Our previous blog post in this series looked at the tremendous business benefits insurers can reap from continuous underwriting. To succeed, insurers must be able to process the tremendous amounts of data that are being generated every second and draw actionable insights from them.
Today’s insurers are drowning in data. They are trying to use this data to formulate their companies’ strategies, decide which new propositions to bring to market and obtain crucial business intelligence. Without effective analytics, insurers are reactive and cannot effectively prepare for new trends, including continuous underwriting.
Information constantly flows from diverse sources: the Internet of Things (IoT)/wearables, customer engagement platforms, social media, etc. The challenge is how to incorporate these data streams into data-driven decision processes. This is only possible with a modular, highly innovative business intelligence solution specifically designed for the insurance market. An effective system should empower business users to easily and rapidly draw business conclusions and insights from raw data, via self-service analytics.
Applying advanced analytics to social media, for example, will unlock data streams and significantly change the underwriting process, enabling insurers to potentially approve millions of previously rejected customers.
Strong Policy Administration System and Pre-Integrated Digital Suite
If the business intelligence system discussed above isn’t pre-integrated with a life insurer’s policy administration system and full digital suite, there will likely be trouble ahead. The insurer will have to generate reports with information manually generated and collected from diverse sources. This will be time-consuming, inefficient and often ineffective. Competitors with a fully integrated and functional BI system who aren’t facing these constraints will likely offer a better customer experience and assess risk more accurately.
But effectively pairing an advanced analytics offering with a policy administration system requires intricate knowledge of the source system and the data warehouse models. Because data is granular and spread out, integrating it with business models and aggregating it is a complicated process. It requires an extensive understanding of an insurer’s own systems, plus deep familiarity with each vendor system, and profound business and technical knowledge of the data models and logic.
A strong and integrated core is necessary for life insurers to take the insights they have drawn from the raw data and quickly act on them. Only a modern, innovative policy administration system will enable the quick creation of dynamic insurance products with flexible policy terms based on the continuous analysis of data.
Pre-integration between a vendor’s full digital suite and policy administration system is a major plus. A pre-integrated digital suite – including a robust customer engagement platform, customer and agent portals and a business intelligence solution – will empower insurers to tailor policies to individuals, enabling them to connect and disconnect coverages easily. With agency support built in, insurers can construct marketing and sales campaigns that are flexible, agile and responsive to changing market needs. This is the future of insurance (and all industries). It almost goes without saying that digital, immediate communication will attract the valuable millennial segment.
Although the IoT era is well underway, some insurers are still finding it difficult to adjust, due to their existing platforms. It’s difficult enough to capture and process billions of new data points. Only insurers with a 360-degree view of their customers and complete visibility will be able to reap maximum benefit from the newly gleaned information. Insurers must be able to act on this high level of understanding by releasing new products and offers quickly to market. By sticking to a strategic plan and paying attention to details, insurers can survive and thrive in the fast-paced world of IoT.
Customer engagement platforms that support wearables are a valuable tool. They keep the insured engaged with his/her provider, but the interaction needs to progress beyond that for maximum effectiveness. A pre-integrated digital suite facilitates a closed marketing loop. Insurers start receiving information from wearables, or their customer engagement platform, and then quickly begin inputting that new information into their marketing efforts, so they can adjust strategy based on tangible data and trends. Harvesting actionable information and being able to respond immediately will help insurers become agile and fulfill the market’s changing requirements.
Our new white paper, “Continuous Underwriting is Underutilized in the Life Insurance Industry,” explains the growing phenomenon of continuous underwriting and explains how it can help significantly improve your business.