Use data to become a superstar in insurance

In today's business environment, data is not a luxury, but a necessity. The explosion of Machine Learning and Data Science in the last few years has proven without doubt that high-precision and actionable data gives businesses the capability to curate customers and build new targeted audience bases, and thus recognize new opportunities that might not have been identified before.

Current Challenges faced by the Marketers

According to experts, Insurance industry - one of the oldest industries that has always dealt with massive amounts of data in every aspect of their business - unfortunately, has not caught up with the concept of "identifying the right customers at the right time” as the rest of the world. As a result, they have not been able to fully capitalize on the data they already have and win new customers.

However, the industry is now beginning to respond to the changing demands of their consumers, and is beginning to recognize the cutting-edge data and technology can bring to the table and do much more than they have been able to so far.

A big problem that the experts emphasize in Insurance business is that of siloed data. The Insurance industry has traditionally always dealt with huge amounts of data, but it is scattered and fragmented through their various departments.

This prevents them from building a 360-degree vision that provides a clear and complete picture, preventing them from embracing a holistic strategy that balances tactical decision-making with strategic investment.

The traditional and complex problem of identifying, targeting, and converting customers across disparate channels remains. In fact, it has only grown even more complex with the emergence of the online world and the explosion of digital media and channels.

Yet another big practical problem that the Insurance industry faces is the “low-touch” nature of their business. Insurance companies usually do not have physical stores. Once insurance is sold online or by an agent, the Insurance organization loses contact with their customers until they make a claim.

In this vast interval between a customer buying insurance and making an insurance claim, the organization has absolutely no view into lifestyles of their customers. They have no way to identify their customers’ preferences, behavior patterns, and most importantly, the times when their lifestyle changes. For example, the crucial turning point in any customer’s lifetime is when they get married, buy a house, buy a new vehicle, have a child, etc.

These are the turning points when they are likely to change their insurance portfolio and fantastic opportunities for an Insurer to upsell and cross-sell their insurance products. But because of the lack of data on this, Insurance industry tends to lose touch with their customers, and also lose great business opportunities.

Considering these problems, how can the Insurance industry harness the power of the data they have to develop a highly effective strategy with emotionally intelligent and relevant messaging that helps them stay ahead of competition?

The Solution: Data-Driven Approach

By embracing and investing in the data-driven approach and data platforms that harness the power of ambient data, the Insurance industry can effectively and efficiently answer these questions and solve the problems it is currently facing without having to reinvent the wheel. Let’s see how.

A Data-driven approach forces you to unify your siloed data and present it in a usable form that can be effectively leveraged for various analyses. This is a concentrated, expensive, and time-consuming effort, but well worth your time and resources.

This is because you will finally have a single, consolidated view into your scattered and fragmented data, which is what your competition might be lacking, giving you distinct competitive edge. Also, with the availability of the integrated data and powerful analytics, you can also take quicker decisions, which in turn, leads to more efficient processes.

It is a well-known fact that new parents have a much higher chance of buying Medical insurance. Therefore, it is imperative for an Insurer to accurately identify and reach out to this demographic at the right time and sell them the insurance solution they are looking for. Investing in the right Data platform will allow you to do so, because these platforms not only unify your data, but also enrich and enhance it by augmenting it with the third-party data they offer.

To continue with the example of new parents, you can use these data platforms to capture this audience when they exhibit behavior of new parents (way before they actually become parents), such as using a pregnancy app, searching for baby names, or visiting nurseries. By doing so, you now have access to fresh customer base you can sell your products and services to.

To take it a step further, accounting for food habits can add another layer of effectiveness in creating offerings. For e.g. in Hong Kong, according to the recent research conducted by Near, 25% of the customers at health food restaurants are parents. Given this behavior and combining it with the current behavior of the new parents category, you can effectively define the premium that insurance companies should charge via targeted offerings.

By using this unified data, you can not only reveal your top markets, prospects, and customers, but also profile and understand your customer base better. This will allow you to offer relevant, timely, and better service to your consumers, helping you establish stronger and lasting relationships with your customers.

In addition, Data platforms today enable you to constantly monitor and analyze in real time the available consumer data and demographics, which can help you develop timely and targeted insurance products. For example, studies show that people invest in appropriate insurance whenever they achieve an important milestone, such as getting married, buying a new house, or buying a new vehicle, relocating to new city or a country, etc.

So, Data platforms not only help you identify new customers and convert them to existing customers, but also help you gain continuous and deep insights about these customers throughout their lifetime.

Not only this, but by effectively analyzing your customer base constantly, Insurance organizations can also reduce the claim settlement costs and times, and identify fraudulent claims in time

The Road Ahead…

It has been proven without doubt that new-age Data Platforms improve efficiency and effectiveness of marketing campaigns - from branding and awareness to new product launch. And the Insurance industry is no exception.

The disruption of the Insurance business has already begun, and the era of “intelligent insurer” is already under way. It is now for you to decide whether you will be a leader or jump on the bandwagon when it is already too late.

Also published in FinTech Innovation.