In today’s personal property/casualty insurance market, agents and brokers face increasing uncertainty. Staying the course is no longer an option to drive profitable growth. You must understand your performance relative to the market, and optimize your business processes throughout the insurance policy lifecycle.
Understand Your Performance
To improve performance, you must know whether you are underperforming or outperforming the market. Agents and brokers who acquire benchmarking data will succeed on multiple fronts. You can:
- Analyze your position against market conditions to improve marketing campaign messaging and target prospective customers more effectively.
- Measure quoting activities relative to the industry to identify segments that are underperforming, and design marketing strategies that will help close the gap.
- Benchmark growth against the industry, rewarding agents who contribute to the success of the organization, rather than those who happen to be at the right place at the right time.
- Avoid overreacting to sudden changes in performance caused by uncontrollable market forces.
- Avoid underreacting to steady but detectable market changes more analytical competitors will profit from.
Benchmarking could be conducted across customer segments or over time. By profiling the prices of quotes across multiple customer segments, agents can identify less competitive segments and recruit underwriters with better prices for these segments. Agents could also contrast the growth trends of its business against those of the industry to identify whether they have captured growth points of the market.
Pioneering agents focus on understanding, influencing and capitalizing on changes. They continually monitor where the industry is going at segment-level and analyze how decisions will affect future trends. The timeliness of data is critical.
Optimize the Insurance Policy Lifecycle
Successful agents will be the ones that adapt the fastest to market changes. Consider:
Persistent data linking. Persistent linking technology can help create complete, in-depth profiles of current consumers from existing policies, subsequent interactions, and third-party data sources. For example, by linking a customer’s quote with a previous policy, you can create a more relevant interaction with the customer by offering a multi-product or “welcome back” discount.
Advanced data analytics. Most advanced analytic techniques are multivariate in nature. Rich insights frequently arise from multi-dimensional interrogation of data. It is important to observe the metric with “all else being equal.” For example, an agent’s low conversion rate might be due to its underwriters’ poor competitive positions.
- A fact-based decision-making process;
- An execution workflow that is efficient and accurate; and
- A monitoring process that continually collects market data and alerts users to potential changes.
Optimization is a continual and iterative process throughout the insurance policy lifecycle. For example, in direct marketing, optimization can help you determine the best time to contact customers, identify prospects that are most likely to convert, and pinpoint customer segments which give the biggest return.
To get started, you need to:
- Assess your business culture and capabilities before optimizing operations. Identify gaps and seek external help where needed.
- Seek out the tools and data that your carrier partners, underwriters and third party vendors offer. Consider what you need and manage the underwriter and vendor relationships accordingly.
- Embed optimization in the daily workflow and include it in annual or semiannual business reviews.