5 ways insurers can use data to maximize market share

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:

1. Use data to drive customer acquisition

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:

• Identify anonymous web traffic on your site
  Identity resolution uses unique identifiers to decipher who is engaging with your content and match their identity across devices and channels. This allows insurers to know which products customers are interested in, what their behaviors are, and what their paths to purchase look like – information that is invaluable for personalized digital campaigns and display retargeting ads.
• Find new prospects who look like your best policyholders
  Look-alike modeling allows insurers to zero in on prospects who resemble their high-value, loyal customers, making for a greater chance of conversion. Look-alike modeling can also help mitigate risk, since it enables you to find prospects who are similar to your most profitable customers.
• Leverage intent data
  Intent data allows agents to identify prospects who might be likely to leave and prevent that loss by offering them products that are more relevant to their needs. On the flip side, intent data can also be used to identify prospects who are in-market for your products and allow you to target them with timely, relevant, and persuasive messages.
• Improve lead scoring and routing
  Fresh leads, better lead scoring, and more efficient lead routing are necessities for any insurance company. Data gives you the insights you need to find the most valuable leads, identify your ideal customer segments and cater to their unique needs and behaviors. These insights allow insurers to use automated lead scoring and routing to:
  • Predict a prospect’s specific needs before pitching a product or service
  • Prioritize leads with a higher likelihood to convert and/or a higher lifetime value
  • Lower acquisition costs
  • Increase the likelihood of conversion

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 data management 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.

2. Develop actionable insights to retain and upsell current customers

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.

• Know when to cross/up-sell
  Having up-to-date information on your customers means you know when they are in the market for new products and can engage them with the right product at the right time, resulting in better sales.
• Understand why your products aren’t working for a certain audience segment
  Data enables insurers to identify the common thread among customers who decide to leave your company. This means you have the power to understand why your products aren’t working for a specific customer segment and either change your messaging or add new product features that cater to this segment’s needs.
• Utilize life event data to upsell and cross-sell
  Insurers can use life event data to identify when their customers are undergoing a life change and personalize marketing efforts to highlight products that speak to this new stage in the consumers’ life – be it buying a house, having a baby, getting married, etc. For example, if a customer is approaching the age of 65, they would be a good candidate for a supplemental medical policy.
• Stay in touch with personalized, automated messaging
  Agents have more ways than ever to stay in touch with their clients, but many fail to do so when things are going well. A constant flow of communications is necessary in order to maintain a solid relationship with most clients, regardless of the industry or economic landscape. Clean CRM data provides the insights needed to craft personalized messages and know when to send them to prospects and clients to keep them engaged with their agent.

3. Accelerate the underwriting process

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.

Example: Allstate
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

4. Get the right message to the right audience

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.

5. Recruit new agents and refresh your talent pipeline

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:

• Identify licensed professionals in a targeted geographic area and reach out to them using their business or personal contact information.
• Keep agents motivated. Good data provides more well-vetted and qualified leads to your sellers, which leads to better success rates and ultimately translates into longer-term employee retention.

Conclusion

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.

_{¹ https://www2.deloitte.com/xe/en/insights/industry/financial-services/financial-services-industry-outlooks/insurance-industry-outlook.html
² https://www2.deloitte.com/xe/en/insights/industry/financial-services/financial-services-industry-outlooks/insurance-industry-outlook.html
³ https://www.insurancethoughtleadership.com/data-opportunities-in-underwriting/
⁴ https://www.accenture.com/us-en/insights/insurance/consumer-study-2019}