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Forecasting the Role of Analytics in the Insurance Industry

By Anurakt Dixit, Chief Data Analytics Officer, National Life Group

Anurakt Dixit, Chief Data Analytics Officer, National Life Group

Given the new technologies that have developed in the past years, products are no more the only differentiation, because they can be replicated very fast. One of the trends I see is that the insurance space is gradually understanding the value of customer centricity, which is actually driving analytics. It’s no more about just insuring a body; it’s more about how you personalize that insurance. Lots of insurers are thinking along the same lines of understanding their customers better and tweaking the product to make it more personalized. Also, it’s not just about the internal data, but also the external data outside of the organization. For example, you can find so much data about people on social media and through other sources online, from where you can actually get to know more about an individual. There is a path to how this information can be used from an underwriting standpoint. The more the data, the better the accuracy.

The other thing I believe is, with advancements in medicine and genomics, it’s improving the longevity of what was previously thought impossible. How this can be factored into the product design is what a lot of insurers are thinking about. There are mobile applications, wearables, and the internet of things (IoT), all of which are allowing people, the convenience to gain immediate feedback on their health and wellbeing. This may lead to a situation where consumers may themselves know more about their health, than their doctors. How this would impact the life insurance industry is an interesting space everybody is thinking about.

Examples of How Analytics Helps the Insurance Industry

In the past, we did not have an end-to-end idea about how much time it would take for a policy to get out of the front door, from a new business standpoint. Using analytics and data science, we are now able to understand the “end-to-end straight-through processing.” With analytics, we are able to know, from a contract and a licensing standpoint, how an advisor needs help. Especially when somebody new comes in, it’s very important for us to give them all the support and speed up the process for them. Earlier, we did not know which agent is stuck at what point. While they were trying to create business for us, we did not have the opportunity, without the data, to help them faster. With the visualization in house, we are now able to know which agent is actually at what point, proactively respond and take data from a contract licensing standpoint. This eventually allows them to associate with us better and think that we are a company who is really interested in the engagement.

"The insurance space is now understanding the value of customer-centricity, which is actually driving analytics"

At National Life Group, when we started all our initiatives four years ago, we focused mainly on the foundation. You can’t do analytics without good data. So at first, we have to get the foundation right. What I mean by that is, get the data governance in place, define some data quality management aspect and at the same time, make data transparent, democratize it.

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. Today with the governance, the quality, and the support from the culture within the organization, our business teams are able to get to their data faster and connect it faster. Now, we are trying to understand how we can use the data analytics foundational platform, to drive these three pillars.

Challenges during the Journey

The biggest challenge I thought was the ownership of data. Earlier, the culture was, “IT owns the data.” Many would agree that the leaders need to focus on how to change that conversation. At the end of the day, the business owns the data, and IT is more like the asset manager for the data.

The second challenge is: let’s say we would get this report and it has 10,000 lines. Sometimes, people would look at these five lines which are the wrong data and they would just discard the entire report. We have put this principle in place where, if it is 80 percent right, it is good enough to move ahead, except for the compliance or finance related data. It is otherwise good enough for us to move forward and we would not stall the conversation.

The other challenge with the organization was that, because we are a 167-year old company, we have so many legacy systems and data all over the place. We needed a technology which would connect these to each other, rather than the typical solution where we create a new data bucket and put all these data there to report out of it. That was the initial solution. In the solution that we put in place later, we did not need to go and copy all the data; we just connect to the data and create our own personalized view, without even moving that data. This reduced the velocity of data, in the organization. As data moves from one department to another, it changes its shape, form, and definition, which creates the confusion. With the visualization tools we put, everyone could actually drill down and see the “why.”

Leadership Style and Principles, to Embrace Change

A culture of openness, where there is an environment that one can trust and can have the courage to point out if something is not right. The advantage we have over other insurers is that our culture is different; we really live by our “do good, be good, and make good” philosophy. We are not just an insurance company; we are a relationship company. That is what our executive management leadership is all about. We try to create relationships, with our partners, employees, and our peers. It is really a culture where we don’t call ourselves co-workers, but convey the idea of living like a family. That helps creating the environment of trust and it actually gives the courage to do the right thing.

The reason our distribution partners wanted to work with us is because of the relationship we have with them, which is very personal. The best customer experience can only happen if the organization really knows the “why.” The insurers who really understand the ‘why,’ will drive innovation.

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