Analytical Transformation in Insurance

Promising Analytical Transformation in Insurance

Authored by Ameex Technologies on 14 Oct 2020

The primary concern of Insurance experts for the past decade was often due to non-scalable data processes, data capture and its flow across various insurance operations. Traditionally, after the mammoth data are collected from customers, they are made to reside in huge siloed databases. This stagnant, siloed data often remain unreachable to underwriters, agents, brokers, or other Insurance staff who are in dire need for them. Instead, a chaotic scenario results, with underwriters being unable to communicate with brokers/agents or agents being unable to share cross-branch data.

The other huge pain about useful data pulled out of applications is that they again don’t reach the brokers, agents and other sales staff. Instead they are again dumped within the same old siloed databases, giving hardly any space for the sales staff to get hold of them and use them to show business outcomes.

The past decade however has displayed remarkable revelations to brokers, agents and other staff pertaining to precise data access and processing. The promising potential of data analytics and digital transformation in the Insurance industry productivity have started providing valuable insights to Managers and decision makers to bring about potential revolutionary business outcomes.

A once digitally stagnated insurance industry is now gradually witnessing groundbreaking digital transformation.

Analytics driven customer-orientation

The first aspect of positive transformation for any business is obviously in augmented customer centricity. Insurance sector too is not leaving any wants behind. Instead of serving as mentors, to whom customers look up to, Insurance firms have started adopting smart insurance operations platforms to cater precise needs of customers. Advanced Analytics platforms provide actionable insights to every intricate customer need. Based on which such analytically churned-out data, innovative, customized service needs are being built by insurance professionals.

Proactively spotting even minutest customer needs through superior analytical dashboards!!!

A typical illustration of such a scenario would be the modern, analytically driven dashboards wielded by Insurance agents. These dashboards display clear-cut customized synopsis of every client’s portfolio. The advantage such analytics dashboards pose, are a galore. Not just with popped up alerts pertaining to any client’s coverage gap, but also with respect to spotting the most intricate need of a customer which they might be missing. Hence, instead of just making cold calls, such alerts enable timely reach-outs of Insurance agents to clients, not only increasing sales, but also adding to the genuine trust factor. Insurance agents are looked at not as generic sales personnel, but genuine business partners.

Analytics platforms provide hardly any room for fraud and misuse. Sadly, Insurance industry across the globe has been one of the favorites for fraudsters who have taken it for granted for being able to easily swindle money.  A few among them unbelievably think that Insurance companies exist to only cheat on them and hence it is morally not wrong to outrun them in cheating “business”. An upsurge of insurance frauds over the past decade has added more convincing beliefs among insurance professionals pertaining to this reality.

Advanced analytics breaks the insurance fraud jinx!!!

With the onset of advanced analytical platform usage, the insurance industry has started heaving a huge sigh if relief, especially with respect to curtailing frauds. Today’s advanced analytical tools can detect any type of fraud relating to insurance transactions far ahead of the time they could possibly occur. Tech-savvy insurance professionals are proactively involved in social media platforms tracking possible fraudulent behaviors of Clients. For instance, if a customer has filed a claim for an accident insurance, but on the contrary posting his/her ‘happy-family-friends’ pictures on social media, this could be a potentially fraudulent claim.

Advanced analytics to perfectly price premiums and policies

In general insurance companies while working out their premium or policy costs, lean on the most popular “The Law of Large Numbers”, based on which they practically predict statistical facts about incidents that would have to be insured to a larger possible extent. The basic flaw that works around this rule is that it is rather difficult for Insurance professionals to predict events pertaining to single individuals or accidents pertaining to individuals, of which they do not show much interest as well. This rule though may enable and is advantageous to insurance agents, to statistically predict how things will shape out, it is not at all useful to the policy holders. Often, this type of pricing techniques force-in the very same premium prices to both Good Risk Customers as well as Bad Risk Customers. They do not consider certain types of behavioral parameters while pricing premiums. This would rather be unfair to the types of good drivers who would be paying the same premium amount as that of bad drivers.

Data analytics dig deeper into behavioral pattern parameters of customers!!!

Over the past decade, radical advancements in data analytics tools have enabled insurance professionals to gather useful actionable intuitions on customers. Decision-makers can go to the extent of peeking into intricate behavioral patterns of customers and accordingly come up with highly customized pricing for their policies.

A typical example here would be using predictive analytical modelling to predict the possibility of an individual customer getting involved in an accident or his/her car getting stolen. Advanced data analytics tools possess the capability to process customer data with intricate algorithms to come up with insights pertaining to their behavior. Data analytics algorithms predict event possibilities using input behavioral data such as driving habits, drink-and-drive behaviors etc., and evaluating them as against that of other customers.  The behavioral patterns of drivers are monitored over a period and assessed through different tools such as installation of small box in the vehicles, installing suitable apps in driver’s smartphone, etc.

Such assessments enable insurance professionals to assess customers as separate individuals. Insurance professionals can now “have the cake and eat it too”;  they can price premiums in a customized manner, based on an individual’s insurance risk assessment, both, being fair to every customer as well as maintaining high productivity. For one, customers of the likes of good drivers are over-joyed by being incentivized with lower premium payments and monitored driving. On the other hand, the Insurance firms are even more benefitted by minimization of adverse insurance risk choice.

Self-Servicing, a delightful digital portal buffet for policyholders

The most recent feather in the cap of digital transformation are the ‘Self-Serve’ concepts. A rather rudimentary definition would be, Self-Servicing portals tools enable all policy-holders to manage their policies all by themselves. There are also Self-Service tools that enable all operational/field staff such as agents to self-fetch the very information they need. The vital aspect to be noted here is, there is often needless fears on the part of many insurance agents that Self-Service portals may make their jobs practically obsolete. However, contrary to their beliefs, these self-service portals enable to policy holders manage their policies online, anytime, anywhere, connected to the Internet. They in fact only reduce the number of strenuous tasks for the operational staff and agents. Agents and insurance firm also can see a lot of happier customers and a lot more of the policy-management off their long task list, reducing their burdens significantly.

Some of such major insurance giants who have taken a positive step towards Self-Service portal provision for policy holders include Allstate, Geico, MassMutual etc.

A few of the crucial advantages of Self-Service portal adoption include:

  • Auto-tracking of policy status of Customers by agents/brokers
  • Clear visibility of Premium amounts collected for Customer’s policy(es)
  • Automated policy recommendation by brokers/agents to customers on their policies, performing smart timely updates to their policies appropriately to their benefit, increasing customer delight
  • Streamlined Underwriting process: Drastic reduction of conventional medical underwriting process using many non-medical data points leveraging Data Analytics and where customers use self-service portals, enabling insurers to issue policies a lot quicker

Robust cloud data analytics for insurance operational efficiency

The modern era data analytics tools are powerful enough to process through huge terabytes of insurance data residing in data bases to ascertain the exact profitability factor of insurance lines. These powerful data analytics tools hosted on cloud have the capability to serve as an agent management platform. These tools collect, analyze and display data to bring out real-time reports for insightful decision making

Such tools are robust enough to:

  • Showcase the exact profitability factor of the insurance business
  • Adjust on the transaction systems to augment profitability
  • Increase policy-holder productivity time
  • Promote agent-to-customer coordination
  • Boost insurance business productivity on the whole

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