Does the EU Insurance Mediation Directive Help to Improve Data Quality? - A Metric-based Analysis

Abstract

Most financial service companies view the requirements imposed by the insurance mediation directive (IMD) as a tiresome administrative burden, causing high costs but providing little benefit. In contrast, this article argues that the documentation requirements demanded by the IMD lead to a higher data quality and also to higher economic benefits. A significant improvement is proclaimed regarding the data quality dimensions correctness and completeness. To substantiate this hypothesis, we develop two metrics based on existing approaches; one for correctness and one for completeness. The development is guided by six general requirements on data quality metrics. Moreover, a case study analyses the influence of the IMD on data quality by applying these metrics in a case study: Based on data from a major German insurance company, we illustrate how economic benefits arise from documenting particular categories of customer data (e.g. the customer’s professional background, his financial circumstances and his goals), while the documentation of other customer data categories does not provide similar benefits.