Insurance carriers that offer top-notch customer experiences are 80% more likely to retain customers than companies that don't. They are also more likely to cross-sell and receive referrals.
The secret to creating better customer experiences? Insurtech data.
Insurance technology or ‘Insurtech’ arose from the belief that the insurance industry was ripe for innovation. The data collected via these platforms can help carriers manage risk and maintain competitive rates by using analytics to improve claims, policy, and sales efficiency — but that’s just the beginning. By analyzing data trends to predict customer needs, carriers can also better support customers, suggest relevant products, close sales, and improve their bottom line.
The Benefits of Insurtech Data
Carriers can leverage data from Insurtech platforms to inform their business decisions in several ways. First, by collecting and analyzing data on policyholders' behavior and risk patterns, carriers can refine their underwriting processes and pricing strategies. This information can help carriers identify emerging risks, adjust pricing models to reflect actual risk, and optimize their product offerings to better serve customers.
For instance, carriers can use Insurtech data to segment customers by their risk profiles and tailor policies accordingly, which can improve customer satisfaction and retention. Additionally, data from Insurtech platforms can help carriers better understand customer needs and preferences, enabling them to develop new products that meet these evolving demands.
According to WTW, more than two-thirds of insurers currently rely on predictive analytics to reduce issues and lower underwriting expenses, and a majority (60%) say that data has helped increase sales and profitability.
Insurtech data can also help carriers streamline their claims processes and reduce costs. By using data analytics and machine learning algorithms, carriers can quickly identify and flag potentially fraudulent claims, minimizing payouts and reducing losses.
Finally, Insurtech data can be used to automate claims processing and settlement, improving efficiency and reducing administrative costs. By integrating Insurtech platforms into their operations, carriers can gain greater visibility into their business operations and performance, allowing them to identify areas for improvement and make data-driven decisions to optimize their business outcomes.
Some traditionalists look at insurtech as a disruption that is depriving the industry of its personalized touch and deep relationships. Undoubtedly, some insurance professionals will always prefer to do things ‘the old-fashioned way.’ However, by embracing insurtech and leveraging the power of data analytics, carriers can enhance their competitiveness in a rapidly evolving market and deliver more value to their customers.
Capturing New Opportunities With Insurtech Data
Insurtech data not only benefits carriers and the agents and policyholders they support, but it can also benefit brokerages on a larger scale by helping create new business opportunities and uncover previously overlooked ones.
To identify these opportunities and drive growth, brokerages must ask themselves the following questions, which can be answered with Insurtech data.
- What is our average time gap between initial contact and the first follow-up for relationships culminating in a sale?
- What is our overall lead-to-sale conversion rate?
- What is our lead-to-sale conversion rate per channel?
- Per customer segment, what is our binding rate?
- What percentage of new customers obtained in (specified period) came from customer referrals?
- Which segments of our customers are most likely to promote us on social media?
- Per customer segment, what are the best cross-sell and up-sell opportunities?
- Per product, what are the best cross-sell and up-sell opportunities?
- What are the common characteristics of customers who cancel or reduce their coverage with us?
- How long does it take the underwriting department to process an application and issue the policy?
- What is our customer lifetime value?
- What is our average deal (premium) size?
- What is our customer engagement level?
- What is our retention rate?
- What is our attrition rate?
- How many unique visitors do we have per marketing channel?
- How many of our leads are generated from paid ads?
- How many of our leads are generated from social media?
- What customer segment is the most likely to generate social media mentions?
- What are our biggest value-creation drivers?
- What is our claims ratio (number of claims/policy revenue) for (specific period)?
- What is our average payout per claim?
- What is our average time to settle a claim?
- What are our five biggest areas for improvement?
Think about what could be gained by having the answers to these and similar inquiries. By analyzing data trends to predict customer needs, carriers can better support customers, suggest relevant products, close sales, and improve their bottom line.
Final Thoughts
Simply put, using Insurtech data can provide insurance carriers with valuable insights into customer behavior, risk patterns, and operational performance, helping them refine their underwriting, pricing, and product development strategies, as well as streamline their claims processes and reduce costs. By embracing insurtech and leveraging the power of data analytics, carriers can enhance their competitiveness in a rapidly evolving market and deliver more value to their customers.
As more insurtech companies enter the market and refine their offerings, “traditionalists” may find themselves thawing somewhat in their attitudes.
