According to Forrester, “Data-driven companies are 58% more likely to beat revenue goals than those who are not focused on data.” One would assume insurance companies would fit naturally into this data-driven category due to the troves of customer data and information made accessible to them over the years. But herein lies the rub – many are still unsure of which data is most relevant and how best to leverage it.
If insurance organizations did take advantage of decades of customer data, it could equip the entire insurance marketing life cycle with insightful management routes, connecting customer acquisition costs to expected yield from the same customer. The solution, therefore, lies in finding out how to best store, share and use that data throughout the organization.
The Source of Silos
The confusion surrounding data is born out of and reinforced by the fact that insurance organizations were not originally structured with data-sharing in mind. In fact, departments typically compartmentalize their datasets to measure their own success; e.g., marketing and claims departments use different sets of key performance indicators (KPIs). Indeed, 40% of all executives cite the lack of alignment within their organizations as a barrier to using big data – and insurance is no exception.
Because organizations lack efficient and centralized data management, it’s often unclear where data gets stored and what unique insight it holds. Even if separate departments are using the same data, they may be contextualizing it differently, yielding differing analyses of the same data points.
Let My Information Flow
Many companies need to understand that data is not flowing through their organization in an efficient manner.
The goal should be creating a collective awareness of the discrepancies that exist within communication channels so all departments can integrate their future-facing data strategies.
That said, having one unified measure for an entire organization also requires standardizing the data in question – meaning all departments must have a similar context for the data they generate. For instance, if the product team and the marketing team each receive the same KPI, but only the product team views it as a positive indicator while the marketing team sees it negatively, there is a wider organizational issue of how data points are perceived and defined.
By applying standardized datasets and KPIs across departments, insurers can have their cake and eat it, too, as they can more accurately measure performance and avoid any inconsistencies, while significantly growing the data pool from which the organization can fish valuable insights into customer behavior and preferences and much, much more.
See also: Data-Driven Transformation
Data-Based Decision Making
Previously departments may have been working in different directions, but, by removing data silos and creating a unified, contextual understanding of insurance data, each will gain a more complete picture of how best to improve their overall performance while achieving compatible goals.
This fuller picture also means that marketing and claims departments could work together more closely, sharing more customer information to obtain the right customer at the right cost and, of course, ensure profitability. All the first-party data that marketing has been collecting could now inform policy and claims decision-making, increasing product accuracy – in other words, the data sum will be much greater than its parts.
One Clear Direction
We at Kissterra believe that insurers that begin to share data throughout their departments can potentially achieve better economics and higher profitability results even within a year’s time.
It will take a huge cultural shift, not just a technical one, for organizations to improve their data operations. Getting all parties on the same page about which data to use and how to use it will afford insurers the ability to set more aligned goals company-wide, moving the organization in a far clearer direction.