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How to Leverage Data to Help Your Insurance Agency Make the Best Decisions

by  Roi Agababa  |  12 Oct 2017

Data is one of the most overlooked elements in running a successful insurance agency. Sure, brokers give it lip service, but most lack the technology required to really take advantage of data analytics.

They have the data. It’s there. It comes flooding in with every application they take. They just can’t use it, or they don’t know how to use it, to it’s fullest potential.  

If you want to change things in your business, here’s how to leverage data to help your insurance agency make better decisions.

Clearly Define Your Goals

You can’t fully leverage data without understanding what you’re trying to do. One of the reasons many agents are “scared” of data is because they simply don’t know what to do with all those numbers and information.

It’s not enough to say “make more sales.” You have to know, in concrete terms, what that looks like.

  • What are your KPIs?
  • What are the insights you hope to get out of this data?
  • What are the business decisions you need to make where the data will provide the answer?
  • Are you looking for ways to increase profits, or do you want to improve productivity and efficiency, or both?

Data can help you answer these questions, but it doesn’t replace your own thinking brain.

For example, the data you have now might show retention rates of 53%. Is that good? Bad? Do you want to improve those numbers or is it indicative of the need for increased new business?

Once you’ve figured out a baseline for your brokerage (what your normal retention rate is, in this case), you can make a decision as to where to go from where are you currently. So, for example, if your baseline retention is 40%, then 53% is actually an improvement. You could try improving it further, but it might be more cost-effective to increase new business submissions.

If, however, your baseline was 95%, then you have to figure out what went wrong and why.

Take Advantage Of Technology

If your agency still runs on pen and paper, then it’s time to go digital and choose a management platform that’ll make it easier for you to collect data-driven insights. A data-driven platform, like Novidea's, can help you better understand your customers by giving you access to data like:

  • Profitability analysis
  • Pipeline data
  • Closed sales data
  • Policy lifecycle data
  • Monthly commissions/premiums data, etc.

The platform collects valuable tidbits about your customer’s behaviors and habits — obviously very useful. Let’s say your customer just bought a new 5-bedroom home and wants to insure it with you. Do you think a single person buys a 5-bedroom home? Of course not. People with large families do, though.

Through your conversation with this customer, you learn he has 4 children, 2 of whom will be turning 16 within 3 years.

You quietly collect this information and it is stored in a database. You stay in touch with your client and after 3 years, you get a reminder. Oh yeah. His children are now legal driving age. He may need to expand his auto insurance coverage.

Actionable insights and real-time analytics can give you information about the amount of coverage your customer has, the premium she’s paying, and an idea about whether she is underinsured — another sales opportunity. For example, you can automatically create upsell & cross sell opportunities according to customer information, risk exposure and current insurance portfolio. You can also determine which client is profitable and which is not, making informed decisions regarding renewals etc.

Profitability optimization shows you both generally and specifically how profitable each customer is, and how much revenue each agent brings to the brokerage. Once you know this, you can choose to devote more resources to customers who don’t currently bring a lot of revenue in. These kinds of technology advancements were previously very difficult to replicate manually.

Interpret Data Correctly

At best, data is worthless if it’s interpreted incorrectly. At worst, it can actually be harmful to your brokerage and cost you money.

For example, MECLABS’ MarketingExperiments did a study to find out what was happening on one of its landing pages. It saw visitors come on-site and appear to stay for 37 minutes. This is strange, because most people don’t do that.

However, if they took this information at face value, they could have spent a lot of money and resources into driving more traffic to this page (which happened to be their homepage). After digging deep into the data analytics, what it found was one of the links on the site opened a new page in a new tab on the user’s browser. Meanwhile, the homepage stayed open but unseen.

This accounted for the unusually long recorded time on-site.

Can this happen in your insurance agency?

Of course it can. Let’s say you see visitors come to your website and spend a long time on a page about a particular line of insurance you sell. You deduce that visitors are doing quite a lot of reading and researching about this type of insurance, so you dump more resources into training, content creation, and promotion in anticipation of increased sales…sales that never materialize.

Or, you could see data in your system that shows more and more people buying a particular type of insurance — auto insurance. So, you beef up your marketing, hoping to sell more auto insurance only to find out that it was a fluke. What happened?

Digging into the data and understanding the unusual spike in auto policies, you discover a local auto dealer was going out of business and offering vehicles at a steeply discounted price.

What an expensive mistake.

Where To Go From Here

Leveraging your data is the beginning of taking your brokerage to the next level. To be able to guide your business to where it needs to go, you need reliable data that will help you accurately navigate. Stop throwing darts at a wall and seeing what sticks. Start consciously guiding your efforts with the help of data and a cloud-based platform that makes the process of gathering and analyzing that data as seamless as possible.

Contact Novidea to learn how effectively you can start leveraging your data, today.

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