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🗂️ '''Master data management (MDM)''' is the discipline of creating and maintaining a single, consistent, and authoritative source of critical reference data — such as [[Definition:Policyholder | policyholder]] records, [[Definition:Insurance broker | broker]] identifiers, [[Definition:Insurance carrier | carrier]] entity hierarchies, and [[Definition:Line of business | product]] classifications — across an insurance organization's systems and processes. Insurance operations generate and consume data from dozens of platforms: [[Definition:Policy administration system | policy administration]], [[Definition:Claims management | claims]], [[Definition:Billing | billing]], [[Definition:Reinsurance | reinsurance]], [[Definition:Accounting | accounting]], and distribution systems all hold overlapping but often inconsistent versions of the same entities. MDM provides the governance framework, technology, and processes to reconcile these records into a trusted "golden record" that every downstream system can reference.

⚙️ An MDM program typically begins by identifying the core data domains that matter most — in insurance, these usually include party data (customers, agents, [[Definition:Third-party administrator (TPA) | TPAs]], claimants), product data ([[Definition:Coverage | coverages]], [[Definition:Endorsement | endorsements]], rate structures), and organizational data ([[Definition:Legal entity | legal entities]], branch hierarchies, [[Definition:Lloyd's syndicate | syndicate]] structures). The MDM platform then ingests records from source systems, applies matching and deduplication algorithms to identify which records refer to the same real-world entity, and merges them according to survivorship rules that determine which source is authoritative for each attribute. Ongoing stewardship processes — often involving designated data stewards within [[Definition:Underwriting | underwriting]], claims, and finance departments — ensure that new records are validated against master data before propagation. Modern MDM solutions expose master records through [[Definition:Application programming interface (API) | APIs]], enabling real-time consumption by [[Definition:Insurtech | insurtech]] applications, [[Definition:Analytics | analytics]] platforms, and [[Definition:Regulatory compliance | regulatory reporting]] engines.

💡 Without effective MDM, insurers face compounding operational and strategic risks. Duplicate policyholder records can lead to inaccurate [[Definition:Exposure management | exposure aggregation]], meaning an insurer may not realize the full extent of its [[Definition:Concentration risk | concentration risk]] until a catastrophic event reveals overlapping policies for the same insured. Poor data quality inflates [[Definition:Expense ratio | expense ratios]] through manual reconciliation and rework, undermines [[Definition:Reserving | reserve]] accuracy, and complicates compliance with regulatory regimes such as [[Definition:Solvency II | Solvency II]]'s data quality requirements and [[Definition:IFRS 17 | IFRS 17]]'s granular measurement demands. As insurers pursue [[Definition:Digital transformation | digital transformation]] and deploy [[Definition:Machine learning | machine learning]] models for pricing and claims triage, the axiom "garbage in, garbage out" makes MDM a foundational prerequisite — not a back-office luxury.

'''Related concepts'''
{{Div col|colwidth=20em}}
* [[Definition:Data governance]]
* [[Definition:Data quality]]
* [[Definition:Policy administration system]]
* [[Definition:Digital transformation]]
* [[Definition:Straight-through processing (STP)]]
* [[Definition:ACORD data standard]]
{{Div col end}}

Definition:Master data management (MDM) - Revision history

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