The insurance industry is chocked full of buzz words. When I first entered the industry, everyone was talking about digital marketing. It was the headline in every industry magazine, the topic at every conference, and there was no shortage of experts ready to help transform your agency through their digital marketing strategies and solutions.
Over the last several years Insurtech has dominated the headlines. The investment in this space is incredible; and has grown from $300M in 2013 to $6.37B in 2019 worldwide. There is no question that insurance technology companies are here to stay, but for most agencies, the sheer volume of these technology solutions have become so are overwhelming and difficult to navigate.
The new buzzword is data. The trouble with buzzwords is if the end user cannot relate to it – it just becomes noise.
You will hear statements like “Agencies of today and the future that want to compete and continue to meet the expectations of their customers must be data-driven.” What does that mean? Let’s break that down.
Forget the buzzwords
All three of these focus areas are important to the success of independent agencies of today and tomorrow. Therefore, moving past the buzzwords to a practical conversation is critically important.
Let’s focus on data. Think of data as the numbers, information and trends that exist inside your agency right now. By their very nature, independent agencies are data rich organizations, but leveraging that data can be very challenging.
Types of information in your agency
There are two types of information in every organization – structured and unstructured.
Structured data is the information that it typically stored as a record. It has a pre-defined model that it is captured in so it can be easily accessed and analyzed. It is the information that you capture in your agency management system that follows a defined structure – things like dates, number of accounts, number of calls or contacts, premium volume amounts, commission rates and amounts, etc. This information can be easily accessed and utilized by a person or computer program to create trends and look for patterns, opportunities, and make predictions.
Unstructured data is the information that is captured and stored in a way that is not structured – things like email, images, presentations, notes. Over 90% of the data that is captured is unstructured. Whether the information is structured or unstructured there are several challenges that all organizations face when they try to leverage their data – or turn the information they have into insights that you can use to make decisions and turn into action.
Challenges with data
Even when there are predefined models for the structured data that is captured in a system, without data policies and procedures in place that outline the guidelines for your organizations business practices that data can become inconsistent – or dirty, making it difficult to report on.
For instance, if you want to know what percentage of your agency’s business is written with a particular carrier, you can report on that as long as the carrier name is consistent on all accounts in your system. If the carrier name is Motorists on some accounts and Encova on others, your report will not be accurate. Same thing applies if you want to know which producer has the generated the most new business at any given time. If the same producer is listed as Tom Smith, T Smith, TSmith on different accounts, your new business report by producer will not be accurate. Same thing will happen if new business is entered incorrectly as existing business.
Here are some easy steps to follow to help you transition your agency into a data-driven organization:
- Define some key questions you want to answer in your agency
Don’t try to measure everything. Establishing a focus will allow you to implement manageable changes that will lead to progress without overwhelming your staff and or becoming discouraged. Progress is much easier to adopt than perfection, and with this approach you will be able to test and learn throughout your transformation. Focus on these types of metrics: retention rate in the book, retention rate with each carrier, new business production in the agency, new business by producer, new business by carrier, new business by line, number of contacts with clients, number of calls.
- Do a data audit – assess the information that you currently capture
Once you define the questions you want to answer, take a look at the information that you are currently capturing in your system that you will need to answer a particular question. Ask yourself these questions:
- Is the information that you capture consistent?
- Does it make sense?
- Does it match the information that is on the carrier reports or other sources that can serve as a validation to your information?
Often times taking a look at the information that you capture will reveal inconsistencies that exist and will help you define areas where you need to establish clear policies and procedures around data entry in your organization.
- Establish clear policies and procedures around data entry
For all information that is captured in your agency set the guidelines for the data entry. Document these procedures and train your staff on the procedures. It is important to demonstrate why the procedures are important. The best way to do that is to show examples of how inconsistencies create inaccurate reports, that can lead to wrong decisions. Provide an example such as – we want to recognize the top producer of new business in each month. We will use the new business report and you can access your report in the system. Show them that the same producer was listed 3 different ways causing their overall total to be understated and inaccurate. This is an easy example but connecting data entry to the outcome helps every person in the organization understand the importance of their role in the process.
- Share the why behind data-driven decisions
Becoming data-driven requires a cultural shift for any organization. That means the decisions that you made based on intuition, experience, and your gut will now transition to being made using the data that you are able to capture and report on. For an agency that wants to answer the question, “where should I focus my resources and efforts to maximize new business efforts?” they will now use data to inform that decision when historically it was based on intuition. They may look at their current book of business to identify opportunities and trends. Based on that information, they can take a much more intentional approach and focus their efforts on cross-selling opportunities that exist or on a niche or areas of expertise that is highly profitable inside the agency.
For example, an agency in northern Ohio may decide they want to target boat dealers because of the location of a Lake, the number of dealers, and their knowledge and passion for boating. Applying data-driven principles to progressing in this niche will help you identify the dealers prospect them in a uniform and consistent way, produce information and materials for them in a consistent manner, communicate in a consistent manner, and you’ll measure your success as you try to build out the niche.
These are examples of what examining your data can result in. Sharing with your entire team the why behind your new business focus will help them understand and also see the connection between data and their role within the agency – further supporting the cultural change you are making.
- Set realistic expectations
Cultural shifts like this take time, patience, communication, and commitment. They simply do not happen overnight, so be sure that you are set realistic expectations and timelines for you and your team to make this kind of transition. Defining and documenting the steps, timeline, and overall expectations will be critical for you to see progress and stay the course. It will also allow you to take the appropriate amount of time to work through the steps.
Data is here to stay, and we firmly believe it will continue to shape every aspect of our lives both personally and professionally. As your association, we have always been and will always be focused on helping independent agents succeed. Our team is ready to help you make the transition into a data-driven agency.
Please reach out to us if you would like more information about the services, products and support we can provide to you as you leverage data inside your agency and become a data-driven agency.