There’s no denying it: We’re experiencing a technological revolution in insurance. With the rise in prominence of AI tools and machine learning, companies in every facet of the industry are pushing productivity and efficiency while becoming ever more accurate.
One of the most important advancements in this new age has been data analytics. Being able to understand market trends better than ever and faster than ever is leading to strategic advantages for carriers, MGAs, and agents alike. For those catching up to speed, there are a few questions to address: How are they capturing this data? What kind of analysis can be performed, and how does that help my business?
In this blog, we’ll look at how Vertafore’s partnership with Mutual Capital Analytics (MCA) enables carriers to turn data into a competitive edge by anticipating rate changes in the market, monitoring market share, and breaking down consumer behavior.
Real-time rate change and pricing analysis
Insurance markets are constantly evolving, and even the smallest changes can have a significant impact on insurance carriers. Extreme weather events, societal changes, and rising loss costs have pressured carriers to make considerable changes to their rates. As a result, predictive models are becoming less predictable, and carriers may be wondering how their competitors are responding. Luckily, advanced data analytics provide insurers with the ability to visualize rate changes in the market as they happen, and in some cases forecast future changes across sectors. Being able to look at how competitors are adjusting their premiums and the driving forces behind those decisions can help carriers make rate changes with more confidence.
With Vertafore business intelligence and MCA data visualization, carriers get access to renewal price insights that go beyond state-mandated filings for personal and commercial lines, providing a more in-depth view of price changes across different lines of business and multiple customer groups, all in real-time. This data can then be analyzed across geographical regions, allowing carriers to identify potential market trends and opportunities ahead of their competition. All in all, with more robust insurance data analysis at their disposal, carriers can maintain a proactive and informed approach to their strategies.
The potential for increased market share
It’s one thing to understand your market share, and another to have actionable insights that allow for targeted outreach and potential growth. For example, a carrier may have strong relationships with a distribution partner but only represent 5% of their overall book. That 5% could be further broken down into specific segments, providing a detailed analysis of market strength and potential. With more insight, carriers could try to grow personal or commercial lines or explore cross-sell opportunities by building on their existing relationship. They’d also be able to see their anonymized competitors’ market share across the same lines of business and market segments. Altogether, carriers can make more informed decisions to promote certain lines of business to industry segments where they have a smaller market share or shift entirely to focus on sectors performing well.
Vertafore and MCA make detailed analysis of your distribution partners possible, as well as surfacing in-depth insights and emerging trends across personal and commercial lines. This allows carriers to better assess risks and identify opportunities to increase profits in new sectors and locations through market composition and appetite indexing—down to the county level. This way, you can identify areas of lower volume that may indicate an untapped market or one with high-risk worth shifting away from in favor of surrounding areas.
A multi-faceted analysis of market potential gives carriers the ability to develop data-directed growth strategies and pinpoint operations to maximize profitability. But markets can’t be assessed simply by their geographical location and sector breakdown; consumer behavior has to be accounted for, and it can be with a similar degree of precision.
A proactive approach to consumer behavior
The key to effectively attracting and retaining consumers is understanding the trends that drive behavior, specifically churn, which in insurance measures the rate at which customers change providers over time. While it’s impossible to predict future behavior with certainty, a detailed evaluation of historic customer attrition can offer carriers a clearer picture of what rate changes a market might allow without turning customers away. It can also indicate what amount of savings might yield a new customer, helping shape business plans across sectors and allowing for proactive positioning ahead of emerging market developments.
With Vertafore and MCA, carriers can look at churn rates over time to better understand how frequently policyholders are changing insurers and the average savings they’re gaining as a result. For a more personalized approach, they can zoom in on specific customer profiles and even model how various saving percentages would turn prospects into clients during different cycles of the P&C market.
Understanding how customers are behaving doesn’t guarantee how they will behave in the future, but it does allow carriers to set more informed benchmarks and drive consistent growth through effective outreach and improved retention.
Make data your competitive edge
Insurance data analysis empowers carriers to better identify and act on emerging market potential, retain existing customers, and build steady growth. With advanced indexing and geographical mapping, it’s possible to review markets in new ways, yielding valuable insights and enabling proactive positioning for maximum profitability. Data analytics is turning insurance into an open-note test; everything you need to succeed is available, you just have to seize the opportunity and apply it.
When it comes to data analytics, the right partners make all the difference. Vertafore and MCA provide carriers with unprecedented access to actionable insights and some of the largest datasets in the industry. Optimize your business performance and make more informed decisions for the future with custom, real-time data analysis.