We have seen an exponential growth in the interest in, and use of, analytics for a variety of insurance applications. There are a number of case studies which show evidence of the efficacy of descriptive and predictive analytics for marketing, underwriting, claims, and strategic management (selecting the ‘Analytics’ category to the right will produce some examples). However, there hasn’t been as much publicity concerning brokers (apart from some exceptions we’ll note in a moment).
We’re planning several sessions at the 2013 Insurance-Canada.ca Technology Conference focusing on analytics for brokers, so we’d like to know from you: What are the broker’s needs for analytics and who should be providing these?
Insurers see some brokers’ needs …
At the 2012 Insurance Brokers Association of Ontario Conference, CanadianUnderwriter.ca reported that Alister Campbell, CEO, The Guarantee Company of North America, advised brokers to learn more about the analytics that carriers are using in order to provide their customers the appropriate choices. “If you force us to use fewer variables, you end up with a narrower ranges of prices,” he said.
Around the same time, Insurance-Canada.ca published notes from an Insurance 2023 Project discussion between two independent distributors – Chris Hill, from Erb & Erb in Kitchener, ON, and Brian Bartosh, from Top O’ Michigan in Alpena, Michigan, USA. There was agreement that independents had to understand the analytics used by the insurers, but also had to become more proficient with data and analytics for their own business.
So what can analytics do for brokers in their own operations?
Bartosh indicated that independents who use data and analytics to analyze customer preferences will be able to take market share by being proactive rather than reactive in marketing and service, e.g., by offering the right product at the right time. He cited credit card companies’ use of data to target marketing initiatives as an example to emulate.
In a recent article, posted on the Agents Council for Technology (a division of the US Independent Insurance Agents and Brokers of America), Chuck Blondino, the Northwest Region Marketing Director for Safeco Insurance, noted that , “While most agencies change little in size of their personal lines books, there are a select few high growth agencies consistently increasing their total personal lines books by 10 to 24%….One thing really was truly unique – these agencies tracked their marketing efforts and knew what was effective and what was not.”
What can brokers do to implement analytics?
Both Bartosh and Hill indicated that their broker systems vendors were providing some tools, but not enough for all of the anlaytics that they need. Bartosh indicated that, in addition to lobbying his vendor to add additional functionality, he has implemented a stand-alone business intelligence solution.
The Insurance-Canada.ca Technology Conference will have several broker focused sessions which will cover analytics . For example, Greg Purdy, Managing Partner at Pathway Partners will present on “Broker Challenge: Where are You on the Analytics Trail?” Also, Daryl Angier Editor of Canadian Insurance Top Broker will lead a discussion “Leading Brokers Look to Tomorrow”. And, Applied Systems’ General Manager for Canada, Jeff Purdy will present “Perspectives on Brokers of Tomorrow”. Last, but not Least, The Guarantee’s Alister Campbell will be the keynote speaker, presenting on Technology and Innovation.
What do you think?
How important are analytics for brokers? What do brokers need to compete using analytics? Leave your thoughts below and make your opinions ‘count’.