By Roi Agababa, CEO of Novidea
The insurance industry has and always will be a data-heavy industry. Insurance distribution professionals have to obtain a lot of data from their customers when writing policies, but more often than not, they do not have capabilities to turn data into profits. And the prime reason for this is usually a combination of poor data quality and not having the right tools.
It follows, therefore, that agents, brokers, and carriers need to up the ante when it comes to data. Eliminating poor quality data needs to be the first port of call, but to do this they need to know how to identify it. Generally, bad quality data can be defined as information that’s either incomplete, out dated or duplicated. This can come in the form of customer records missing vital information or having two sets of information for the same client, both of which make it impossible to obtain an accurate picture of the business or the customer.
Putting data to the test
With so much data at their disposal, insurance professionals should be able to get real-time access to a whole host of insights that can help them make better, more strategic decisions, which in turn will help drive the business forward – we call this data monetisation. By pulling together all of this information into one single data repository, they could apply analytics and customer intelligence capabilities that generate actionable insights, such as who are the most profitable customers, which lines of business are performing best, what is the total income a customer brings in versus the cost of service. Quantification of time, resources and effort enables accurate profitability analysis and the ability to reduce operational costs. It turns data into action for improved renewal rates, and more importantly the ability to easily identify accounts in the red and convert them to green.
By having a full picture of the business at any point in time, brokers can make decisions based on fact. However, if the data behind these decisions is inaccurate, there’s no guarantee the decisions made will be the ones that ensure profitability and business growth.
It’s a well-known fact in business that retaining existing customers is less costly than attracting new ones, so companies really need to invest in optimising the customer journey. By leveraging the customer data they already have, brokers can easily engage more personally with their customers and offer tailored advice that accounts for their personal preferences. Furthermore, with quality data, brokers can create a 360 degree of the entire business and the customer, which allows them to effectively identify cross-sell and upsell opportunities. Not only is this approach good for business, it also gives the customer a better experience, which is particularly important given that today’s customers now have the choice between buying directly or going through an intermediary. By creating a more personalised experience, brokers can build customer loyalty, reduce churn and ensure they cement their place in the value chain.
Better data, better business
The impact of poor quality data is clear – and the benefits of having the right data i huge. Brokers therefore need to ensure they are making every effort to focus on improving their data. To do this, companies need to invest in technology but also encourage a company culture that appreciates the value of quality, clean data. By showing what can be achieved, companies can foster a healthy relationship with this information and empower employees to manage, analyse and store data in a way that delivers the best results for the business and for optimising their customer journey.
Technology has been developed in such a way that it can now force users to input data correctly and, in doing so, eliminate poor data quality at the source. Use of modern data-driven technology ensures that processes are being standardised across the entire business. Furthermore, by carrying out regular data cleansing programmes, companies can ensure that they keep their data accurate and up to date.
Years of aggregating data across siloed systems and manual processes have left insurance professionals with a deluge of data that they are struggling to turn into actionable insights. As a result, many of the systems in place not only create inefficiencies, but also fail to meet customer expectations. By creating a culture that understands the importance of data and investing in modern insurance management technology, insurance distributors can turn this on its head and ensure they create a customer-centric business that makes decisions based on accurate, actionable insights.