Breaking the analytics code in insurance

With rapid and revolutionary transformations in business-customer interaction across the globe, private customer data is now considered the insurer’s digital goldmine. Asian insurers, traditional they may be, are finally catching up to the analytics game. Enhanced online customer engagement is slowly eliminating countless piles of feedback forms as businesses make it their primary aim to digitally collect and manage private and precious customer data.

According to Celent, an intuitive customer experience requires understanding what customers want and how they want to receive information. The survey revealed that customers and insurers are mostly on board on what they expect from each other, with customers prioritising the speed to get relevant information and also the intuitiveness of tools and interfaces offered by insurers.

Collecting customer data
Celent defines three approaches in collecting customer data: the manual “just in time” approach, a method that is mostly insurer-led and relies on existing business processes; the consumer-led data harvesting approach, where the insurer banks on the digital footprint of the customer; and the insurer-generated sensing and awareness approach, which relies on data harvesting for the purpose of predictive analytics.

Meanwhile, Ari Chester, principal at McKinsey & Company, refers to the latter approaches as “advanced analytics” or “data science.” For insurers, advanced analytics has resulted in sophisticated fraud identification in various kinds of insurance as well as the use of claims modeling in compensation, among others. According to them, adopting analytics requires passing through four stages: building insights, capturing value, achieving scale, and becoming an analytics-driven organisation.

Furthermore, for analytics to be truly a success, CEOs, together with the rest of the senior leaders, must make it their priority, adds Chester. Not only that, success in analytics takes time and a lot of effort, hence executives must commit whatever the short-term costs.