IIG News

Why analytics is crucial to retain insurance customers

Insurance brokers are in an unenviable position. Targeted by disintermediation, they are being squeezed out as insurance underwriters try to access policyholders directly. It’s David vs Goliath in a very competitive and demanding market. Specifically, insurance customers want to be in the centre of the insurance business, which both established underwriters and insurtech startups want to accommodate.


This customer-centric trend has been brewing for some time. Back in 2014, 65% of policyholders told the Accenture Customer Claim Survey they would switch companies based on a bad claims experience. The nature of the industry has also changed – the same survey found that 67% of policyholders would consider buying policies from organisations other than insurance companies. Considering even banks and mobile networks now offer insurance, that prediction held up very well.


Every transition has winners and losers, and smaller brokers are being set up to fail. But this narrative ignores something fundamental, says Riaan Bekker, thryve’s Force Solutions Manager: “More than ever, insurance customers want the personal touch. They want it in at least two ways. How easily can they access their relevant information? And how responsive representatives are to understanding and predicting their demands?”


Large insurers and insurtech startups rely on data analytics to achieve such goals, usually as self-service portals and employing analytics to spot opportunities. But independent brokers can also use these tools, and to even greater effect than the large players. Platform systems have made such technology services more accessible and affordable — considerably more affordable. You don’t need to own any piece of software. Just as you pay for access to Office365, Slack or other modern services, you can tap the power of analytics to satisfy broker customers.


Brokers can develop much deeper views of their clients and predict their future needs through applying current customer data to models in an analytics platform. This dynamic is clear within minutes in a short-term insurance analytics demo. Then the data comes to life.


Why is it important to use broker customer data in new and expanded ways?


“Brokers have an advantage the rest of the insurance market can’t offer,” Bekker explains. “They provide knowledge and expertise at a personal level. They can build direct relationships and add value that policyholders appreciate.”


And they do – according to Santam’s short-term insurance barometer, 71% of customers see that value from brokers, and 60% say brokers understand their needs.


This personal touch is not a challenge if a broker manages one or two smaller clients. But when they juggle the needs of different personal, commercial or corporate customers, it becomes harder to stay effective and responsive. Data analytics is the differentiator. It supports brokers to find answers and connect the dots for customers quickly and intuitively. Though insurance houses can do the same, they aren’t as agile at using that information to build and reinforce customer relationships.


The cost of accessing analytics services used to be a barrier. But with cloud platforms, that is moot. It’s a monthly operational expense, scaled to what the broker needs and budgeted. thryve provides such solutions to small, medium and large insurance operations, partnering with leading customer data and analytics vendors such as Salesforce, Tableau and Microsoft. Leveraging those services, thryve’s experts build business solutions for the financial, risk and insurance markets, using the cloud’s scale and flexibility to keep costs down.


It’s this type of digital agility that opens the doors for brokers to compete in a fast-changing, customer-centric market. Analytics puts brokers back in front of customers, offering what underwriters struggle to provide: the personal touch. It elevates their value to both policyholders and underwriters. And those brokers who don’t use analytics will be the ones left out.