The Edge in Insurance Analytics: Agents

Data analytics offers insurers incredible advantages for better understanding customers, their motivations, and what they will be doing 12 months from now. But there's something many insurers have that continues to run circles around even the most powerful analytical systems.

Lara Lee and Daniel Sobo, writing in Harvard Business Review, say that running on analytics can be highly effective, but it has its drawbacks. “Data can reveal new patterns that point a firm in the right direction, but it can't indicate what to do once there. It reveals what people do, but not why they do it. And understanding the why is critical to innovation.

For example, they write, “think of the last time someone winked at you.” A wink can be a very effective form of communication that speaks volumes—but interpreting this gesture requires a deep, intuitive understanding of its significance and context.

Lee and Sobo observe that companies attempting in more meaningful, one-on-one engagements, including “in-depth interviews and in-home ethnography to better understand the psychology, unmet needs, and underlying values” of customers, may yield more success.

Here's where many insurance companies have the ultimate advantage. They maintain networks of agents—be they independents or direct employees—who make it their business to be out in the market, making face time with customers, getting to know them one-by-one. It may seem old-fashioned in some circles, but this is the not-so-secret weapon that will keep companies light years ahead of anyone attempting to purely compete based on analytics—no matter if they have a room full of supercomputers and all the latest data mining technologies.

Lee and Sobo's “wink,” for example, would befuddle even the most advanced IBM Watson, but it would be clearly understood by an agent.

Where does technology come in? Insurers need to keep investing in solutions that enhance communication and collaboration with their agents. Agents need to have access to all the training and support possible to provide the highest and fastest levels of service possible with their customers. Before pouring all that money into analytics software and servers, be sure there is enough investment in the most powerful and intuitive analytics system on the planet—agents.

Joe McKendrick is an author, consultant, blogger and frequent INN contributor specializing in information technology.

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