“I can call an agent and tell them
things they might want to know, such as
a spike in quotes,” he says.” Maybe it’s not
occurring within that agency, but within
a 300-mile radius. How can we help
them take advantage of that? We can
mimic what retail is doing to manage its
sales channels. It can make them more
successful and make us more successful.”
Edwards maintains when you look
at other industries, you see technol-
ogy-driven strategies and that is not
always the case for insurers.
“Some banking CEO didn’t just say
we need to invest $10 million in a mobile
app; there was a technologist,” he says.
“In this context—and this is where there
is a big lapse in the insurance space—we
need insurance CIOs to be brought to
the table as business partners. When the
CIO has that opportunity, they are going
to tell the CEO that in order to take this
company to the next level give me X
dollars to build a data science group, let
In insurance, IT departments by
and large are order takers and simply
respond to what the business is asking
for, according to Edwards
“The business is so mired in the day
to day stuff because insurance is such
a process intensive and taxing indus-
try—rate changes and form filings—that
is what CIOs are forced to focus on,” he
says. “If I had my druthers, I would make
every insurance organization take a clos-
er look at their IT groups. It’s not just BI.
We’re sad with our use of mobility and
social media. We are horribly behind in
Edwards believes analytics needs to
be used more in sales—the next logical
sale or product. He cites the book,
Competing on Analytics: The New Science
of Winning, by Thomas H. Davenport
and Jeanne G. Harris, where they discuss
the success of Netflix as the ability to
suggest the next logical movie for a given
customer and keeping that chain going
based off data.
“Why wouldn’t I apply that same log-
ic to the way we market and sell to our
customers?” Edwards asks. “We under-
stand characteristics around their buying
habits. You can buy that data or you may
have that data. We can understand char-
acteristics around their risk profile, so
why wouldn’t I use that information to
determine that this customer was a good
candidate for XYZ insurance product.”
Mid-tier Users
At CEB Tower Group’s insurance
roundtable last fall, Pauli reports that
half the audience were in roles related
to analytics that didn’t exist within their
organization 12 to 18 months ago.
“Everybody is trying to figure out
the best organizational structure and
it is a hard thing to do,” she says. “It
will be evolving for a long time. When
you look at top 10 carriers, having an
enterprise-wide anything is difficult. The
thing I think is neat about the mid-tier
is the technology providers serving the
mid-tier are bringing a common tool
across commercial and personal lines.”
Analytics definitely is moving down
to the mid-tier, agrees Conlon, as they
see the benefits big organizations are
gaining, particularly the direct writers
that are able to score claims.
“The mid-tier is just slightly behind
because they have limited resources,”
she says. “Personnel is part of the issue.
Many mid-sized and smaller companies
we talk with that have invested in analyt-
ics have a gap in skill sets. That’s where
vendors are stepping up to the plate right
now. They are great partners for insurers
as are some regional actuarial firms that
help smaller carriers get there through
CEB TowerGroup surveyed technol-
ogy providers to provide a roadmap of
the functionalities they will be adding
over the next 12 months and all but the
smallest vendors are adding predictive
analytics in either six to 12 months or 12
to 24 month windows.
“Vendors are bringing competency to
the mid-tier folks and that is important,”
says Pauli. “The mid-tier insurers have
a shorter buying cycle. Once they get
[technology] they really get it. You don’t
have the political stuff that comes with
gigantic insurers. Bringing analytics to
them is really wonderful.”
The bigger issue often comes down to
the talent.
“I’m not sure it is necessary to ask
our data those deep questions,” he
says. “We don’t have to out-Progressive
Progressive, we have to out-Progressive
Mutual of Enumclaw.”
Nearly two years ago, Oregon Mu-
tual rolled out a system for its indepen-
dent agents. Specific data was placed on
agents’ iPads so marketing people could
have a meeting with the agents to show
them how things are trending and other
issues.
“That information can show agents
where the carrier can help them,” says
Fowler. “That was a big cultural shift for
our agents. If you are a hunter rather
than a gatherer that kind of information
is invaluable. It is data that is readily
available that we can crunch to make it
relevant for a conversation.”
Edwards thinks there is contention
within carriers with respect to using
resources and many are challenged to
justify spending money on acquiring
and using data.
“The technology vendors serving the
mid-tier are bringing a common tool
across personal and commercial lines.”
Karen Pauli, CEB TowerGroup
