Other parts of this series:
- Leading L&H insurers are already reaping the benefits of big investments in powerful data analytics solutions
- Smart L&H insurers are using data analytics solutions to boost customer service and deliver impressive experiences
- L&H insurers step up digital innovation to ready themselves for huge market transformation
- Big L&H insurers are signing up partners to bolster their digital innovation programs
A willingness to partner with other organizations to improve their data analytics capabilities is a hallmark of high performers.
Innovative life & health (L&H) insurers are turning to data analytics to help them improve the services they provide their customers. Highly personalized products, developed using this technology, will give these carriers a significant competitive advantage.
Our research with the Massachusetts Institute of Technology shows that organizations that were quick to embrace this technology, and have adapted their businesses to harness its potential, are twice as likely to have achieved specific business outcomes when compared with more cautious organizations.
Most of these progressive organizations, which we term “high performers”, employ analytics solutions that combine advanced analytics tools and techniques with multiple data sources. This significantly increases the effectiveness of this technology. Around 59 percent of high performers use seven or more data sources, for example, compared with only 21 percent of the other organizations we surveyed.
The effectiveness of data analytics systems is shown in our Quarterly L&H Digital Innovation Tracker. Lincoln Financial, for example, is using data analytics, together with multiple third-party data sources, to improve significantly its customer verification process. Life insurance applicants are no longer phoned by the company’s administrative staff to check the accuracy of the information they have submitted – a process that can be time-consuming and irritating for customers. Instead, Lincoln Financial’s analytics solution accesses third-party databases to automatically verify customer data. This is much quicker and more accurate than manual checks and it allows the carrier to offer its customers more personalized products and services.
MetLife Asia is also using data analytics to raise its customer service. It is deploying an advanced analytics solution, combined with big data resources, to gain better insight into the customer experience it offers. The insurer uses this information to develop and tailor products and services that are closely aligned to the needs and preferences of its customers. The analytics solution also provides MetLife’s agents with sales leads.
A willingness to partner with other organizations to improve their data analytics capabilities is a further hallmark of high performers. Around 52 percent of high performers are collaborating with academic institutions, compared with only 24 percent of low performers. The AIA group, for example, has teamed up with the Nanyang Technological University to launch an innovation center in Singapore. The Edge Lab will explore ways of using analytics and big data technology to make healthcare insurance more accessible and affordable.
Data analytics technology will become increasingly influential as insurers move more and more of their products and services to digital platforms and distribution channels. L&H insurers that have been quick to recognize the enormous potential of this technology are likely to be more adept than their reticent competitors at providing products and services that meet the rising, and highly changeable, expectations of their customers. This will enable them to increase market share and drive up revenues. Insurers slow to embrace data analytics need to accelerate their deployment of this technology to avoid being left behind.
In my next blog post I’ll discuss another important finding of our Quarterly L&H Digital Innovation Tracker: the rise in innovation. Until then, have a look at this link. It provides some very useful insights.