Operating effectively without all the right information at your fingertips is frustrating, to say the least. Not only that, basing decisions on incomplete information can have significant negative business consequences—financial and otherwise. Yet operating somewhat in the dark at least some of the time seems to be the situation for many insurance carriers.
In a recent study, LexisNexis surveyed key decision makers from the marketing and underwriting/product management functions within the top fifty auto, home and life insurance carriers. A key objective of the study was to gain a better understanding of the relationships and degree of collaboration that exists between these two teams, and how these facets impact business results.
Respondents were asked to rate their ability to take advantage of the highest return opportunities, whether that be specific consumer segments or specific campaigns, enabling prioritization of marketing resources and effort. An overwhelming number of respondents (57%) indicated there was room for improvement when it came to being able to identify and zero-in on these opportunities. In addition, it seems that current data sources may be at fault here – 45% of respondents said that their current data sources were not meeting their acquisition and retention needs in terms of allowing them to identify and target the highest return opportunities.
54% said that understanding the link between campaign activity and customer conversion was an area of improvement.
Fifty-four percent of survey respondents also identified their ability to understand the link between campaign activity and customer conversion as an area of improvement. Yet again, the carriers’ current data providers were found to be lacking. 43% of respondents claimed that the current data sources were not completely meeting their needs in terms of equipping them with the analysis and insight needed to close the loop between campaign activity and business goals.
In an earlier blog post, we shared how respondents agree they have a clear appreciation and understanding of their counterpart’s roles and responsibilities. Yet while cross-functional teams overwhelmingly endorse the concept of working more collaboratively, only a small proportion actually develop their strategies together. In fact, there is an overarching theme within the study of the need for stronger collaboration and information sharing between the two groups.
The results around data sources indicate that some carriers may not only be seeking improved internal collaboration, but are also in dire need of advanced external data sources and solutions that could equip them with crucial insight to improve their acquisition and retention strategy. Through collaboration, carriers are more able to acquire policyholders with retention in mind. Acquiring longer-term policyholders delivers the promise of greater opportunity for profitable growth for carriers.
Clearly, cross-functional collaboration is rapidly becoming a strategic imperative within the insurance industry. The good news is that teams are willing and eager to embrace it. It is also clear that these teams need robust data sources and advanced analytics capabilities that can help them identify the high-return opportunities and achieve the greatest value from that collaboration.
For more information, please refer to the white paper Collaborate Across Functions to Acquire With Retention in Mind.