Insurance Agent and Broker success depends on Big Data

The big data concept and how to leverage it hasn’t been lost just on the insurance industry. Even though the other sectors may actually be ahead, the insurance industry and risk were early adapters of data, in the foundation that was based on the law of large numbers and using actuarial science.

Where would underwriters be without big data mastery?

If you consider the volume of loss, fire protection, historical weather, and construction data that are analyzed by property underwriters; workplace injury and claim data scrutinized by workman’s Compensation carriers; exposure tracked and then analyzed by reinsurers with a respect to catastrophic events; developing morbidity and mortality tables used by health/life companies are just a few examples. So, you get the picture of an industry that has been able to manipulate, capture, and use amounts of data – big data – for most of the critical applications.

Although, the insurance industry may still be a baby when it comes to gathering and using all the relevant data that is out there. Consider the amounts of data within the industry that accumulates through thousands of transactions daily, but isn’t captured and used.

This is an important aspect of big data that the insurance industry has been missing and where it trails in other sectors. Success in getting and analyzing data holds the key to having greater efficiency, targeted marketing, improved client service and accelerated product development.

When it comes to the client side, the ultimate consumer of insurance and risk management services, the expectations are growing. Many industries are finding ways to capture and then use data about their company performance such as sales, distribution, operations and marketing, and then developing a sharper focus on the analytical tools that will drive performance improvements across their company. Clients are now starting to expect their agents and brokers to speak their language and provide similar types of analyzing capabilities.

According to the trends, it has been suggested that the insurance industry will need to strengthen their ability to capture, analyze, and act on the big data that exists through the distribution channel. In the daily interactions with clients, brokers and agents will get large amounts of data with few brokers actually using the data for external and internal benefits.

Meanwhile, the capability is there for agents and brokers to capture data, centrally house it, and use it various ways to improve performances and deliver better value to prospects and clients. These applications can bring plenty of benefits such as:

• ·         Enhancing collaboration abilities with insurers on new product roll outs, enhancement of coverage, and new opportunities for business
• ·         Expanding knowledge and access of insurer capabilities for prospects and clients
• ·         Evaluating workloads and performances of colleagues
• ·         Pinpointing growth and opportunity areas
• ·         Benchmarking client programs by geography, size band, coverage line and industry
• ·         Capturing and centralizing all placement data of clients

Despite all of the advantages that technology and analytics can bring brokers and agents, moving forward can be a real issue. New technology and processes will involve company commitment and an effective plan for implementation. Those who are in the process of making buying decisions may take advantage of observations from working with those who have been down this path:

·         Leverage internal resources for technology roll-outs. When you bring outside vendors in to help with implementing technology, will be a big mistake. Use your own IT tem, Human resources, and people from your units to help with training and to walk your employees through the features and capabilities of the new system. An outside vendor may not know your business, which could delay you from getting the benefits that were envisioned.

·         Win over the skeptics. Each company will have employees that don’t like change. While the top-down approach may have a bit of effect on gaining the confidence of these people, engaging them during the process will have better results. The new technology will make these colleagues more effective and big supporters of change.

·         Know your people. What is in it for your employees? In most cases, the systems are adopted and the value for those who work in the business but it isn’t realized. From the start of the selection process, find ways to engage your employees at all levels and client service. This helps to make sure that the adoption takes place and that there is a return on the investment.

·         Ensure that IT is involved. While purchasing technology is a business decision, you need to have your IT team involved with the implementation and selection processes.

·         Decision Making needs to be top down. For any business, getting technology is an investment. So senior management needs to be on board with it and supportive of the implementation process as well.

Although big data isn’t new, it still gives large opportunities for the insurance industry to achieve gains through distribution. Having an eye on the future, brokers and agents will be able to seize these opportunities through analytics, technology and an accurate total cost of risk calculation to have growth and better performance.