Data is the new oil may sound trite at this point, but the fact that it has been repeated far too many times does not take away from the value the technology continues to offer to the world. In the insurance industry, data analytics has virtually ushered in a new-era of successful operations, helping companies to identify new opportunities, cut down the risks, better help their clients, achieve improved sales, and so much more. Now, to help you better understand the value data analytics contributes to the insurance sector, we have listed its key benefits below.
1. Accelerate claims processing process: Given the variety of factors involved in processing insurance claims, it is understandable that it takes a considerable amount of time to deal with them. Unfortunately, that may not be ideal, especially when dealing with, say, medical claims. Data analytics, thankfully, is able to help in this regard, thanks to its rock solid processing and analysis capabilities, which enable insurance agents to arrive at decisions much more quickly.
2. Fraud detection and prevention: The insurance sector is inherently prone to risk with an unfortunately sizeable number of claims being fraudulent in nature. This, in turn, amounts to massive losses for any insurance company. In this regard, data analytics enables insurance companies to closely analyse factors such as the client’s behaviour history, their credit score, and how many times they have filed claims among other things. This helps companies evaluate the veracity of the claims or request additional information before the claim is processed.
3. Improved assessment of risk: Risk assessment is a fundamental element of running an insurance business. Now, its ability to succeed is reliant on how good a job they do when it comes to assessing risks. Data analytics seeks to fortify this aspect of the insurance business by helping companies understand the extent of risk posed by every applicant. Data analytics tools can help companies pull in and analyse information from an abundance of sources, including their prior insurance history, medical history, etc. in order to make informed decisions.
4. Tailor policies for customers: Much like in every other sector, customers in the insurance industry too have come to expect high levels of personalised services and products from the company they give their business too. Normally, this could prove to be a massive challenge; however, with data analytics by your side, providing highly tailored services and products to your customers is not a problem at all. It helps insurance companies gain a 360-degree view of their customers, allowing them to understand their history, preferences, requirements, etc. so the strategies and policies can be adapted to deliver better results and business.
It is no secret that data analytics clearly has a vital role to play in the world in general. However, speaking specifically in the context of the insurance sector, the above discussion makes it amply clear that data analytics in insurance industry brings forth much value. In addition to the aforementioned benefits, insurance companies are able to automate the underwriting process and further optimise other insurance-related processes and tasks across the organization. Furthermore, studies have shown that insurance companies that integrate data analytics in their strategies are six times more likely to retain customers. So, what are you waiting for?