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September 16, 2022

How Insurance Companies Are Using Data Collection Tools to Gain a Competitive Edge


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Consumer, customer, and market data are critical for providing individuals and businesses with the insurance policies they need to protect against potential risks. 

However, even with the ability to collect various types of data, insurance agents may struggle to leverage such data to increase profits and improve customer service. New insurance technology (InsurTech) tools allow agents to collect and analyze data in ways that provide customers with a seamless omnichannel experience and present agencies with opportunities for greater cost efficiencies, a streamlined claims process, and risk and fraud prevention.

Here’s everything you should know about insurance data collection.

What Is Insurance Data Collection?

Agencies collect insurance data to assess and prevent risk, target ideal customers, accurately price policies, provide quotes, conduct investigations, follow trends, and create new products. Insurance data collection can be accomplished through surveys, customer interactions, manual data entry, and direct communications. 

In the past, all data collection was manual and consumed a significant amount of an agent's time. With targeted InsurTech tools, agencies can collect data more efficiently. As technology allows data to be created and updated in real-time, insurance agents can collect data from mobile applications and other online sources automatically, saving both time and money.

What Is Insurance Data Analysis?

Data analysis means analyzing and processing insurance-related data to extract valuable insights that can help manage risks and calculate optimal insurance contracts. For effective data analysis, data must be categorized and examined for important insights. 

In the past, insurance agencies depended on historical information and mathematical models to forecast risk. Today, real-time data can be analyzed through cloud-based systems for improved customer risk management and compliance and increased client retention for agents.

How Do Insurance Companies Collect Data?

Traditional insurance practices for collecting data were cumbersome procedures requiring a significant amount of time from agents and their clients. Collecting customer information usually required multiple phone calls or in-office meetings. 

Collecting data for risk analysis typically required a complex combination of historical information and market data. Agents directly contacted carriers to provide customers with quotes and manually input data into each company's database.

Today, insurance agency software provides new ways for insurance companies to collect data. To better understand and serve customers, P&C insurance companies can automatically collect data from telematics, agent interactions, customer interactions, smart homes, and social media. Agents can use targeted tools, like InsurGrid, to instantly collect critical insurance data including dec pages from prospective clients required to offer accurate quotes.

Why Is Insurance Data Important?

Agencies have long used insurance data to create models that help assess potential risks to develop relevant policies with accurate prices. Insurance data is also crucial for finding variables used to identify and prevent insurance fraud. Without insurance data, it's impossible for insurance companies to generate new products or adequately meet the changing needs of their customers.

As modern consumers recognize the capabilities of technology, they expect more from insurance companies. Today's insurance customers want a product that helps address compliance, provides risk mitigation, creates accurate quotes, and delivers a convenient customer experience. Insurance software companies help insurance agents meet such needs by developing different types of software for the collection, storage, and usage of data.

How Insurance Companies Are Using Data Collection

The explosive growth of available customer data and streamlined data collection and analysis methods are providing insurance companies with a host of benefits to improve customer service and internal processes. 

Some of the most exciting uses for data collection include the following.

Faster Customer Onboarding for Insurance

The typical insurance customer onboarding process is tedious for agents and customers. A potential customer launches the process by filling out multiple forms to request a quote, then provides additional personal data before manually signing forms and providing paper documents to the company. 

InsurTech allows agents to create a digital onboarding experience that seamlessly connects an agent to consumer data and automates insurance agency workflow procedures for a smooth and speedy process. For example, InsurGrid can allow clients to share insurance policy information including dec pages in seconds so the agent can provide instantaneous quotes and streamlined onboarding.

Ability to Offer Agile Plans

Customer data provides insurance agents with a wealth of information that can be used to create new products and offer more customized plans. There are many ways that insurance agents can help clients reduce risks and, as a result, their insurance premiums. 

However, without significant customer data, insurance agents struggle to define the value of policies to a target customer. With the right data, insurance agents can offer appropriate marketing of custom packages that meet the needs of potential clients.

Identifying Outlier Claims

Occasionally, predictive analysis fails to recognize claims that are likely to become high-cost losses. These outlier claims come at a high cost for insurance agencies. 

