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Home Uncategorized

Making Data a Differentiator: Location Intelligence as a Competitive Advantage

by Ryan Schradin
August 10, 2017
in Uncategorized
Reading Time: 3 mins read
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There are only so many different ways insurance companies can differentiate themselves from their competitors.

Do they offer better customer service? Do they have a better reputation for paying claims in a timely fashion? Are they offering as comprehensive of insurance at a more competitive price? These are all questions that potential customers look at when weighing their insurance options.

If an insurance company has the better answers to these customer questions, they’re most likely going to win that business. And better data can make all of the difference when it comes to the answers insurers are giving to their prospects. Let’s take a closer look at how.

Underwriting for real risk
When analyzing and measuring the risk that an insurance company is taking on by underwriting a particular policy, precision is key. If the risk is higher than estimated, either the policy shouldn’t be written, or it should be more expensive. If the risk is lower than estimated, the policy should be less expensive.

If the data that an insurance company is relying on to gauge risk is not up to date or accurate, they’re basically relying on a reasonable guess to determine whether a policy should be underwritten and how it should be priced. But if the organization has fast and easy access to accurate, real time location intelligence and historical data for a region, they’re capable of doing much more than guessing – they’re capable of conducting a data-driven analysis of risk in which they can base their decisions.

With a better, clearer and more accurate picture of risk, companies can now more effectively price their policies. And that can have a huge impact on whether they win business.

The advantage of accurate insights
I previously discussed some of the questions that customers ask, and some of the considerations that they weigh when choosing an insurance provider. One of those considerations was the cost of a policy in contrast to the level and breadth of coverage received. This is where having better, more accurate data, can be a significant differentiator for a company.

The company that has better intelligence can more accurately price their policies. If their data and analysis shows that the risk could – in fact – be lower than a competitor may know or realize, they can more competitively price their policies; undercutting their competition and offering the customer more services and better coverage at a better price.

In those situations – should the company’s reputation, service and history be on par with their competitors – they’re most likely going to win more business.

But what happens if their data reveals that an area is at higher risk of catastrophe or natural disaster than competitors may realize? Well, in that situation, the insurer could decide to either not underwrite a policy, or assign it a higher price point. They may lose the business, but wind up better in the long run for not underpricing a high risk policy.

When it comes to being competitive in the insurance field, guesswork simply won’t do. Data, location intelligence and analyzing information to gather a better, more accurate and actionable picture of risk is essential for companies to price policies effectively. And, should they discover something their competitors don’t know, it could be key to winning business with lower, more competitive policy pricing.

Tags: big datadata analyticsinsuranceinsurance underwritinglocation intelligencerisk

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