Filed Under:Agent Broker, Agency Technology

Your mandate: Embrace, leverage insurance data analytics

Opinion: InsurTech Talk

Today, new technology platforms are providing the analytical tools that agencies, carriers and MGAs need to serve their clients more effectively and grow their business in the most efficient manner. (Photo: iStock)
Today, new technology platforms are providing the analytical tools that agencies, carriers and MGAs need to serve their clients more effectively and grow their business in the most efficient manner. (Photo: iStock)

The continued proliferation of mergers and acquisitions involving insurance agents, carriers and MGAs underscores the fact that leaders in all sectors of the industry are focused on growth. Besides exploring and pursuing M&A transactions, many of these organizations are looking at new ways to drive their organic growth as well. 

As a result, agencies, MGAs and insurance companies are all looking at new ways to leverage big data to identify growth opportunities within their existing books as well as areas to target for expansion.

In fact, the latest emphasis is the next move along a continuum of technology innovation in the insurance sector that now spans nearly four decades. Indeed, the latest generation of insurance technology platforms represents a culmination of the succession of past innovations that have made insurance agencies increasingly more efficient and productive — often to the benefit of their growing and evolving clientele.

Related: Fully leveraging data analytics in insurance

Looking back


For the most part, the relationship between insurance agencies and information technology dates back to the early 1980s. That's when the advent of agency management systems helped usher in automated rating, proprietary interface and t-filing. These systems have evolved over time from a suspense and accounting system to include automated workflows and robust document management.

During the next 20 years, many new technology-related developments were introduced and embraced by insurance agencies, beginning with ACORD download standards, including Policy Download, which automated the population of exposure data in the agency management system as well as many other download capabilities, and Claims Download. The latter was truly a game changer in that it allowed agencies to better support their clients when a claim arose – especially with respect to claims that were direct-reported to insurers, which otherwise would have left the agency uninformed.  

ACORD XML was also developed later in this time period. This provided Real Time capabilities, such as rating and inquiries that continue to grow in usage every day. Both Download and Real Time capabilities and tools helped drive efficiencies and streamline agency operations, including enabling agencies to become paperless and carriers to reduce costs of mailing insurance documents to agencies.

Related: The power of analytics for insurance: You ain't seen nothin' yet

Assessing current breakthroughs


Today, the latest breakthroughs in insurance technology involve the expanded use of data analytics by agencies, MGAs and carriers.

For more than three decades, insurance agencies of all sizes have been inputting or downloading data into agency management systems. Nowadays, they are finally realizing they can leverage much of the data they've been accumulating on a continual basis to grow their business.

For instance, many agency executives want to identify opportunities to increase commission rates and cross-sell their current clients. They want timely insights about which insurance markets have an increased appetite for writing specific lines of business or targeting their growth strategies to individual industry sectors.

They also want to gain intelligence for benchmarking purposes on rates other clients in similar locations or comparable industries are paying, as well as what products and limits are they purchasing. Within their own organizations, agency executives and sales leaders want a better understanding of what drives their revenue growth, as well as what revenue sources are contributing most to the firm’s profitability.

Related: How carriers can leverage the power of big data

Leveraging data to drive performance and growth


Meanwhile, insurance carriers and MGAs want access to agency data so they can grow their business in the most efficient, productive and profitable ways. They now want analytics on what industry sectors are generating the fastest premium growth, what types of insurance products are being purchased, and geographic regions seeing the highest growth rates.

This data, in turn, will enable them to design custom insurance programs or expand their current books of business. In addition, they want the opportunity to connect more effectively with individual agencies that serve the niche businesses and industries they are targeting. 

Today, new technology platforms are providing the analytical tools that agencies, carriers and MGAs need to serve their clients more effectively and grow their business in the most efficient manner.

Indeed, these platforms are delivering answers to critical questions raised by executives at all levels in agencies, insurance companies and MGAs faster and better than ever before. At the same time, they are helping unveil new and exciting opportunities to grow their business, drive operational efficiency and enhance their client service. Without question, the latest technology is the next "big thing" in insurance, and the industry at all levels needs to embrace it and leverage it to enhance everything from their daily workflow to their near-term and long-term strategic objectives.

Donna LaGoy is a client engagement manager of RiskMatch. She can be reached by sending email to dlagoy@vertafore.com. The opinions expressed here are the writer's own.

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