Analytics and the Independent Insurance Agency

I just read a great piece in Forbes magazine about Jim Goodnight, CEO of SAS. SAS is the leader in high-powered analysis software.

SAS helps large to midsized business analyze their data so they can make better decisions. The author asked Jim the following question:

“What do businesses want to analyze today?”

Jim’s response was, “Businesses are looking at customer data to gain insights into cross-selling and up-selling.”

This sounds very familiar. It’s the old adage, “it’s cheaper to KEEP the customer you have than to acquire a new one”. Businesses are starting to realize that they need to objectively understand their customers better. Every customer leaves clues (data), based on their profile and behavior. If you can read these clues, you can tell how likely and when they are are ready to buy.

Start Collecting Data Today

In order to analyze data, you MUST have some way to collect it. For most agencies, that collection process involves their agency management system and their staff. After working with over 500 agencies and their data, I can tell you that most agencies do a poor job of ensuring that they are collecting as much accurate data on their customers as possible. Accurate data is essential to solid data analysis. Having a system to collect your customer’s profile and engagement with your agency is key.

There are several data points you can collect. One such point could be your customer’s policy profile (i.e. an auto policy and a home policy). Combine this with the customer’s online behavior (they visited visited your website and opened an email recently) and you have enough data to begin to predict customer behavior. You can actually develop a digital signature of each client and rank them accordingly. The is very similar to RFM ( recency frequency and monetary value) method of ranking customers.

With increased pressure from direct writers and lead gen companies, independent insurance agencies need to do all they can to KEEP the customers they already have. Being tuned into the profiles and online behavior of your customer base will give you a huge competitive advantage. This concept is not just taking place in the insurance industry, but one that small businesses are starting to leverage in increasing numbers.

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2 Responses to “Analytics and the Independent Insurance Agency”

  1. Kathy Dugan says:

    I’ve always considered keeping the clients I have as important, if not more important, than drawing in new clients whom I have no history with. What would you recommend for an insurance agency that is just starting out with collecting these data? Do you have a specific data collection tool you recommend? Thanks!

    • John Boudreau says:

      Kathy,

      Thanks for your question. First thing I would suggest is making sure you have a mechanism in place to both collect and segment the data. At Astonish, we’ve built our own proprietary lead management tool that allows you to collect and easily segment your data. If you’re using a agency management system only it’s a bit more difficult, but you could export the data from that tool, then segment based on policy type. It’s going to be labor intensive which is why we’ve built an integrated system. Hope that helps!

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