How big data insights translate to personal connections

At first glance, insurance sales and big data may seem to be at opposite ends of the spectrum. The former is a personal business, built on established trust and mutual understanding. The other, when applied improperly, adds up to nothing more than a bunch of numbers.

Customer Relationship Management activities have grown increasingly sophisticated, but remain focused on the capture and use of internal data, or data that is within a closed sales and service process. When the term “big data” was first introduced to the insurance world, many thought that it had to do with the massive amounts of data housed in legacy insurance applications. To be sure, there was and still is a lot of valuable data in old systems. However, “big data” is an expansive term that relates to all of the data that is created and available external to and outside the firewall of insurance companies. Think of all the financial, legal, and personal information that is “out there” in various systems that is readily available. When viewed in this light, there is a plethora of data and information that the savvy insurance marketer, agent, advisor, broker, or carrier has available to build business. Throw in analytics and it makes the whole topic of big data even more interesting.

An SMA report encourages agents and carriers to apply big data and analytics to three key areas of their business: customer-centric, risk-centric and finance-centric activities. While customer-centric analytics will have the largest impact on the agent, the three categories influence each other. Big data solutions require a certain amount of investment and risk, but shouldn’t be feared. Here’s how advisors will be using big data in the next few years and how carriers can get a head start.

Enter social

Like it or not, consumers are distancing themselves from their hometown agent, not necessarily by choice, but there are generational and demographic factors, as well as ease of doing business factors. Life insurance is a relationship business and advisors that have spent extensive time in building a personal and professional relationship with a client must understand why and how, social media is a friend or foe to the advisor.  Facebook has replaced Main Street as a place to catch up and make business connections. Savvy agents likely have a Facebook page already, but social activities of the future will be dynamic. A recent survey by the Young Agents Association noted that 60% of those agents use social media in their business on a regular basis.

Let’s follow the process as a consumer “likes” an agent’s Facebook page. First, the consumer has to be aware of the agent and his/her presence on Facebook, either through online or offline interaction, a referral from a client or an ad. The agent then has insight into the types of consumers that visit the page, from age range to most common hometown. While the latest incarnation of Facebook is focused on the timeline and life events, agents still do not have insight into who their fans truly are and where they are in life.

While there’s a degree of interaction with any successful Facebook page, most of the information about fans remains a mystery to carriers. Facebook holds the keys, but doesn’t readily share the life event information that life and health advisors thrive on. However, if an agent is a little more proactive, and works to earn a client’s trust to receive “friend status,” then the agent has a direct pipeline into life events that are the backbone of financial services. A client reporting on Facebook on the birth of a new grandchild, or the purchase of a new home, or kids graduating from college has presented the advisor with some excellent information to cement the personal relationship and perhaps sell additional products or services to that client.

Enter big data

Big data is just that, and the burden of pulling and analyzing the vast amount of social information falls to the carriers. At a granular level, social data is about relationship building, but doing so on a large scale requires investment and forethought. The goal is a more targeted approach to sales that will benefit both carrier and agent, as well as the customer. It’s no longer efficient or effective to rely solely on age and basic demographic information to determine what a customer’s needs are. Modern life has too many variables and too many choices for consumers. That choice also includes a choice of insurance agents, and if carriers and advisors aren’t careful and intent on taking advantage of the wealth of social data available to provide better, more targeted communications, consumers will make another life choice in selecting different insurance.

According to a recent Celent report, 80 percent of insurance companies are using social media at a corporate level for branding purposes. Life and health sales have always been a two-pronged effort, building national awareness and local relationships. If carriers are only using social and social insights at the national level, the whole effort seems disingenuous and will be ineffective. Revamp your analytics processes to hear what consumers are telling you – and the world – via social media.

About the Author
John Sarich

John Sarich

John Sarich, vice president of strategy at VUE Software, serves as a senior solutions architect, strategic consultant and business advisor with more than 25 years of insurance industry experience. He uses his extensive knowledge of insurance operations, information technology (IT) systems, sales and marketing to develop and define operational strategies for the company’s sales and marketing initiatives.

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