Driving the Analytics Foundation in Insurance
Given the new technologies that have developed in the past years, products are no longer the only differentiation, because they can be replicated very fast. One of the trends I see in the insurance space the value of customer centricity, which is driving analytics. It is no longer about just insuring a life; it is more about how you personalize that experience of financial protection. Many insurers are thinking along the same lines of understanding their customers better and tweaking the product to make it more personalized. Additionally, it is not just about the internal data, but also the external data outside of the organization. For example, you can find data about individuals on social platforms and through other online sources; this can enable insurers to better understand customer personas and aid in providing complementary services and products. The next evolution of this mix of internal and external data will drive the upcoming generation of advanced underwriting.
I have also witnessed another development in the industry: advancements in medicine and genomics, which improve an individual’s longevity. Insurers need to consider how this can be factored into the product design. There are mobile applications, wearables, and the Internet of Things (IoT), all of which allow people the convenience to gain immediate feedback on their health and well-being. These advancements will lead to a situation where consumers will be able to know more about their health than their healthcare providers. Thinking about how this could affect the life insurance industry is an interesting space leaders in the field are thinking about.
The insurance space now understands the value of customer-centricity, which is driving analytics
Examples of How Analytics Helps the Insurance Industry
In the past, we had limited visibility into the time it would take for a policy to “get out of the front door” from a new business perspective. Using data and analytics, we are now able to understand the “end-to-end processing”; this helps in providing a seamless issuance of policies. Additionally, we are able to know from a contract and a licensing perspective, when an advisor needs help. During onboarding of a new advisor, it is very important for us to give them the requisite support and speed to process their applications quickly. When we were working without data, we did not know at what point of the onboarding process an advisor might need assistance. Although they were trying to process business for us, we did not have the opportunity to help them faster. With the ability to better visualize the process inhouse, we are now able to know which agent is at what point during onboarding, allowing us to better assist with contracting/licensing challenges. This will allow them to choose to do business with our company over others, providing a higher level of engagement and sending a message that we value their relationship.
At National Life Group, we started our initiatives four years ago; our initial focus was mainly on the foundation. You cannot do analytics without good data. So at first, we invested in getting the foundation right. What I mean by that is, get the data governance in place, define basic data quality management and at the same time, make data transparent / democratized.
Any analytics or data question boils down to only three things—“Where is my data? How is it related? And how can I access it?” We solve these three problems every day. Today with the governance, quality, and the support from an outstanding culture within the organization, our business teams are able to get to their data faster and connect it faster. Today we are working on using this foundation to jumpstart our next phase into the areas of machine learning, customer analytics and innovation.
Challenges during the Journey
The biggest challenge I see is “ownership of data.” Early on, the perception was, “IT owns the data”; however, many organizations struggle with this all too common misperception. At the end of the day, the business owns the data, and IT is more like the asset manager for the data, responsible for storage, security and model engineering of the data.
As a 169-year-old company, one of the primary challenges we face is multiple legacy systems, which include data all over the map. A traditional solution typically used to solve this challenge was to create one data bucket and throw everything in it in order to report out. This means every time you have a new data asset you create additional buckets. This in turn creates a data velocity; you now have many copies of the same data with different definitions in different departments and it is impossible to understand the source of truth in the context of time.
The solution we put in place did not need copy all the data; we connected to the data and created our own personalized view, without moving the data. This reduces the velocity of data with the visualization tools we use; everyone can drill down at National Life Group and see where this data lives.
Leadership Style and Principles, to Embrace Change
At National Life Group, we have a culture of openness; there is trust and everyone is encouraged to have the courage to point out something that is not right. The advantage we have over other insurers is our culture is different; we truly live by our “do good, be good, make good” philosophy. We are not just an insurance company; we are a relationship company; that is what our executive leadership is all about. We develop relationships, be it with our partners, employees, or peers. It is a culture where we do not call ourselves co-workers, but convey the idea of a family. This helps create an environment of trust and facilitates the courage to do the right thing, every day.
The reason our distribution partners want to work with us is due in large part to the relationship we have with them, which is very personal. The best customer experience can only happen if the organization really knows its “why.” The insurance companies who understand the ‘why,’ will soon become the leaders in innovation.