Companies need to leverage business intelligence (BI) more effectively to get the best value out of the data being generated. In the information-rich insurance industry, says Kelly Preston, data analytics manager at SilverBridge, this should be a strategic fundamental.
“The value of data lies in the actionable insights that can be drawn from raw information. However, the insurance industry is well-known for its unpredictability with customers changing policies (and insurers) as their requirements evolve. This puts decision-makers under even more pressure to closely scrutinise the data they have at their disposal and develop products that cater for these unique needs.”
BI, she says, is an invaluable tool in this regard.
“Insurers need to analyse the customer’s propensity to buy, sell, claim, or even lapse their policy. Using BI, the organisation gets access to important information that enable them to spot trends and changing customer behaviour more effectively.”
Information delivered through the BI platform can be used to improve retention by combining customer lifetime value models set by the insurer with the propensity to lapse. BI can also highlight the geographical areas and product combinations of customers, enabling the insurance company to gain a better understanding of its ability to improve the cross-selling rate.
Through using BI, the insurer can better understand their customer’s needs and wants and even educate them about products they might not know about. Insurers will also be able to view those products more likely to cater for new customer needs through the BI system. And while cross-selling happens as a natural course of any business, the ability of BI to enhance insights into identifying relevant solutions take this to the next level.
“In turn, BI enables the ability to draw scheduled reports that can be analysed to see what has happened historically in the business. The ability of BI to generate dashboards providing a visual representation of data, means the reports can more efficiently provide insight on how key performance indicators are achieved and what the problem areas are that need to be addressed,” says Preston.
Fundamentally, the insurance industry is all about making good decisions based on underwriting, regulation, upselling, cross-selling, retention, distribution, and numerous other components. The accuracy of these decisions lies wholly in the quality of information being accessed.
“BI can provide the insurer with the required leverage to gain competitive advantage based on the data at its disposal. But for it to work, the leadership inside the organisation need to be willing to embrace not only the (BI) platform, but also take the required steps to integrate it into existing business processes. Once this is done, data can be properly scrutinised and evaluated and products can be developed and customised to serve an increasingly fickle customer base,” she says.