Insurers today may be drowning in data but remain thirsty for actionable knowledge. Perhaps this drives 57% Insurance carrier globally to indicate that Insurance Business Analytics is one of the four most probable IT solutions in which they are looking to Invest. This is in line with Gartner’s view on top 10 technologies to impact Life Insurance
Many Insurers have business analytics strategies in place but many more are yet to seriously adopt it for various reasons. It is interesting to examine some reasons carriers often give for not investing in Insurance Business Analytics –
- We already have some reportingsolutions in place
- We don’t need to use Analytics
- We are thinking of this initiative
- We think it is too expensive to implement anInsurance Business Analytics
- Isn’t Analytics for bigger organizations?
- How does it help?
It’s evident that the benefit of Insurance Business Analytics is not clearly understood, though it is widely acknowledged that the historical data can be analyzed to gain incisive insights. Few even argue that Insurance Business Analytics answers some simple questions like;
- Which distribution channel is best performing?
- Where is an opportunity to upsell?
- Is there a pattern in claim that is received?
…and they already analyze this and generate reports periodically to answer these questions. While arguing they often overlook the fact that Insurance Business Analytics is not just reporting. It holds the key to optimized performance, informed decisions, actionable insights and trusted information. By bringing together all relevant information in an organization, companies can answer fundamental questions such as;
- What has happened?
- What is going right and what has going wrong?
- Why is it happening?
- Predict – what is likely to happen?
Not that the insurance companies are not mining their own data but the way they do it, is inefficient and time consuming. Problem lies in the fact that most of their data is generated by disparate systems and there is a possibility of the data present in different formats. Combining the data derived from disparate system to gain actionable knowledge through use of spread sheets cannot deliver information showing it from different dimensions. It is also possible that after doing an intensive exercise one may not derive information which allows view to minutest level and present them in most innovative manner.
In absence of a comprehensive BI solution, the operations folks may be spending considerable time on non-core and repetitive activities without considering the fact that there can be smarter way to do more with less effort thus increasing productivity and lowering associated cost implications. Some of the disadvantages of analyzing data without analytics in place;
- Your team may not have access to unified business data on a single click. Often teams spend a lot of their time trying to collate data from various systems or departments to create single version of the truth. As companies grow, the struggle deepens, resulting in a further dip in efficiency.
- Various departments would have various data/ report requirement and valuable time is lost to ensure work is done within the expected time-frame.A lot of time is spent chasing similar accounts across departments, building individual bridges, attending to duplicate leads or services requests across channels, etc. This drives up transaction costs and inversely impacts team productivity.
- Since manual reporting doesn’t allow you to slice and dice the data it is rather impossible to view data form different dimensions. Thus you may be losing critical opportunity to increase productivity and arrest revenue leaks. Isn’t it way to costly the value of which may not be readily accessed?
After analyzing how crippling it is without Insurance Business Analytics, let us look at some of its advantages –
- Analyzing region wise, channel wise, line of business wise, business growth and profitability and viewing snapshot reports on portfolio premium or policy count exposures during a period helps you take timely and proactive decisions.
- Measuring the turnaround time (TAT) for various operational process lets you know the operations efficiencies and points out process bottlenecks which if corrected in time would increase productivity.
- Evaluating the performance of various channels in terms of target v/s achieved premium in real time helps improve field force productivity. It is easy to target the most profitable agents and promote him to achieve higher targets.
- It is possible to detect pattern in claims outgo. One can do a time based, cost based and region based analysis to understand fraudulent patterns and take proactive actions to arrest revenue leaks.
- With the advantage of having a full 360° view of customers, carrier can easily find opportunity to cross-sell and up-sell to customers based on their buying patterns and profiles.Identify new customers by running marketing campaigns that ensure promotions do not target customers who have already purchased that particular product. Employ selective targeting of potential customers based on the buying patterns of existing customers.
Thus cost of implementing Insurance Business Analytics is far less than what you would already be investing in data analytics and to add to it losing the competitive edge can be far too pricey.
We at Hexaware have mature Insurance practice that brings industry knowledge to best of breed Business Analytics solutions and help insurance carriers to adopt Insurance Analytics in a systematic manner.
Write back your feedback or comments for further discussion.