While most insurers successfully use data to optimize underwriting pricing or claims costs, additional innovation and opportunities for business improvement can come from data about existing and potential customers (including the distribution network), and orienting all business operations around those insights.
Unfortunately, some insurers still struggle when it comes to making sense of the data, namely, understanding how data insights can give birth to new value creation that holds the customer in the center. As a result, these insurers continue to conduct business without the enhanced decision-making made possible by a 360-degree view of the customer.
Against the history of analytics being hyped as the Holy Grail, a recent Harvard Business Review report notes that the competitive advantage analytics gave companies early on has eroded a bit, largely because competitors built similar capabilities. “To keep forging ahead, companies need to continually develop more sophisticated analytics capabilities and applications,” note the authors of “Marketing in the Driver’s Seat: Using Analytics to Create Customer Value.”
There is no mistaking the urgency behind insurers’ need to acquire the best possible processes and solutions to help facilitate the growing need for analytics-driven insights. In fact, most ask these basic questions in order to advance to a more sophisticated approach that derives business intelligence from the analysis of data:
- What data do we currently have?
- Of the data we have, how much and what kind can be used to improve operations or identify new markets/new products?
- What data can we obtain that we are currently not capturing?
- What other data can we obtain and use to create additional insights?
- Finally, how can the data we have be structured and analyzed to produce greater value, information and insights?
The answers to these questions will inform the next – and most important – question as well as its potential answers, notes Barry Ralston, AVP, Business Intelligence at ISCS, provider of SurePower Innovation, a cloud-based modern enterprise suite that includes business intelligence software. “We can derive so much value from digging deeper and deeper into these insights,” he says.
Insurers recognizing that business intelligence represents an opportunity for value creation are on the right track. And, as the Harvard Business Review report points out, the effort and attention toward gaining sophisticated insights into data must be continuous. Therefore, successful insurers recognize the need to get on the fast track—putting systems in place in the cloud that can deliver these insights quickly.
Why? Because in the modern insurance marketplace, speed and agility are the new keys to competitive advantage.
“Imagine having an analytics engine and tools that get smarter the more you use them, and enable insurers to quickly visualize critical insurance data with reduced time from activity to analysis for more accurate and timely decision-making,” says Ralston. “It’s like having a conversation with your data.”
Although most carriers have not yet reached the highest level of [analytics driving insights] maturity, for many the journey is well under way, notes McKinsey in its “Transforming into an Analytics-Driven Insurance Carrier” report. “As carriers become analytics driven, they adopt new ways of doing business centered on analytics. Analytics shift from being an enabler to being the core way of doing business.”