Big Data, Big Opportunity

In an industry that generates an immense volume of data every day, insurance executives are increasingly turning to new business intelligence (BI) strategies and solutions that provide additional, data-driven visibility into their clients, prospects, internal operations and broker and insurer relationships. Strategy Meets Action’s 2015 Insurance Technology Priorities and Spending report notes the top technology-oriented projects are focused around mobile and business intelligence/analytics, with data warehousing, predictive analytics and big data included in the mix.

For many executives, business intelligence solutions build on the established capabilities of traditional reporting. Traditional reports typically allow executives to examine “what happened” using data based on a defined set of criteria as of a specific moment in time. By contrast, BI solutions extend traditional reporting to focus on “why something happened” by using visual representations of data over time that are both interactive and multi-dimensional, thereby allowing brokerages to drill into a particular aspect of the business for deeper understanding.

So with all this data, where do brokerages start? First, storing, cleaning and organizing data is a complex task that requires an immense time and monetary commitment when managed internally. Second, brokerages must ensure data is being extracted correctly from their brokerage management systems and other integrated technologies before then accurately populating into an excel spreadsheet or alternate reporting asset.

To understand the complexity of these operations, consider the following scenario: A brokerage has 500 clients, 15 employees across three branches, and writes 25 policy types for four lines of business with 12 insurers. If the brokerage were to review its book of business monthly, quarterly, annually, year to year and year over year, it would result in 135 million different combinations of data to splice and analyze.

With business intelligence solutions, these exponential combinations of data are simplified in real time, with easy-to-understand visual illustrations of key performance metrics such as retention rates and hit ratios, as well as complex analysis of client growth, book of business trending, insurer response rate and employee productivity. By looking at data from multiple perspectives, executives gain greater business insights and better understand the cause and effect of what drives business and how to respond to new business and market opportunities.

As an example, when evaluating an organization’s book of business, an executive can cross-examine and splice data to do the following:

• identify coverage packages that are popular and profitable within one industry and determine new industries that need identical coverage;

• track active regions for business expansion and net growth;

• know the best insurers with the highest likelihood of writing specific types of business; and

• measure business activities against book of business trending, identifying efficiencies and improved productivity.

LOCATION, LOCATION, LOCATION

In the event of a catastrophic event, such as a natural disaster, business intelligence solutions enable an owner to instantly tap into his or her BI tool to visually identify which clients could be affected in the geographic area where the event hit. These tools can drill down into geographical maps to provide instant access to critical information, including when the event happened, who is impacted, what type of coverage a particular client has, was the client covered, and where the client’s assets are.

By quickly identifying this information, brokers can then proactively reach out to their clients to provide the level of personalized service and guidance that is expected from their roles as trusted advisors.

Additionally, geographic BI can visually identify new business development opportunities and monitor marketing campaign success by region.

If a brokerage increases advertising for a month in a specific suburb in its main city of operation to grow its business, the owner can evaluate sales in the region leading up to the campaign, during the campaign and thereafter. This analysis enables the owner to identify any change in the sales trend that could be a direct result from increased marketing activities.

PEOPLE MAKE OR BREAK THE BUSINESS

The insurance industry is a people-oriented marketplace that is defined by trusted advice and guidance. Business intelligence solutions can provide owners a better understanding of the most important determining factor of a brokerage’s success: its people.

To better understand the growth and profitability of a brokerage’s business, executives must closely evaluate employee productivity and revenue generating activities to accurately determine their impact on the growth and profitability of the business.

When trying to identify revenue per employee or top-performing account executives, BI solutions enable executives to dynamically evaluate employee performance and business development activities through dashboards that can be adjusted to visually provide different cross-comparisons of data.

One view can offer an overall snapshot of how each producer is driving revenue. Another view can rank producers by revenue, added lines, retention, attrition or a number of any other key business metrics.

The ability for executives to dynamically manage the ways in which they evaluate their employees’ performance enables them to better understand how their staff is driving business growth and profitability.

RELATIONSHIPS ARE EVERYTHING

When researching services for clients, brokerages engage with a number of insurer partners to find the best policy for their clients. Brokerages frequently place more business with insurers that are most responsive and provide the most competitive service.

The key to effective negotiations and profitable relationships with insurers is factual data. Executives now have the ability to track the performance of submission responses, declines and, ultimately, what policies were written with each of their insurer partners.

With a BI solution, executives can quickly review insurer response rates to provide clear visual proof that the brokerage is trying to actively engage with the insurer. Executives can evaluate specific success metrics for their insurer marketing activities, as well as compare multiple insurers down to the submission activities for each policy type.

BROKERAGES TAKE ON BI

As the need to provide higher levels of customized service and quickly identify new market opportunities grows, leading brokerages are beginning to evaluate how to incorporate BI tools and best practices into their regular business operations.

Multi-branch brokerage, Schill Insurance, is keenly focused on organically growing its business by empowering employees with unique business insights that allow them to further build strong client relationships and accelerate profitability. To better understand its business, Schill Insurance executives recognized the need to integrate business intelligence tools into the brokerage’s larger digital strategy.

Key focal areas for adopting a BI solution for quicker, visual analysis included employee performance, business performance trends year over year, and geographic analysis, specifically distribution of business and new marketing opportunities.

With a focus on expanding business into new regions and nurturing insurer relationships, an increasing need to quantitatively evaluate business performance and understand the “why” behind it was identified.

“Business intelligence will provide our business with a quick snapshot of what is going on in our brokerage – in real time,” says Kari Schill, operations manager and partner of Schill Insurance.

“By tapping into these purpose-built tools, all of the data ext
raction and calculations are managed in a matter of seconds. Being able to view trends year over year – including revenue per employee and revenue – through interactive dashboards provides the next level down of detail, enabling us to make more actionable decisions around next steps to build business in new markets with our strong insurer partners,” Schill points out.

The idea is to help the brokerage gain a competitive advantage in the Canadian market by tapping into the gold mine of data currently within its system, using that information to better service clients by being able to quickly identify coverage gaps and ensure brokers continue to deliver on their roles as trusted advisors.

Notes Schill, “Our investment in business intelligence will empower our business for the future. It will allow us to make business projections and put strategies in place to ensure we are successful in driving continued growth and profitability.”

Business intelligence solutions have become a necessity for companies of all sizes, industries and verticals to be highly competitive in today’s marketplace.

These are designed to bring insights to help refine a brokerage’s decisions, permeate client, insurer and employee discussions, and, it is hoped, create big opportunities for new business and more profitable relationships.