How traditional insurance companies can beat InsurTechs in the race to attract new clients.
raditional insurance companies have been buffeted by choppy waters this past year. More than 1,400 InsurTech startups have roiled the competitive seas with innovative technologies that have captured new digitally-savvy clients. Their boats are fueled by hallmarks of the disruptive era: agility, speed and lower operating costs.
But traditional insurers have the wind at their backs considering what they carry onboard — vast troves of data. The sheer volume offers a strategic advantage for risk analysis in real time, getting to know clients and becoming more responsive to their needs.
Improving data quality and accessibility can lead to a 20-40 percent increase in sales.
The challenge for traditional insurers is to make sense of their precious data trove. By analyzing and leveraging unique, quality data sets, they can increase production penetration across the client database, manage risk and spur new client acquisition. In fact an FTI Consulting survey finds that improving data quality and accessibility can lead to a 20 to 40 percent increase in sales.
Many traditional insurers embarked on this course to compete more aggressively. Here is their six-point plan for navigating:
1. Get Everyone on Board with Enterprise-wide Buy-in
Focusing on data value is a business strategy that must align across your entire enterprise. That includes making sure the organization has a clear and documented statement of actionable business objectives around data management. Coordinating among all stakeholders helps contain costs by eliminating redundancies and optimizing your investment in data.
2. Assess Your Resources to Understand What You Already Have
Conducting an assessment of your existing data and analytics capabilities will enable you to improve data quality and apply the right analytics for gaining insights. Understanding the client, identifying where potential profitability lies as well as where the submerged mines lurk will then allow you to make quality decisions.
3. Chart Your Course and Develop Your Plan
Preparation is the most important step in any voyage. Is your ship in top shape? Does your crew have the experience and expertise for this journey? Should you bring additional technology and another team onboard? Answering these questions and others will enable you to establish how you will achieve a single view of the client; embrace omnichannel client interaction; enhance long-term client value; and improve profitability.
4. Set Sail and Track Your Performance
Agility to make timely corrections is essential to the race. Once underway, you must find and remove any friction points in the value chain that slow progress or that lead to perceived dissatisfaction from your clients.
5. Blow Your Own Horn to Reach Clients Wherever They Are
One feature startups have in common is an omnichannel approach to customer relations. B2C communication is a two-way relationship now, with mobile technology and social channels such as YouTube, Instagram and Facebook, providing the platform and empowering the client. At the same time, these channels provide insights into needs across the entire client lifestyle. The expectation for all clients is that the lights are always on and they will be served whenever and wherever they are.
6. Celebrate Your Journey and Keep Your Eyes on the Horizon
Traditional insurance companies that exploit their data advantage should be able to meet or beat InsurTech startups in the race to attract new clients. Further, you may discover that your team has more in common with these new competitors than you realize. Inside many large organizations, for instance, are employees who embrace the startup mentality — your so-called internal entrepreneurs — who are eager to try new approaches and are motivated to embark on new journeys.
Wendy Shapss is a Senior Managing Director at FTI Consulting and is based in New York. She is Co-leader of the Global Insurance Services practice and helped launch FTI Consulting's “Advanced Analytics Center of Excellence,” which facilitates digital transformation objectives for clients. Ms. Shapss has more than 20 years of experience in accounting, auditing, fraud and financial-based matters and specializes in litigation consulting, forensic accounting, fraud and financial investigations.
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