RIDING THE BIG DATA WAVE TO IMPROVE INSURANCE CUSTOMER RETENTION

Big data and analytics are the current change agents in today’s insurance environment that is being impacted by radical shifts in how underwriters assess risk and how consumers buy insurance. Marketing departments of insurers are now catching up to get insights from Big Data to get the target profile of profitable customers. Insurers have realized the potential of “customer experience” as a key differentiator in recent years. Digital media and mobility have largely influenced how customers research, interact during the purchase process and buy policies. The focus needs to shift to gathering information about a customer at every point of contact supported by analytics to offer useful and relevant content. In this context it would be useful to further analyze how Big Data can help improve customer retention.

In a volatile insurance market, the customer has several choices which make it difficult to keep customers loyal to a brand. A new brand which promises better covers, a single bad experience or a change in price can lead to customer attrition. There is an impending need to harness the power of Big Data to access data faster and solve customer retention issues.

Quick Customer Reach

Using predictive analytics techniques on Big Data, an insurer is able to predict which policyholders are currently experiencing issues with their current policies either due to varied reasons like claims service, policy issuance or agent service. This gives the intelligence on the exact issue to the insurance representative even before contacting the aggrieved policyholder and gives a solution faster. While avoiding long queues in a call for resolution, it promotes stickiness with the insurer who has been proactive.

Need Identification of Potential Customers

Big Data provides capability to identify the needs of new customers, so marketing can match new clients’ needs with the best fit insurance product for them.  An insurer could use data from claims details, call center records, Customer Relationship Management (CRM) information on quote history coupled with behavior data to predict the type of insurance covers best fit for a new customer. When the customer is sold the right policy with the right quantum of coverage, there is less likelihood of complaints or churn to get a better match with competitors.

Enhanced Customer Experience using real-time data

Social media has enabled insurers to have a more personal connect with their customers, which depends on customers logging on and interacting through these social media platforms like an insurer’s Facebook page. Big Data gives access to a wider range of real time data on what a customer is tracking, shopping for /buying, discussing about. Using big data and analytics, insurers can have streamlined and continuous conversations with their policyholders through customized landing pages and mobile applications. It further helps to advertise the right product at the right price through these mediums.

Present Customized Offers

Big Data can access information like the location, gender and social data of every insurer and enable marketers to send differentiated offers to each individual based on interests. An insurer could use location based marketing to send an offer for a potential customer on a holiday with an attractive travel insurance offer.

The Big Data funnel with internal data from underwriting, marketing, CRM, policy issuance, claims and billing along with external data from customers shopping, social media and blog activities is only going to get bigger presenting vast opportunities to understand and retain the insurance customers.


Author

Kanya Saraswathy C

Head – Commercial and Reinsurance – Global Insurance Practice, Tata Consultancy Services Ltd.

Published : The Insurance Times, October, 2018