Reestablishing the Priority of Customer Satisfaction

In today’s competitive business landscape, customer satisfaction plays a crucial role in defining the success of any company. While implementing innovative strategies can make a firm stand out, ensuring customer satisfaction remains a prerequisite for every industry to thrive.

Walmart’s CEO, Doug McMillon, emphasizes the importance of leveraging technology, data, and information to serve customers better and stay ahead of the competition. Failing to seize this opportunity can impede your success, allowing competitors to attract more customers and generate higher revenues at your industry’s expense.

Utilizing Data to Enhance the Insurance Industry

Insurance companies adopt a creative approach by harnessing the power of the latest technologies to curate and leverage data effectively. By strategically utilizing data, these companies can upgrade their services and provide better customer risk assurance.

Addressing the Global Protection Gap

The global protection gap is the biggest threat to the relationship between customers, businesses, and insurance industries. The protection gap refers to the disparity between the value of the insured and actual losses. The insured losses should adequately cover the actual losses to make insurance truly beneficial, especially in the case of improbable and catastrophic events that significantly impact people over widespread areas.

Developing nations face a more significant protection gap due to their lower risk resilience and unstable economies. Even in developed countries like the US, where the insurance system is highly organized, risks such as floods and earthquakes are substantially underinsured.

Currently, the global protection gap stands at over $1.8 trillion due to changes in GDP, population growth, and the impact of natural catastrophes, cyberattacks, and pandemics. Closing this protection gap is crucial to enhancing countries’ risk resilience and safeguarding future generations from financial losses.

Implementing Analytics at Scale to Bridge the Protection Gap

One proposed solution to address the protection gap is to implement analytics at scale by leveraging data within the insurance value chain. To understand the role of analytics at scale in minimizing the protection gap, we must first examine the significance of data at each step of the insurance value chain:

1. Product/Service Development: Understanding customers’ needs and expectations is pivotal to developing innovative and customer-centric products and services. Data provides valuable insights into future product requirements, enabling companies to expand in the right direction and achieve higher revenues.
2. Marketing and Distribution: Once a product is ready to hit the market, companies can utilize data to provide personalized services to customers, which, in turn, increases sales and customer engagement.
3. Pricing and Underwriting: Accurately evaluating risks and pricing products and services can be achieved by leveraging data. That allows insurance companies to fix premiums more granularly, ensuring adequate coverage while covering the costs of brokers and underwriting.
4. Claims: Effective data utilization in the claims process can help intelligently review and reduce claim severity and frequency. That not only benefits the industry but also minimizes fraud and prevents losses.
5. Operations: Data is crucial in identifying potential customer churn and areas where companies can improve services. Utilizing this data allows insurance companies to effectively enhance their services and address customer dissatisfaction.

Managing Big Data with Analytics at Scale

Given the vast amount of data insurance companies handle, traditional software tools cannot process and analyze it effectively. Insurance companies must recognize the importance of data and offer more reliable solutions, as unprocessed data may lead to inaccurate results.

To address this challenge, experts in high-tech fields are implementing analytics at scale, which involves leveraging cloud and exascale platforms to transform and process data comprehensively. By adopting analytics at scale, insurance companies can address the 70% loss and 30% underwriting expenses that many of them face.

The Benefits of Analytics at Scale

Analytics at scale enables insurance companies to handle data more effectively, bridging the protection gap and enhancing customer centricity. Its implementation improves customer acquisition, retention, risk assessment, fraud prevention and detection, and cost reduction. By revolutionizing every process in the insurance value chain, implementing analytics at scale can potentially transform the industry.

Beyond Descriptive Analytics: The Power of Predictive and Prescriptive Analytics

Insurance companies have traditionally relied on descriptive analytics, which focuses on analyzing past service outcomes to understand customer behavior. However, as the competition intensifies, companies now recognize the value of predictive analytics. Predictive analytics involves assessing the impact of various developments and changes on the industry’s future, enabling companies to stay ahead.

Similarly, prescriptive analytics, which focuses on determining the outcome of future steps, plays a vital role in reshaping the insurance industry. By leveraging prescriptive analytics, insurance companies can proactively mitigate risks, provide advisory insights, and make informed decisions, ensuring their continued success in an evolving market.

Conclusion

In the insurance industry, implementing analytics at scale is the key to closing the global protection gap and providing enhanced customer experiences. Leveraging data effectively across the insurance value chain enables companies to develop innovative products, personalize services, evaluate risks accurately, improve claims management, and optimize operations. By embracing analytics at scale, insurance companies can revolutionize the industry, mitigate risks, and ensure long-term success in an increasingly technology-driven world.

Dr. Henna Karna is a globally recognized tech entrepreneur with a proven expertise in patented product design, development, and launch with profitable gains. Dr. Karna brings more than 25 years of experience leading innovation leveraging digital/data/analytics in High-Tech, CPG, Risk Management, and Regulated Industries, including Capital Markets, Payments, and Insurance. She has led businesses and advised Fortune 50 companies on digital innovation and disruption and has designed and developed patent-pending technology and applications in the field of genetic algorithms, behavioral analytics, deep neural nets, & digital-data technologies. Most recently, she led GOOGLE’s Global Industry Solutions for Insurance & RIsk and collaborated with over 600 companies worldwide. Dr. Karna is an MIT graduate and currently working on her Harvard Fellowship on AI & People impact on society and corporations.