Enhance Customer Retention and Acquisition Strategies with Insurance Data Analysis
To better attract and retain customers, leading insurance companies must establish strategies that focus on improving their customers’ experience and optimizing their underwriting and pricing practices.
To better attract and retain customers, leading insurance companies must establish strategies that focus on improving their customers’ experience and optimizing their underwriting and pricing practices. This is easier in theory than reality as a recent study from Bain & Company concludes – insurance carriers are usually only good at one strategy, not both. However, I believe that insurance companies can accomplish these two objectives by systematically accessing and analyzing their full universe of data, including free form text and scanned documents, to gain new insights into their customers, business and market environment.
When it comes to retention, the customer experience at the first notice of loss (FNOL) is truly the most critical factor. Every customer touch point and claims activity must go smoothly if their expectations are to be met or exceeded. A recent study from J.D. Power found that only 53% of customers would definitely renew their policy when they receive less than the highest level of claims service – underscoring the critical need for insurers to have transparency to all customer interactions to improve timeliness and quality.
By analyzing free form text data in adjuster notes, insurance companies can not only measure the time it takes to complete these activities but actually evaluate the quality of the interaction representatives have with customers. These are the moments of truth that can make or break the ever delicate relationship an insurer has with its customer. For example, if explaining the claims process is required when making first contact with the customer, the adjuster notes detailing the first contact activity can be analyzed to confirm if this requirement was met.
If there are numerous notes indicating a phone call was attempted and a message was left with no actual contact made, the effort of the adjuster seeking an alternative phone number or form of communication can be questioned. Furthermore, they can find out if adjusters are trying to call at different times of the day to ensure they can reach the customer.
With this information, insurance companies can determine which adjusters are performing well and which are not. In fact, Trillium demonstrated to an insurance company that their underperforming adjusters were taking up to five times longer than high performers to complete certain activities. Training programs and additional mentoring from supervisors can help ensure that underperformers are provided the appropriate support needed to ensure they provide customers with a high level of service.
In order to ensure growth, insurance companies must also develop strategies to attract customers away from other carriers and capture those who are new to the market, such as new drivers and recent transplants to their coverage area. Making this situation more complex is that insurers must try to attract low risk customers who will help them remain profitable. To accomplish this, insurance companies should analyze underwriting data to ensure the proper controls are in place. These controls will help insurers avoid high risk policies and create a pricing strategy balancing premiums that are low enough to bring in new customers, but high enough to be profitable.
This could mean offering multi-policy discounts to customers that currently have only one line of insurance with the company, or proactively reaching out to current customers that have teenage children that are newly licensed but are good risks based on their parent’s claims history. There are multiple areas where claims and underwriting data can be analyzed to identify potential new customers seeking a lower premium or extended coverages that can better protect them.
In order to excel in both customer retention and acquisition, insurance companies must access and analyze their full universe of data. With this information, they can make fact-based decisions that will anticipate market opportunities and uncover potential business threats before they can make a negative impact.
by Michael Chochrek, Insurance Solutions Principal Consultant, Trillium Software
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