migrate them into modern systems that can handle the current challenges of the industry.
But how can personal data be protected during this important modernization process?
Insurance companies and their treasure troves of data
Insurance companies have experience gathering large quantities of personal data. This is a central part of their business model. This is not just limited to addresses, birthdays or health data. Insurance companies are developing more and more into data-driven companies with telematics tariffs in car insurance and fitness trackers in health insurance - if they haven't already done so.
From the point of view of the companies, the collection of constantly growing amounts of data is only logical. The more relevant data they collect that can be evaluated, the better risks can be assessed. However, the industry has already continued thinking ahead and has long since been viewed as a customer partner. The aim is to counteract damage preventively with the help of Smart Services and comprehensive customer support. With the help of the collected data, they want to move away from being claims adjusters and towards being "claims preventers". Important success factors for companies in the sector will therefore be the quality of the data collected and the conclusions that can be drawn from it.
Treasure trove of data meets data protection - GDPR and the Code of Conduct
Against the backdrop of the transformation in which the insurance industry finds itself, the protection of personal data continues to be an important need for policyholders. Customers can allow insurance companies to collect a variety of data in order to possibly receive discounts or vouchers if, for example, they are particularly careful on the roads. The basis of such offers is the trust of the insured individuals that the data will be collected, stored and used responsibly and securely. A framework for this has been created in Europe with the General Data Protection Regulation (GDPR). The protection of personal data against misuse, which is a fundamental right of every individual and is laid down in this EU regulation, is given concrete form in the German insurance industry by the Code of Conduct(CoC). Insurance companies who voluntarily agree to comply with the code therefore agree on a common set of measures to safeguard the protection of the data they collect and process. The complexity associated with the implementation of the CoC, especially in old application landscapes, should not be underestimated.
Already when applying for an insurance contract, data is recorded in the various systems from an insurance company. Depending on the product and tariff, a wide range of information is added during the contract period. This data is stored and processed in several systems in the company's application landscape. Should this insurance contract now be terminated, the data of this contract must be specially protected from this point on. Initially, it may be necessary to block access to this data. After the legally defined retention period for the respective information, the data concerned must then be deleted. Without a trace and final. To do this, the request to delete the records is sent past various veto instances to the systems in the application landscape. The data is then irrevocably removed from the systems in a defined sequence and the proper execution is logged. What the Code of Conduct means in implementation beyond this example for the system landscapes from insurance companies is explained in detail in this article.
Modern system landscapes as the basis for transformation
If insurance companies want to keep up with the competition and not be left behind in the realignment of the industry, the often heterogeneous and historically grown system landscapes must give way. For those who want to map the innovative tariffs already mentioned and at the same time convince the customer with smart services and supplementary service offers will have to consider whether applications from the last century are adequate solutions for these tasks. Probably not. Therefore, a decisive cornerstone for successful realignment will be the switch to modern and unified systems. In this way, in addition to embedding the additional functionalities just mentioned for smart services and the like, the efficiency of new processes in the companies' operations can be increased. In addition, compliance with the aforementioned regulations on data protection and CoC for old application landscapes in particular proves to be a major challenge that can be solved as part of a data migration process to a modern target system landscape. For this purpose, it must be clearly analyzed in advance which parts of the inventory are relevant for the migration, so that at the same time superfluous data can be disposed of in the course of the migration. Furthermore, if the challenges of complying with the CoC are holistically considered and solved in the future application landscape, companies will not only benefit from better systems and the associated advantages, but they will also be able to manage the protection of personal data much better and more efficiently in the future. Insurance companies are obligated to provide this protection throughout the migration process. Data migration processes are also subject to the aforementioned regulations on data protection and the Code of Conduct. Thus, without software-supported compliance with data protection requirements, these already highly complex migration projects become an even more difficult task for insurance companies.
So will the transformation of the insurance industry ultimately fail due to the highly complex data migrations it entails or the strict data protection regulations of the European Union? It doesn't have to. However, insurance companies must pay particular attention to maintaining due diligence in protecting customer data as they move towards future-proof businesses with system landscapes that can meet the challenges of new, flexible and data-heavy insurance tariffs. Data migration is one of those places where the industry's desire for digitalization and personal data protection legislation collide. Thus, CoC compliant data migration processes are necessary for the realignment of the industry. How our tool for data migration,the MIGSuite, can help you in your specific case is answered by our team of migration experts.