Insurance is one of the most prominent data-driven technologies globally. The number of players in the insurance industry has grown so much that they have their data mine. However, the players who can convert these data into actionable insights are the ones who are leading the industry today.
As per a survey by Willis Towers Watson, more than 60% of insurance companies believe that data and predictive analytics have helped them to improve their sales while reducing time to market.
In today’s world, any business must have a robust data analytics platform to develop a strategy that can cater to their customers and results in better sales.
Challenges and Data Analytics Solutions for Insurance Industry
Challenge 1: Appropriate Pricing and Managing the Risk
The insurance industry is full of incidents where frauds have given a significant blow to the company. There have been scenarios where unmonitored risks have resulted in a considerable loss to the business.
Data analytics allows businesses to understand the customer’s behavioral pattern and provides detailed insights about the customers, and determines whether it’s a risk worth taking or not. Moreover, the technology also helps the insurance companies develop a custom policy plan for specific customers to improve their sales.
For instance, according to IBM’s survey, 49% of insurance companies rely on data analytics for customer-centric outcomes, 18% use the technology for operation optimization, 27% of companies leverage data analytics for risk and financial management, and 7% of the companies use data analytics for better employee collaboration.,
Challenge 2: Customers at the Risk of Cancellation
Another challenge that is daunting to the insurance industry’s growth is the increasing rate of customers canceling business with insurance companies. The cancelation not just impacts the business in terms of sales but also in terms of branding. The higher the rate of customers leaving the company, the lower the brand value in the market.
Advanced data analytics solutions allow insurance companies to understand the reason behind this churn and provide insights that can help identify the customers at risk of cancellation.
Challenge 3: Identify Loyal Customers
Loyalty is something that every insurance company thrives on for a sustainable future. The loyal the customer is better the chances of better profit. However, with growing competition and increasing insurance companies, customers often tend to switch brands. This impacts the business tremendously.
With the help of advanced technologies such as data analytics and predictive analytics, insurance companies can identify the company’s loyal customers and develop sustainable plans and schemes.
These were the challenges that have hampered the insurance industry’s growth and are being addressed by data analytics solutions. Now, let’s look at the benefits that the insurance industry can leverage with the help of this technology.
Client Success Story: How to Manage Large Data Using Business Intelligence Dashboard?
Benefits Leveraged by Insurance Industry by Data Analytics
Better Lead Generation
During challenging competition, data analytics plays a crucial role in the lead generation for insurance companies. The data collected at various peripheral and internal devices provide actionable insights that can better lead companies for better business.
Improved Brand Value
Data analytics solutions help businesses reduce their customer churn and increase customer retention rate, which allows the companies to improve their brand value in the market. Moreover, data analytics companies can target a specific audience with better insights, providing them a unique customer experience. These insights further help the companies to improve the brand value of the companies in the market.
Accurate Risk Prediction for Underwriting
Underwriting is a process of establishing the pricing for a potential risk by the insurance companies. With advanced data analytics solutions, insurance companies can mine the information through sources and develop accurate pricing predictions for the risks involved in the investments.
Enhanced Fraud Detection
To stay ahead of the curve, businesses must be vigilant to identify frauds. Fraud detection saves an ample amount of money and time for the companies. With data analytics solutions, insurance companies can distinguish between a genuine customer and a fraud.
Data analytics solutions powered by business intelligence are designed to cater to businesses to help them understand their customer for better results. The technology allows companies to collect, monitor, and process the data collected from various sources.
The insurance industry relies heavily on data collected from multiple sources. With the help of data analytics solutions, insurance companies can tackle challenges such as frauds, low revenue, and loss of sales while adding values such as reduced customer churn and higher customer retention rates.
Are you looking for robust data analytic solutions to reduce the customer cancellation rate? Let’s connect.