Charting a course for growth: Building a data-driven road map in insurance

In today’s digital landscape, data has emerged as an invaluable asset, enabling organizations to make informed decisions, streamline operations and retain customers. The insurance industry, in particular, has a wealth of data at its disposal, yet many carriers struggle to harness its full potential.

Insurers who value their data as a key business asset can unlock transformative potential with a robust data road map that aligns their business objectives with real-world use cases.

The significance of data solutions

In an industry where risk assessment and customer satisfaction are paramount, data solutions have become an indispensable ally. By harnessing the power of a data and analytics strategy, insurance companies can gain a competitive edge, enhance operational efficiency and cultivate stronger customer relationships.

Effective data solutions empower insurance carriers to make strategic decisions backed by comprehensive data analysis. By leveraging real-time insights, companies can swiftly adapt to market trends, identify emerging risks and seize new opportunities, fostering agility and informed decision-making processes.

Define your business goals

Embarking on a data-driven transformation journey requires a well-defined road map that aligns with your organization’s strategic objectives and addresses its unique challenges.

Before diving into the intricacies of data solutions, it’s crucial to establish a clear understanding of your organization’s business goals. Whether it’s enhancing customer retention, expanding into new markets or optimizing risk management processes, your data road map should be designed to support and align with these overarching objectives.

In insurance, premium income drives most decisions, so it’s essential to start by understanding where those premiums originate and who’s generating them. When many insurers discuss customers, they’re not necessarily referring to policyholders, but rather the businesses they interact with.

Consider health insurance as an example. The true customers for health insurers are the companies they contract with, not the individual policyholders. Employees of these companies end up holding policies and paying premiums, but the insurers’ primary focus is on recruiting companies to sign up for their insurance plans.

The data management strategy in this case, therefore, needs to transcend tactical customer or policy management systems. These systems handle the nuts and bolts of day-to-day operations, but the real value lies in understanding the broader picture of premium sources and distribution channels.

Your customer funnel

Data in insurance follows a funnel model. It begins with distributors, moves to applications, then quotes, policy signings and finally premium collection. The key is utilizing this data to understand your distribution network and the opportunities they present.

Analyze who’s in your network and what potential they bring. This involves examining your distribution channels, evaluating the quality of applications received and assessing conversion rates from quotes to policies.

By focusing on these data points, you can optimize your processes, from distributor relationships to premium collections. This approach allows for more informed decision-making and strategic planning, ultimately driving growth and profitability.

1. Assess your data landscape

Conduct a thorough assessment of your organization’s current data landscape, including the various data sources, storage systems and analytical tools in use. Identify any gaps, redundancies or inefficiencies that may hinder your ability to leverage data effectively. This assessment will serve as the foundation for streamlining your data infrastructure and implementing robust solutions.

The key transactional systems utilized by most insurance companies include:

• Underwriting
• Policy management
• Premium transaction systems
• Claims processing
• Customer relationship management (CRM)

   

Data fragmentation can be a major challenge in implementing a cohesive road map. With critical information spread across five disparate channels, it can be difficult to answer complex questions and make data-driven decisions efficiently.

Data integration is key here. By connecting these systems and analyzing the resulting data, insurers can gain invaluable insights into their business operations. This holistic view enables more informed decision-making, from improving distributor relationships to refining underwriting processes and enhancing policy management.

Your CRM system holds valuable distributor information. This data connects with your quoting system, tracking potential policies. The next step involves linking these quotes to actual policies in your policy management system. Finally, you can consider the premium income generated monthly from these policies. This process involves integrating data from those five distinct systems to create a clear picture of your business funnel. By analyzing this connected data, you can identify which parts of the funnel are most effective in driving premium income to your company.

Ultimately, this data-driven approach empowers insurers to streamline their operations, boost profitability and provide better service to their clients. It allows you to turn raw data into actionable insights that drive business growth and customer satisfaction.

2. Identify key data initiatives

Based on your business goals and data landscape assessment, identify the critical data initiatives that will drive your organization’s success. In keeping with the imperative to integrate and streamline your data funnel, one major consideration here should include the creation of a structured data platform (e.g., data mart or warehouse).

