Five applications of Insurance Analytics

Data is the new oil, said many wise men. And they were right. Data handling, usage, and insights are now the lifeblood for almost all businesses. Insurance is no exception. While data analytics is gaining momentum worldwide, it has spawned a whole new branch of insurance analytics.

Data is the bedrock of insurance. Some would argue that all insurance companies, big or small, have humongous amounts of data. How can a competitive advantage come into play then? Simply put, the answer lies in the conversion of crucial data into insights. This is where insurance analytics has a big role to play.

Here are five applications of insurance analytics that are worth mentioning.

a. Lead Generation – As mentioned, every insurance company has vast amounts of data, but cannot channelize the same for productive purposes. Insurance analytics can help leverage this unstructured goldmine of information, turning it into an invaluable lead generation source. This also brings up fascinating insights into customer patterns, behavioral trends, and up/cross-selling opportunities in the market. Insurance analytics helps in the extraction of vital insights that give companies just the right glimpse into customer journeys and life cycles, right from the search process to the final conversion. Imagine a virtually unlimited source of leads for the marketing department to cash in on. That is what insurance analytics does.

b. Enhanced Customer Experiences – Insurance analytics has a vital role to play in enhancing the customer happiness quotient. This becomes all the more important when it comes to renewing policies; happier customers are more likely to stick with their insurers. Insurance analytics can help companies predict consumer needs through scanning data-based patterns and trends, while offering valuable insights towards boosting customer satisfaction at the same time.

c. Lowering claim-linked frauds – Claim-related fraud is a big hurdle for the insurance industry. Insurance analytics can go a long way towards enabling quicker detection of fraud along with scaling up accuracy levels considerably in this regard. With historical data patterns for fraudulent claims, insurance companies can check for repeat instances, and mitigate fraud more efficiently. Analytics can help with preventing fraud through identifying potentially risky customers or fraud risks. Predictive analytics can identify people who are more likely to submit fraudulent claims.

d. Better underwriting – Underwriting is a complicated affair for most insurance companies. It may be made simpler through analytics. Data trends may forecast higher premiums for customers with higher risk quotients. Hence, insurance analytics improves and simplifies risk scoring for customers individually while helping with accurate premium finalization. Underwriters can focus on subjective aspects more, while the system can take care of various processes at its end.

e. Improved business growth – Insurance analytics can fast-track vital decision-making for companies. Predictive analytics can forecast operational risks and hurdles while plugging revenue leakage and other issues eating into business profitability. At the same time, it also plays a vital role in streamlining product distribution, marketing, and sales functions, enabling the capturing of varied data points of customers, identifying attrition reasons, analyzing effectiveness of marketing campaigns and devising more effective marketing and sales blueprints courtesy of data-based insights.

Insurance analytics will be the next big thing for insurance providers, providing them the right context, procedural support, and solutions for building more customer-focused, agile, and efficient businesses. Analytics is already the buzzword across a host of sectors. It is time for the mainstream insurance sector, including legacy companies, to embrace this change. It will eventually create a win-win scenario for both the customer and the insurance provider. That is the core philosophy that will drive the space forward over the foreseeable future.

Author: Abhishek Rungta, Founder & CEO, INT. (Indus Net Technologies)