This is a unique time for the insurance industry. The world is changing rapidly, and the demands of customers are changing along with it. More than ever before, insurance companies need to turn to the data to see what’s working and what needs to be improved. Specifically, companies are looking at big data, which includes huge volumes of structured and unstructured data.
With so much data available today, accessing those numbers isn’t the problem. The real struggle is making sense of big data without getting completely overwhelmed or distracted by less meaningful metrics. We’re going to help you decipher the meaning behind the numbers, as well as how you can use your data to improve your marketing and sales efforts in the future.
Collecting data is an important step, but without making sense of the data, you’re missing a huge part of the puzzle. So here’s a look at some of the most common metrics in the insurance industry, and how they can improve your business overall.
Customer Acquisition and Marketing
Social media and online behavior provides a robust source of data, meaning it’s easier than ever for insurance companies to find ideal customers. It also allows you to offer the best product for a potential customer’s needs, and make the most of your advertising dollars.
Marketing plays a tremendous role in customer acquisition, but it can be challenging to understand the full return on investment. This is when you have to really dig into the numbers. Consider how your campaign affects lead generation, brand awareness, and referrals. These markers can give a much deeper insight into what’s working.
Email marketing is another valuable way to gauge your marketing and communication efforts. Email campaigns can show you what your subscribers open and click on, what engages them, and which messaging resonates best. It also allows you to create sales funnels, which can illustrate exactly how your potential customers are engaging with the buying process, and where you might need to make improvements.
Underwriting uses a wide range of data to improve accuracy and efficiency. According to an analysis from McKinsey, underwriting excellence is one of the top key traits that industry leaders have in common. Using data is a highly effective way to boost underwriting performance.
There are several different ways to use data to streamline the underwriting process. One example is telematics, which collects data on a potential policyholder’s driving behavior. Through the use of a device or a vehicle’s information system, underwriters can access a driver’s speed, braking patterns, acceleration and more. Some companies also use wearable devices for life insurance underwriting, or smart home data for detecting potential risks. All of that data is used to make more thorough underwriting and pricing decisions.
Customer retention is critical for insurance providers. According to IBM, customer acquisition expenses have been consistently rising in the insurance industry, up to 17.9 percent in 2022.
That means that keeping customers happy translates into major savings and increased revenue.
Data can certainly help provide a better customer experience. Thorough, well-organized data about your customers and their history with your company means you can provide better solutions faster. Knowing where your customers are in their lives means you can offer products that make sense, and alert them to potential savings they might be entitled to.
Security and Fraud Prevention
Handling sensitive information leaves insurance carriers vulnerable to fraud. According to the 2022 Insurance Fraud Report, 37 percent of insurance organizations said they could improve their fraud-fighting efforts by measuring fraud metrics. And 52 percent of survey respondents said poor internal data quality was a key challenge in fighting fraud.
As the insurance industry continues to digitize, fraud is an increasingly concerning issue. But with strong data and meticulous software, red flags can be caught and dealt with much more effectively.
The Bottom Line
If you aren’t using your data to its full potential, you could be leaving money on the table - and missing opportunities to improve customer experience. As the insurance industry becomes even more competitive, big data could be the edge your company needs to stand out.