Building this platform should be a top priority. It’s the foundation that will enable you to leverage data effectively and drive informed decision-making across the organization. The process of creating this platform involves several key steps:

• Ensuring the model aligns with specific business objectives and use cases
• Engaging solution architects to design the data mart model
• Extracting data from various sources and integrating them into the new model
• Applying business logic to maintain data integrity and relevance

Once established, the data platform will serve as a standardized, centralized repository for all your critical information, enabling you to analyze trends more effectively, make more accurate pricing predictions, improve risk assessment and enhance overall operational efficiency.

By integrating data, you’re not just solving a technical challenge — you’re creating a powerful tool that will drive business forward. This data-driven approach allows you to respond more quickly to market changes, better understand customers’ needs and ultimately provide more competitive and tailored insurance solutions.

This centralized data platform should be a single source of truth for all reporting. It eliminates discrepancies between departments, such as conflicting premium income figures. It becomes one authoritative source that everyone agrees upon, ensuring consistency across the organization.

3. Establish a data governance framework

Effective data governance is essential for ensuring data quality, consistency and security. Establish a comprehensive data governance framework that outlines policies, procedures and roles for managing data throughout its life cycle. This framework should address data ownership, access controls, data quality standards and compliance with relevant regulations.

Developing specific terms and definitions for your various touchpoints is essential. Take, for instance, the definition of an “agency. For some within your organization, that may refer to a corporation. For others, a particular person, and for others, it may refer to a building.

You can’t use ambiguous terminology to answer precise questions. Defining your terms and creating a culture around properly addressing issues is critical to success in a data-driven environment.

4. Select the right data solutions

With a clear understanding of your data initiatives and governance requirements, it’s time to evaluate and select the appropriate data solutions. This may involve deploying data visualization tools or leveraging cloud-based platforms for scalability and flexibility. Collaborate with trusted technology partners and leverage their expertise to identify the most suitable solutions for your organization.

A crucial aspect of this solution involves placing analytical dashboards and reports directly in the hands of business users making critical decisions. For instance, when determining premiums for potential new customers, you can leverage comprehensive data to support your pricing teams.

Interactive dashboards and reporting tools provide you with a comprehensive view of your business performance, enabling you to monitor key metrics, identify trends and make data-driven decisions. These solutions offer customizable dashboards that can be tailored to specific roles, departments or business objectives, helping ensure that stakeholders have access to the most relevant and actionable information.

Systems integration, again, is crucial. It allows you to understand the full spectrum of your activities, from customer acquisition to claims settlement. By harnessing data from these diverse sources, you can empower your teams to make more informed decisions, ultimately driving business growth.

5. Building a data-driven culture

Successful data transformation requires more than just technological solutions; it necessitates a cultural shift within your organization. Foster a data-driven mindset by providing training and education programs, encouraging collaboration between teams and promoting data literacy across all levels of the organization.

Inconsistent usage of data is a common pain point experienced by insurance companies. No matter how advanced any digital solution is, if your end users don’t understand how to interact with it, progress stalls. Employee training, therefore, is crucial to success.

Your data governance framework can help here. If all your terms are clearly and universally defined across your organization, then it becomes much easier to keep all your employees on the same page and working toward the same goal.

Delivering data-driven excellence

In the ever-evolving insurance landscape, data solutions have become an indispensable catalyst for driving operational excellence, enhancing customer experiences and fostering innovation. By crafting a comprehensive data road map and leveraging the power of advanced analytics, visualization and cutting-edge technologies, insurers can unlock the transformative potential of their data and gain a competitive edge.

As insurers navigate the complexities of data management, they must remain vigilant and adaptable, continuously refining their data strategies to align with evolving business objectives and regulatory requirements. By embracing a data-driven mindset and fostering a culture of continuous improvement, insurers can harness the full potential of their data assets and pave the way for long-term success in an increasingly digital and customer-centric world.

How Wipfli can help

If your organization is ready to take the digital leap, our dedicated professionals are ready to assist your transformation. We have the industry knowledge and hands-on experience you need to get started with a road map that can take you to the next level and truly harness the value of your insights.

Contact one of our advisors today and see where your data-driven road map can lead.