By Wade Bontrager, president and CEO, EagleEyeAnalytics

Imagine being able to take the lead in the battle to retain yourbest customers by predicting the future, and working with yourcarriers to price risks more accurately. For carriers andindependent agents participating in a future-focused relationshipin which they share data and use modern predictive analytics tojointly target and retain business, this ideal can be areality.

Predictive analytics can form the basis for a deeper, moretransparent relationship between agents and carriers as they worktogether to determine which risks to target. Sharedinformation and shared objectives drive a stronger partnership–onethat is more successful long-term.

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These agents and carriers are sharing access to data andpredictive analytics, creating a new level of transparency betweencarrier and agent for:

1. Pricing and underwriting
2. Customer retention strategies
3. Finding good prospects
4. Customer segmentation and
5. Cross-selling among various lines of business.

Shared access of data/analytics

A few years ago, this type of partnership would not have beenpossible. Traditional methods of predictive analytics weretoo expensive and too slow for carriers to take on the challenge ofworking with agents individually to target business. However,modern predictive analytics, based on machine learning technology,raises new opportunities. Carriers can analyze a broad baseof data and get answers more quickly—in some cases within weeks ora few short months. The costs of SaaS-based solutions makesit much more realistic to use predictive analytics more broadly,and share that information with brokers and agents for a moreprofitable, successful partnership.

Leveraging customer information forretention

The competition to attract and retain the best customers isfierce, particularly as customers become more sensitive to priceand less loyal to their insurance companies. Carriers that areusing modern predictive analytics are better able to analyzebroader bases of data, and identifying meaningful patterns. Since carriers have access to data from large customerpopulations, sharing insights based on that analysis with theiragents can help them collectively target the best customers.

Carriers and agents can also expand their base of business withthese customers by improving promotional programs tied to specificgroups of risks. For instance, predictive modeling can helpagents match the best offers for customers at each lifecycle stage,and better predict which product to promote at just the righttime.

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Using predictive analytics, agents and carriers can definebetter ways to target and attract specialized markets, such assmall businesses in a particular niche. Moreover, this datacan lead to a greater return on each customer as well as strongercustomer loyalty.

And for customers at risk of leaving, carriers and agents canwork together to mitigate through special service programs,outbound calling based on identified red flags and other methods. Carriers, working in partnership with agents, can be alert toearly warning signs, are can intervene well before a switch ismade.

Building confidence in the quote

A big part of retaining and attracting the best risks is notjust individualized treatment and cross-selling, but competitivepricing. As the “last mile” to the client, agents needconfidence that the price they are quoting is the best one, matchedclosely to the risk. Pricing based on credit score and othertraditional rating variables alone doesn't always achieve thatobjective. Modern predictive analytics, on the other hand,takes the guesswork out of underwriting. Carriers are able toreview a greater number of variables to determine which policiesare likely to generate losses over time enabling their distributionpartners to sell with confidence knowing the price is matchedcorrectly to the risk.

Transforming the agent-carrier relationship

Using predictive analytics can also help carriers analyze agentattributes to determine how to retain agents, establishingmeaningful rewards for agents that are best-matched to thecarrier's objectives. Predictive analytics can drive a wholenew level of transparency and partnership between agents andcarriers. When agents understand the criteria that definesprofitability for a particular carrier, and the carrier and agentmeet to determine which risks to target, the partnership inherentlygrows stronger, and is likely more successful long-term.

A strong relationship between carriers and their agents isimportant for sustainable growth. Predictive analytics can beleveraged to give agents greater insights into customers, and placethe correct agents in the correct territories. By arming agentswith the best available tools to more easily and accurately buildand grow their businesses, carriers can increase their bottom line,decrease churn rates and reduce risks, even in a soft market.