The thought of harnessing “big data” may seem daunting, but it could represent a useful tool for insurance advisors. With the right analysis, data can help you keep closer tabs on your existing clients, identify new sales opportunities and become more efficient in your day-to-day business.
The insurance industry already has access to massive amounts of data, including information about clients, in-force policies, pending applications, sales trends, claims and much more, says Michael King, managing director, Canadian operations, with DNM Analytics, a Dublin-based consulting firm that recently opened an office in Toronto. But few insurance industry players are analyzing and tapping into the value of that data.
“There is much discussion surrounding big data. And, sure, it’s a valuable resource,” King says. “But the real value in that resource lies in how you analyze large volumes of data. [There is] no sense in having a fridge full of food and not knowing how to open the door.”
Insurance advisors, in particular, can glean a variety of benefits and efficiencies from analyzing the data they have. For example, by analyzing all of your clients’ existing insurance policies – known as “in force” policies – you can keep track more effectively of which policies are coming up for renewal and any policy features or options that are about to expire.
“Some insurance companies don’t do a very good job of informing advisors that 10-year term-insurance policies are coming up for renewal,” says Michael Williams, president of BridgeForce Financial Group in Mississauga, Ont., and president of the Canadian Association of Independent Life Brokerage Agencies.
Clients, he adds, rarely pay attention to the details of their policies, including the conversion options, which often are available for only a limited time. By using data to keep track of such features, then informing clients when those features are about to expire, you can demonstrate your value to your clients.
“Most people, when they buy life insurance, forget about it,” Williams says. “If the client is forgetting about it, doesn’t somebody have a responsibility to remind them of these benefits they have?”
Any reason to get in touch with your clients presents an opportunity to strengthen your relationships and potentially generate new sales, says Gil Quesnelle, director of business development with Ticoon Technology Inc. in Toronto.
The more data you have access to, Quesnelle says, the easier it is for you to find reasons to get in front of your clients. He suggests using your in-force data to flag all policies that have been in force for more than five years. It could be worthwhile to contact those clients to find out whether their insurance needs may have changed.
You also could use your in-force data to identify clients who may be underinsured or who have a certain level of net worth. You then can customize your marketing and communications to various groups of clients, based on the products and services most relevant to each client.
“You can segment your client base,” Quesnelle says. “Then you can set up an engagement plan to go after those clients and talk about it.”
This strategy can translate into more relevant and targeted advice for clients, says King: “I think if people have greater visibility on their businesses, they understand their client base better. They will be able to give better advice to their clients.”
You can access in-force data through the insurance carriers’ websites. But that can be time-consuming if you deal with a variety of carriers. In addition, this data generally is delivered in a raw form that may be difficult to interpret.
“The challenge that the industry is facing is to extract the data from the various insurance companies and put it into a format that is user-friendly,” Williams says. “If the advisors got the information from the insurance company in a user-friendly format, that would help them to serve their clients.”
Various technology and analytics companies offer services to help advisors break down their data and understand it. Ticoon Technology, for example, offers a desktop platform that consolidates the information about all of your clients, including in-force policy data from multiple insurance carriers. You then can analyze that data and search through it using relevant criteria.
Similarly, DNM Analytics works with members of the insurance industry (as well as other sectors) to help businesses make sense of their data and convert it into a format that is useful and visually appealing.
“We’re trying to keep data analysis practical and relevant so that people can understand it,” King says. “It needs to be accessible, understandable and visual.”
In addition to in-force data, DNM helps insurance industry players access and analyze various other “external” data that can benefit their businesses. For example, demographic data can help you decide where to focus your prospecting efforts by revealing income levels and age patterns in specific communities and neighbourhoods. You also can use historical sales information as an indication of the sales potential within a community.
“The insurance advisor can use data more effectively,” King says, “to forecast sales in a particular region.”
Although the insurance industry has been slow to embrace data so far, King suspects that adoption rates will surge as advisors recognize the value of this tool.
“The data access in the insurance industry, in my opinion, is in its infancy,” he says. “There is so much more that [the industry]could be accessing.” IE
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