With the right methods for collecting and analyzing data, P&C insurers can automatically review previous claims for similarities and send alerts to claims specialists. This advance notice can help agencies cut losses due to outlier claims.


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Identifying Risk of Fraud

The insurance industry is a target for fraud. Without the ability to accurately detect fraudulent claims, insurers can lose billions of dollars annually. Improved data collection and analysis can enhance predictions so carriers and insurance agents can identify and prevent potential fraud or pursue corrective measures after fraud is identified. 

This is often accomplished through large data sets and predictive modeling that can identify mismatches between claims and the actions of third-party providers (like auto repair shops) or online actions of the claimant.

The use of big data in fraud prevention can help lower investigation costs by providing a more complete picture of the client. Automated data collection derived from multiple sources allows agencies to pool data and identify gaps or inconsistencies in data provided by a claimant.

Pricing and Risk Selection

Maintaining accurate prices and related risk evaluations is essential to staying competitive in the insurance industry. The more insurance data prospective clients can share and the more data agents can collect, the smoother the process of finding the best coverage at the cheapest price possible. In the past, historical data and trends were used to perform predictive analysis. As consumers demand increased value for cost and transparency, big data gives insurers the ability to adapt to market demand more quickly with new pricing models and product offerings. 

With InsurTech, agents have access to real-time data that is largely comprised of first-hand information. The use of data collected from IoT devices and interactions with clients improves pricing and risk selection. As a result, insurers can create on-demand policies that generate event-specific or usage-based coverage. 

Triage Claims

Modern consumers expect services to be fast and customized to their needs. In fact, 71% of consumers expect companies to deliver personalized services and interactions. 

High-level data collection can drive predictive analytics that anticipates an insured's needs. These predictions can not only improve customer relations, but they can also help agents prioritize certain claims to save time, money, and resources.

Identifying Customers at Risk of Cancellation

Customer retention is critical in the insurance industry. It costs 7 to 9 times more for an insurance agency to attract a new customer than to retain one. 

Yet, customers are likely to leave insurance agencies without warning if the agency fails to meet their needs. Agents can use digital platforms to interact directly with customers and gather data that indicates their satisfaction levels. 

72% of consumers would share personal data to get cheaper insurance premiums. Agents who use digital platforms and smart devices to collect such information can provide improved services that meet customer demand. By using customer data to determine engagement levels, agents can target customers at risk of cancellation with personalized attention to determine how to improve services and retain the customer.

Ability to Focus on Customer Loyalty

50% of loyal customers have left a company for a competitor who was better able to satisfy their needs, and 90% of customers are likely to make repeat purchases with companies that offer excellent customer service. Unfortunately, it can be difficult to understand if your agency is in the former group or the latter. 

The collection of real-time data from multiple sources provides a wealth of information about customer behavior, preferences, and demands. When the data is analyzed to gain insight into the behaviors of customers most likely to remain loyal or create products that better meet the needs of consumers, long-term customer loyalty can be achieved. 

Identifying New Potential Markets

Insurance agents typically offer multiple types of insurance coverage along with related products that meet the needs of clients. By selling multiple policies to a single customer, agents can increase the customer's lifetime value, improve personalized services, and increase the likelihood of customer retention. 

Data can reveal behavior patterns that indicate new revenue streams most likely to interest current customers. As a result, agencies can improve product offerings and better target marketing efforts to ideal clients.

Data Collection Tools Make it Easy for Agents to Gain a Competitive Edge

Data has always been at the center of high-quality insurance services. However, collecting that data was always a major hurdle and time waster for insurance agents. Modern technology streamlines insurance data collection, allowing agents to collect accurate customer information within seconds instead of days or weeks. 

When it comes to collecting customer information for the quoting and onboarding process, there is no better solution available than InsurGrid. Our all-in-one insurance assistant simplifies quoting by compiling all the information you need upfront with all your clients, saving you time and making it easy for you to win more business. Learn more about how we can help you revolutionize your data collection and analysis efforts to improve your quoting and onboarding efforts.

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