Big hats, seersucker suits, Hot Brown sandwiches and My Old Kentucky Home. These things are synonymous with the world-famous Kentucky Derby, run each May at Churchill Downs in Louisville, Kentucky. Since 1875, people from around the world have gathered in the stands and in front of their televisions to watch 20 thoroughbred horses run for the roses.
Arguably, one of the reasons the Kentucky Derby has been named “the most exciting two minutes in sports” is because of the opportunity to place a bet on which horse will win. Take your pick among the contenders and, if you choose wisely, within two minutes you could end up in the winner’s circle. Of course, to increase the likelihood of success, we first have to understand the information available to help make a smart choice.
In order to make an educated assessment on which horse might win, a good place to start is with the vast array of statistics available on horses, jockeys, trainers and owners. There are myriad sources available which collect, organize and present the information in a way to help understand history, performance trends and any number of extenuating factors that can all be a predictor of future success. For those so inclined to take advantage of and learn from this information, the art of identifying likely winners becomes less a game of random chance, and more a calculated choice.
Like horse racing, the business of insurance creates massive amounts of raw data across customers, insurers and agents. For independent insurance agencies, there is an emerging opportunity to harness and analyze that information using technology similar to the databases used to house horse racing statistics. With data analytics applications purpose-built for independent insurance agencies, agency leaders can access this information to glean insights into key performance metrics needed to help make better and more informed business decisions. With the rapid pace of change and innovation across the insurance industry, agencies interested in the information edge provided by data analytics should focus on the following areas:
Internal Operations Productivity Optimization
Data can provide insights that enable agencies to focus on improving business production and efficiency.
- Employee Productivity
Understand employees’ renewals and books of business over time, how quickly they are completing tasks and activities, workflow bottlenecks, responsibility overlaps and which employees are hitting sales goals.
- Current Client, Revenue and Policy Data
View client value, size, policy mix, servicing team and various client trends over time – and evaluate how each is impacting your bottom line.
New and Existing Market Growth
Understanding your client data enables your agency to identify upsell and cross-sell opportunities, as well as analyze potential growth and new market opportunities to drive business profitability.
- Customer Geography
Identify locations of current clients and the types of coverage they have. Use these insights to measure the impact of events such as earthquakes or storms, or even marketing initiatives.
- Client Retention
Analyze factors affecting client retention, such as insurer choice and renewal submission status, against various drivers, like policies, revenue or premium.
Strong Insurer Relationships
Insurer performance data allows you to quickly assess which insurers are most responsive, enabling your agency to produce more new business with higher net revenues.
- Submission Rates
Track the performance of submission responses, declines and what policies were written with each of your insurer partners.
- Policy Volume and Revenue
Look at insurer performance in terms of new business and activity across all of your insurers.
Data analysis enables horse racing enthusiasts to better predict who will win the race. Conditions like the performance of the jockeys and thoroughbreds, weather conditions, and other factors provide comparisons and insights into the outcome of the event. Your agency can benefit from the same mentality. Employee productivity, client satisfaction and insurer responsiveness are important factors that can impact the health and growth of your agency. Data analytics can provide you with a deeper understanding of the factors that drive future success. Truly understanding your business uncovers new opportunities to grow and compete more effectively. Agency leaders should not leave growth and the future success of the agency to random chance. Data analytics can help agencies take advantage of the data they already have to monitor business performance, discover new insights and ultimately make smarter decisions to increase the likelihood of ongoing success in the future.