The Intelligence of Using B.I.

In the face of uncontrollable market factors such as extensive consolidation, heightened competition and an unpredictable economy, insurance companies must look for new ways and new tools to help them adapt. Insurers need to be agile and able to anticipate customer needs to maintain a competitive edge. Amid this market turmoil and the continued drive for success, one thing remains constant: insurers are custodians of massive amounts of valuable customer data. Having the means to turn this data into a strategic business advantage is the key to creating improved customer service and developing new products that meet their needs. Enter business intelligence (BI).

BI refers to sets of technology tools that can help insurers do things with their data that are typically very expensive and are therefore overlooked as a means to increase a company’s competitive advantage. BI allows for better capture, management, analysis and extraction of the hidden value of corporate data. It provides a deeper level of insight into raw data in its various forms and locations. With a better understanding of customer demands, BI turns what would otherwise be a risky guessing game into strategic, informed decision-making about tailored products that meet the needs of the market.

With that in mind, consider the challenge faced by agents and insurers every day. The business landscape is diverse and business owners expect policies to be specialized. Understanding the finer points of a prospective customer’s business can be a daunting task for any agent, and can be the difference between gaining or losing a client.

For example, nearly 98% of Canadian businesses are classified as small-to mid-sized.

Segmenting this large group according to the type of business, personal attributes, profit potential, and even attitudinal information that will help shape a sales pitch, is an essential first step in drawing up a suitable policy.

In the absence of BI tools, an agent might be forced to rely on several people to search manually for data in a number of places on the corporate network. If they manage to source the requested information and its quality is good, the next step would be to manually analyze it in an attempt to derive insights that may help to determine risks or opportunities to up-sell. Instead of employing a fast, automated, easy-to-understand BI solution — one that features a single point of reference — an agent may find himself or herself slowly fumbling their way through a tedious patchwork of systems that may or may not reveal useful information. Not only is this labour-intensive guesswork a significant risk to the insurer, but it’s usually enough to make a customer take their business to a more informed agent.

WHERE DOES THE DATA COME FROM?

In simple terms, information drives the insurance industry. Data is the basis for market reports, customer profiling, research and product profitability. It also allows for statistical analysis, aligning budgets and is a core part of compliance regulation. Years of corporate mergers and acquisitions have created increasingly complex “melting pots” of corporate cultures and consequently a mix of IT systems and the data that reside within them. This complexity creates “silos,” or self-contained pools of difficult-to-access data, making the completion of these important tasks very difficult, costly and time-consuming (not to mention inaccurate). As a result, the ability of insurance company product developers and outside agents to do their jobs falls short of what the market demands.

Navigating these challenges in order to develop better-tailored customer products requires new technology tools. BI is the key to unlocking these complicated problems. Rather than a stumbling block, data management becomes the foundation for any insurer.

UNDERSTANDING CUSTOMERS BETTER

Customer service within the insurance industry has traditionally been viewed as an area in need of improvement. In fact, only 56% of the 18 Canadian property and casualty executives interviewed by Financial Insights researchers listed it as a top concern. As demographics shift, gaining insight into customer needs must be a priority if agents expect to acquire new customers, cross-sell, up-sell or simply retain the customers they already have. Thankfully, the road to a more customer-centric business model can be a short one.

Smart, tailored insurance products can dramatically improve customers’ perceptions of quality and service delivery. BI’s integrated technology gives agents a more comprehensive picture of their customers. More importantly, it allows agents to respond to customer requests and queries quickly. Using the time BI can save, agents can spend more time with their clients. In addition, new products will become more profitable as go-to-market costs decrease.

INFORMATION = AGILITY

Streamlining processes, efficiency gains and faster response time are not the only goals when using BI to address the problems of inherited, disparate legacy systems. It’s also about mining information to maximize all opportunities and potential returns.

More detailed and accurate data give employees the tools to identify and respond to market trends. For example, comprehensive detail presented through the use of BI will allow underwriters to assess risk distribution easily and according to multiple variables such as geographic area and age demographics. Actuaries, claims departments and even marketing teams can take advantage of standardized reports and data measurement, giving them the flexibility to react to and even predict changes in the marketplace.

Forward-thinking companies have been very effective in identifying how BI technology can improve their business. With hundreds of thousands of transactions per month and several terabytes of data to manage, insurers have leveraged BI products as a strategy for arming employees with precise detail to be more self-sufficient and accurate decision-makers. Sales and marketing teams can use BI to assess new business performance and quickly correct their course if and when losses are incurred.

Insurance is not a one-size-fits-all matter. Customer interaction and policy writing, product development, risk assessment and remaining competitive in the face of tough economic headwinds means insurers have to make smarter decisions about putting their data to work for them. The day of the unmanageable and inaccessible pool of data is long gone. BI technology represents a quicker path to creating competitive and strategic informational assets, amounting to time saved, intelligence gained, employees empowered and customers satisfied. These business imperatives can make the biggest difference between business gained or lost.

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Sales teams can use BI to assess new business performance and quickly correct their course if and when losses are incurred.

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In the absence of BI tools, an agent might be forced to rely on several people to search manually for data in a number of places on the corporate network.