The COVID-19 pandemic disrupted the way many companies do business, and insurers are no exception. A Deloitte survey found that 48% of insurance executives agreed the pandemic “showed how unprepared our business was to weather this economic storm,” while only 25% strongly agreed their carrier had “a clear vision and action plan to maintain operational and financial resilience.”1
Although premiums flatlined or declined in 2020, the industry is predicted to achieve a 3% growth in 2021.2 In order to ensure growth this year and beyond, insurance companies need to invest in data. There’s a wealth of information that can be gathered from the internet of things (IoT – objects and appliances connected to the internet), mobile devices, social media, and credit reports. Insurance companies can tap into that data to acquire new customers, personalize products to fit changing customer needs, and streamline internal processes to better serve policyholders.
As we head into 2021, insurance companies need to invest in data and technology in order to maximize their market share and stay ahead in a competitive industry.
Here are 5 ways the insurance industry can improve performance, productivity, and maximize market share:
Customer acquisition has become even more crucial as the insurance industry grapples with changing consumer needs and market disruptions. This is how data can drive acquisition:
Brand example: A top 5 US health insurer uses data to deliver localized acquisition programs
A recent merger gave this Data Axle health insurance client access to valuable data owned by their partner. Data Axle’s team was tasked with combining and standardizing all of the data and leverage it to boost acquisition efforts and build a more complete view of their prospects and customers.
Data Axle’s database solutions provided a centralized location for the insurer’s integrated database as well as advanced targeting and real-time messaging capabilities – all while remaining compliant with industry regulations. Data Axle then helped the insurer create geo-targeted acquisition campaigns – combining location data with demographic audience attributes such as age and occupation to target consumers with products that served their specific needs and were available in their area. The results? A 32% reduction in disengaged website visitors leading to better conversion rates, an impressive 5 percentage point increase in lead quality and an 8.2% lift in acquisition rate.
Want to know more details? Read the full case study.
The cost of gaining a new customer in the insurance industry is high, which means increasing retention rates by just a fraction can translate into major growth without the price tag that comes with acquisition. Data is key to providing exceptional customer experience.
The underwriting process – properly calculating the risks and coverage of clients – can be very time-consuming. Here’s how data can help:
a. Automate your underwriting process: access to real-time data can help you simplify and automate the underwriting process by pre-populating claim questionnaires, as well as correcting and verifying questionnaire data as it’s being populated.
b. Accurately assess customers’ risk profiles: accurate and up-to-date data helps insurers perform more accurate risk assessment and potentially decrease costs. For example, as policy pricing requests come in, they can be bounced against Data Axle’s real-time database to create a robust profile of the applicant. That profile can then be run through a model that assigns a risk score to the prospect. The risk score helps insurers understand where a consumer profile stands and how the policy price should be adjusted to reflect low or high-risk profiles This process saves insurers time, money, and resources as they can significantly shorten the vetting process.
Insurer Allstate monitors their customers’ driving in real-time and uses that data for underwriting purposes. Allstate filed a patent on a game-like system where drivers are put in groups. Customers in the same group can monitor driving scores in real-time. The hope is that these scores will encourage better driving to improve the group’s overall score. The better the group’s score, the better the rewards they will receive from Allstate for their responsible driving.3
Knowing who your ideal customers are and knowing how to communicate with them are two different things. Marketers and agents need data in order to provide personalized, relevant messaging to their target demographic. Luckily, consumers are willing to share their information; in fact, a recent survey revealed that 80 percent of consumers will share personal data in exchange for benefits such as competitive prices, faster or priority service, and more relevant content. Insurance companies can use this information to create more compelling messages, thus improving conversions and engagement.
Brand example: Aviva
UK insurance provider, Aviva, created their Shape my Future tool to give consumers a fun and interactive way to plan for their future. Consumers can answer questions about their lifestyle and retirement goals and the tool provides helpful suggestions on how much retirement income they will need to set aside. The data collected with this tool not only helps customers and prospects, but it gives Aviva important information that can be used for remarketing and acquisition campaigns, as well as to shape product strategy.
Good data is a solid investment for organizations looking to find and retain top talent. A quality employee is hard to find, but with the right data, organizations can:
Data is transforming the way insurance companies are doing business. However, simply buying data and dumping it into a CRM isn’t going to cut it. Turning this data into valuable insights requires technology and services that can easily capture, store, analyze, display and report on information from myriad sources. These insights provide business leaders with the information needed in real-time in order to make better decisions.
For more insights, download our insurer’s acquisition playbook, featuring real-world examples of insurance companies who have achieved success through data-driven initiatives.
As Content Marketing Manager, Natasia is responsible for helping strategize, produce and execute Data Axle's content. With a passion for writing and an enthusiasm for data management and technology, Natasia creates content that is designed to deliver nuggets of wisdom to help brands and individuals elevate their data governance policies. A native New Yorker, when Natasia is not at work she can be found enjoying New York’s food scene, at one of NYC’s many museums, or at one of the city’s many parks with her two teacup yorkies.