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Rachel Alt-Simmons, SAS
Rachel Alt-Simmons, SAS
Commentary
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Why Asking "What if?" Can Spur Insurance Sales

Increasingly, insurers are recognizing that they need to serve a gamut of different customers with different preferences. How should they juggle these customer demands?

We know that consumers want things faster and more personalized than ever before, but how are companies responding to that demand? For insurers, there are two camps: those who believe that insurance is a low-touch commodity product, and treat the policyholder accordingly, and those who treat policyholders as customers where profitable relationships are nurtured and grown.

A favorite quote of mine from an insurer is: "Nobody wakes up in the morning and thinks about life [or other] insurance." Well, maybe that's true, but I also don't get out of bed thinking about buying a pair of shoes on Zappos.com, yet in the middle of the day, I find myself browsing for unnecessary footwear.

But that's also an interesting distinction – some people like to try on shoes before they buy them, so they go to a store; others are fine with purchasing online sight unseen. It's the same thing with insurance: Some customers want no-hassle self-service, and others may need a trip to the store for professional advice. In fact, there is a customer life cycle that may start with someone shopping for online insurance, and then moving up into full service as they start a family, buy a house, get a promotion, etc.

[Previously from Alt-Simmons: 5 Organizational Considerations for Insurance Analytics Teams]

The insurer has to figure out how to be everything to everyone: They have to anticipate what the customer's preferred channel will be and provide the right products at the right point in the life cycle (or decide when to cut a customer loose). This is a huge shift from the mentality of maintaining "sleeping-dog" customers in legacy products, or letting policies renew automatically with no customer touchpoint. I am an auto policy customer of a large direct-seller insurer, and I get a cheery note every six months reminding me why they're still the best insurer for me. They even successfully upsold me an umbrella policy. They have a great self-service website, and yet their reps still pick up the phone on the first ring.

Rachel Alt-Simmons
Rachel Alt-Simmons, SAS

Because of heightened expectations that shift and grow rapidly, insurers need to be able to react and respond appropriately. To do that, the organization has to be primed for speed and agility, specifically: the ability to identify new innovation opportunities quickly, responding to those opportunities by defining projects and initiatives, and a creating a strong alliances between the business and IT in order to align people, process and technology solutions. Unfortunately, that can be a pretty big challenge.

On the other end of the spectrum – primarily coming out of the large multiline financial services/insurance companies – companies are completely reorganizing business units, revamping business processes, and streamlining technologies in support of customer-centric innovation and agility.

Since so many of these customer-centric strategies are fueled by analytics, analytic teams are now getting the enterprise-class support and attention that they have so long deserved. Since the analytic team of the past largely managed their own processes, data and technology, it didn't free them up for innovation. Key quantitative resources were bogged down managing inefficient and time-consuming data processes, or even managing secret departmental servers stashed under somebody's desk (or in the supply closet!). They were so tied up in managing the current state that they couldn't even envision what the future could look like.

The reality is that many organizations are somewhere in between these two extremes. There's so much opportunity to imagine "what-ifs" that lead to innovation. But you will never get to the what-ifs unless you streamline your current processes. Here are some questions you can ask to unearth hidden "what-if" time:

  • Step back and document what your analytic team is doing. How much time is spent pulling data? How much time is spent integrating and massaging data versus analyzing it?

  • Identify what the team should be doing. Is it okay for your analytic staff to spend several days a month extracting data, or are there more valuable activities?

  • If they're performing the right activities, are they doing it efficiently? There are tons of opportunities that can be uncovered in a current-state analysis. Some areas of efficiency may be extremely simple – perhaps an employee just needs more training.

  • What other gaps need to be closed? Help the team start visualizing the future and aligning people, process and technology improvements to that vision.

At the end of the day, getting faster in a smarter way is always better. Help your business start asking the "what-if" questions and charting a course toward becoming a more flexible, agile and innovative organization.

About the author: Rachel Alt-Simmons is the Senior Industry Consultant for Insurance at Cary, NC,-based SAS. Simmons has driven business intelligence initiatives at Travelers and Hartford Life and has been Research Director for Life & Annuity at research firm TowerGroup.

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Nathan Golia
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Nathan Golia,
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10/22/2013 | 8:14:42 PM
re: Why Asking "What if?" Can Spur Insurance Sales
I like how this follows from your previous contribution on analytics teams G certainly that team is key in building the infrastructure that can be used to identify these opportunities.
KBurger
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KBurger,
User Rank: Author
10/18/2013 | 3:33:03 PM
re: Why Asking "What if?" Can Spur Insurance Sales
This sounds like a subtle, but potentially effective, change in the approach to cross-selling/up-selling. Like so much else in insurance (and other businesses, for that matter), cross-selling traditionally was around products -- "the policyholder owns X, can we upgrade to Y?" -- and maybe sales goals (which led to compliance/market conduct issues). Any insight-driven sales efforts depended on the agent taking the time to pore through paper-based client info about age, family, etc. Not gonna happen. With today's analytics capabilities -- as well as the incredibly more effective display/communications capabilities of tablet devices -- a "what if" approach really is feasible. The same needs to happen in banking, where I have been hearing about "how do we get to cross-selling in the branches?" for 25 years.
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