Making Sense

This is the season when many of us pause to reflect on the accomplishments of the past 12 months as we plan for the coming year. We evaluate our health, our finances, our education and our family and make resolutions that aim to create better lives for our loved ones and for ourselves. 

These decisions are often personal, often matters of the heart, but I submit they should also be matters of the head.

Using data, particularly when evaluating our professional roles, helps paint a more accurate picture of what we do—regardless of our specific position in our organization. And while this industry has long been driven by data—without the accurate assessment of risk, after all, the industry would not exist—many insurers have limited ability to organize and analyze their own data.

The insurance market is worth more than $2 trillion, and venture capitalists are working hard to get a piece it. They’ve invested billions in aspirational startups, most of which are leveraging new technologies with data analytics at their core. In order to stay competitive, carriers and agencies of all sizes need to embrace new technologies as well, while still managing financial risk.

 From Data to Insight to Smart Decisions

 At Vertafore, we provide connected technology and information solutions for the insurance industry, and while the majority of our customers value the power of data-driven decision making, they lack the time and resources to gain insights from data in its raw form. To help our customers thrive in an era of disruption, we believe it is critical to provide carriers, agencies and brokers with analytics to help generate risk scores, build customer profiles and identify growth opportunities.

We’re working to take raw data from across the distribution channel to help our customers identify opportunities, grow their client bases, mitigate risks and optimize business operations. Less than one year ago, we announced a strategic partnership with Cloud BI provider Birst. In just a few months, we’ve released an analytics solution that analyzes large and unique data sets, including the integration of more than 120 million transactions. This new capability is making it possible for customers to visually explore the data, gain insights and take action.

To create an embedded analytics solution tailored for the insurance industry, we had to address several challenges:

• Bridge the gap in market knowledge. Insurers hold invaluable domain knowledge, yet to use that expertise to their advantage, they need data insights. While they hold the context and market knowledge to gain insights from the data, they don’t always have the skill set or time to perform analysis. On the other end of the spectrum, data scientists, who are analytically advanced, don’t typically understand the insurance life cycle well enough to glean insights from raw data. With Birst, we could deliver both an easy-to-use front end for customers as well as a robust back end that can ingest and model large volumes of data all in one platform.
• Anticipate changing customer needs. Put simply, the industry is all about managing risk. Carriers collect data from policyholders and analyze their demographics, household information, health statistics, driving records and financial histories. They then combine this with external data (weather, crime rates, etc.) to construct the appropriate financial instruments or policy offer to balance risk with return. Correctly determining a new customer’s risk profile enables the insurer to accept or reject the customer and price appropriately. Understanding an existing customer’s life changes enables the insurer to assemble the optimal offers, discounts and bundles to retain and expand customer loyalty. To handle this challenge, we must continue the move toward predictive analytics that anticipate the changing needs of customers.
• Connect to multiple data sources. Carriers need to use rich data sources to identify patterns and distinguish signal from noise. That means combining company internal data sources and external data sources that take different forms. Vertafore’s data sources include raw insurance data from almost 30,000 agencies, 1,600 carriers and 230 million policies. With better access to third-party data from a variety of sources, insurers can better understand risk. For example, they can effectively pinpoint the probability that a person will be in a car accident or experience flood damage to their home in a given geographic radius. These growing data sources can be transformed for useful analysis at the speed of commercial markets.
• Personalize solutions by role and business. Your role in your organization will determine what you need from data. An office manager needs to see where there might be bottlenecks in transactional processing or how many policies are up for renewal next month through operational reporting. However, an executive needs visual dashboards to see trends and projections. Building solutions based on your role helps you deliver specific insights into your business and allows you to make data-driven decisions.  

Overcoming these challenges by incorporating the right data analytics solution will give carriers the ability to understand the broader market, make sound business decisions, manage risks and increase their standing as a carrier of choice for brokers and agents. Those that break through the status quo and embrace data analytics will deliver the greatest value to customers and help their firms future-proof their technology investments—and, we hope, their New Year’s resolutions.