As they race to drive substantive top-line, organic growth, many insurance brokers and agents are making substantial investments in data warehouses, analytics and related technology.
Today, the pressure for making these investments is coming from multiple directions, including:
Clients: Insurance buyers want greater depth of insights from their brokers; it’s become the new normal in the value brokers are expected to deliver.
Insurance companies: Brokers are trying to level the playing field with insurers, which historically have had and leveraged superior loss and exposure data in their dealings with brokers and agents.
Larger competitors: Many global and national brokers have invested millions of dollars to create proprietary data platforms and train front-line producers and account executives to leverage intelligence, analytics and benchmarking tools to better serve clients. Competing in a marketplace where buyers place greater emphasis on insights gleaned from robust analytics puts brokers lacking such capabilities at a disadvantage.
Prolonged soft market conditions: In this environment, it’s imperative for brokers and agents to find new ways to differentiate their service offerings when it’s hard to demonstrate the ability to deliver truly unique value to clients.
Even though brokers and agents recognize their needs and potential opportunities related to technology, when investing in data integration and management, analytics, and related technology applications, many struggle to align these investments to drive top-line organic growth.
On the following pages are 10 tips to help brokers and agents make better decisions and achieve their growth objectives when acquiring and deploying technology-based solutions:
1. Don’t put the cart before the horse
Start with a strategy.
A surprising number of brokers race to consolidate agency management systems, build data warehouses and analytical capabilities without a strategy for leveraging consolidated and enhanced data, analytics, and related capabilities.
Often, the greater focus is on data mining and internal efficiencies, without adequately considering how these investments will be used by the front-line team to drive new and expanded sales and improved retention.
2. Recognize strategy starts at the top
Don’t delegate this to your information technology team.
While the IT team should be involved at all stages, strategy development must be driven by the C-suite with the participation of senior sales, account management leaders and their team members.
All should be engaged in every element of the strategy — from identifying data requirements to structuring the roll-out and sustaining its implementation.
3. Beware of following the leader
For most brokers and agents, it’s a flawed strategy.
Be smart in approaching your technology investments. Start by determining how you plan to use enhanced data visibility and tools across the spectrum of your operations, but with a focus on how technology will help drive sales and retention results — the life-blood of any broker or agency.
4. Recognize that your data has limitations
Regional or local brokers and agencies may be victim of data bias; data they collect are restricted to their own geography/locations, client base, and experience rather than market-wide.
Yet, clients often want broader-based analytics and benchmarking for a robust understanding of how their coverages, program structures and experience compare with peers in their industry, size band and geographic footprint.
5. Clean your data
The adage “garbage in, garbage out” applies especially to information technology.
Today, many brokers and agents build data warehouses and analytics on platforms of bad data.
Many firms have huge problems with the quality of data housed in their agency management systems. And cleaning this data on your own for use by the front-line team can involve exorbitant costs in staff time and expenses, as the process must be maintained continuously as new data are captured.