Historically, no industry has embraced data as much as the insurance industry. Ever since two ministers of the Church of Scotland used modern actuarial science concepts to set premiums and annuities for the Church’s ministers and beneficiaries, data, in the form of actuarial science, has been the bedrock of the industry.
Today, the challenge of big data provides a new opportunity for disruption, particularly in marketing, campaign, and fraud analytics for the insurance industry. There are a number of big data analytics and consumer trends driving change in 2019:
- An influx of device data – existing products, such as fitness trackers, smart phones, and cars, and future connected products will provide an avalanche of new data about people, their activities, and preferences.
- New third-party data – new ecosystems of data, organized by industries and uses, will provide new ways to understand health and risk.
- A shift in consumer preferences – increasingly, consumers are eschewing the traditional model for buying insurance and are “very willing” to buy online.
All of these trends point to increased opportunities for personalized marketing in insurance. Consider the following areas: marketing analytics in insurance, insurance campaign analytics, and fraud analytics for the insurance industry.
Marketing Analytics in Insurance
Insurance companies are at a crossroads in sales and marketing. On the one hand, insurance companies have a huge incentive to drive policyholders online. The trick is in moving online at a rate and in a way that recognizes the need for the traditional agent model.
A recent Accenture study highlights three segments of insurance comsumers: value purchasers, high-quality seekers, and those transitioning to digital models. The first two of these groups prefers human help, at least at times. Marketing analytics for the insurance industry helps insurers understand customer preferences, how they change, and ultimately how to manage the transition to digital at the right pace. Not everyone has the same comfort with digital channels.
Insurance Campaign Analytics
Marketing personalization comes to life daily through insurance campaign analytics. Rather than broadcast offers to a large group of people, campaigns are increasingly delivered online based on a customer’s profile and their current activities, like behavior on the website.
A McKinsey article outlines a realistic scenario: a long-term policyholder of insurance for an older vehicle, had a bad experience with a claim, and has visited the website recently to look at policies. The data suggests the policyholder is going to switch to another insurer.
In this scenario, the data includes, at a minimum: customer data or policy holder information, claims data and any related satisfaction measures and notes, and website behavior. An insurance campaign analytics program needs to be able to assemble this data, analyze it, act on it, measure the results, and improve the campaign in near-real time to meet customer needs.
To meet the challenges of the new data sources, much more data needs to be understood and put to use, which will require ever increasing maturity in using data to make better decisions.
Fraud Analytics for the Insurance Industry
As the understanding of behavior increases with new data, so does the ability to identify fraud. In the past, customer data was collected for transactions, like buying a policy or making a claim. Now much more, finer-grained information is available to understand typical behavior between transactions. With better models of typical behavior, potential fraud stands out.
Identifying potential fraud faster and more accurately has a side benefit: more satisfied customers. “Spotting troublesome claims” is hard to do manually and takes time. Since the vast majority of claims do not raise any suspicion, fraud analytics and automation can fast track claims processing, delivering better service to policyholders.
Syntelli Solutions helps leading insurers deploy winning data strategies in the insurance industry. They’re available to help you as you pursue your new opportunities.