Developing a data-first mindset in insurance
Just like other industries, digitization means insurers are able to collect a plethora of customer data – yet unlike other commercial organizations, this industry has been slower to incorporate this information to enhance business lines or models and capture the full value of data and analytics.
The industry is ripe for transformation, and insurance carriers cannot afford to ignore the need to adapt in a digital world. Yet the way they adapt is paramount to success; if solutions are not integrated on the front and back end, they risk confusing or alienating the customer – or operating in internal siloes where data cannot be collated and incorporated in a meaningful way.
Designing a digital platform and modernizing the customer experience is essential for continuing success, and carriers that do it well have a unique chance to get ahead of the pack today.
The value of a data-first mindset
Unlocking the power of data starts with a mindset. It is a powerful positioning for insurance carriers to view themselves as data companies first, incorporating that information across all facets of the organization – from underwriting and policy creation to sales distribution, marketing and claims. If leaders understand and leverage the power of data, carriers can apply valuable insights to help them grow rapidly.
Retailers are a good example of how this comes to life. They no longer wait for sales reports to tell them how consumers are reacting to their products; they capture real-time details about the consumer online that teach them new ways to streamline their sales process or market products that are most aligned with consumer interests and needs.
The faster carriers become experts in data management, the better they will be able to use data to revamp claims, underwriting and every other area of the organization to better serve the consumer. To do this, C-suite leaders need to rethink their approach to change with advancements in technology that are available and learn from what other industries are currently doing with big data, so it can allow them to offer clients data-centric solutions.
Several ways that insurance carriers can start identifying new applications of their customer data may include:
- Enhancing existing business models
- Strengthening channel relationships
- Changing relationships with consumers
- Redesigning products
- Creating new business models
Implementing a 360-Degree Customer View
The insurance industry provides solutions to varying risk needs of both individuals and business owners, which results in multiple contractual relationships with the same customer and household. They should not be afraid of the data and the way they are using that information.
The challenge most insurance carriers are currently having though is that they cannot get a 360-degree view of the customer. While some smaller-scale organizations are starting to do it, bigger firms are challenged to navigate and integrate complex operations. Yet it is this consolidated view of the customer that will help build a longer-term relationship for the future.
Having a comprehensive view of customers in a digital environment is essential to differentiation from competitors. For customers to get a holistic experience from beginning to end carriers need to make sure to update back end solutions as well – you cannot singularly make a long-lasting customer experience on the front end if you fail to support that same streamlined experience once the customer is acquired. Customers’ value personalized experience.
The life cycle of a customer with respect to an insurer is:
- Know your prospect
- Acquire customers
- Engage and service
- Show empathy
- Create a profitable and long-term relationship
Overall, carriers need to determine what data they are looking for, get a holistic approach of the data, understand that it is very costly, and revolutionize all processes when they are transforming a product.
Building a successful model needs to start at the top
Not only is harvesting and incorporating data into decision processes beneficial, but it is also a huge investment. Business leaders must make the investment to ensure customer retention and acquisition, or risk extinction. It is essential to integrate solutions at every point of the business – and not operate in siloes to prevent fragmentation.
Data is not going anywhere—in fact, it is taking us forward. Data is a tool that can bring many positive changes to the insurance industry, in the form of better customer service, more efficiently priced premiums and a reduction in the overall harm caused by fraud. Carriers need to continue to embrace the data to provide efficient services, support and marketing.