How agents can leverage big data and artificial intelligence to meet client expectations
Big data and artificial intelligence are creating buzz today, with their promise to help insurers and other sales organizations leverage the numbers to increase market share, customer retention, and profits.
As an independent agent or broker, you’re facing intense competition from some powerful aggregators of big data such as GEICO, Progressive, eSurance, newcomer Lemonade, and other players that are aiming squarely at your personal lines and small commercial clients.
Perhaps you think big data and artificial intelligence are the province of these giants and the carriers you represent, and as an independent agent you can’t access or use these technologies to improve your own bottom line.
Wrong, says Tony Cid, global head of commercial insurance at Intellect SEEC, which develops software solutions for commercial lines underwriting, as well as for distribution, service, and claims handling for life insurance and annuities. (SEEC stands for Software Engineering Enhancement Center.)
Cid has over 30 years’ experience in the insurance business, with an emphasis on underwriting and agent engagement. After working for several major insurers, about three years ago he decided to do something different and joined Intellect SEEC, where he is responsible for Xponent, an artificial intelligence-powered underwriting workstation for commercial lines. He also is involved with Intellect Risk Analyst, a component of Xponent that is data-driven artificial intelligence software for commercial lines risk discovery and assessment.
“Our goal is to reduce the amount of work that both the agent and the company underwriter do to prepare a submission and develop a quote,” Cid explains. “With Xponent, our aim is to have as much information as possible prefilled on the application, with the data being drawn from a variety of sources on the Internet. If a client asks an agent to arrange, say, commercial auto coverage, the agent should be able to input the name of the client’s business and have a good part of the app prefilled. The idea is to make the submission and risk analysis process as easy and painless as possible.”
Traditionally, Cid observes, most of the investment in streamlining processes has been made by insurers, with agents tending to take a more passive role. “I think agents need to play a more active role in managing that end-user experience,” he asserts. “Once development is complete, Xponent will allow them to do that.”
Lessons from Lemonade
Agents and insurers both would do well to take a page from the book of Lemonade, the “new kid on the block” that Cid says is revolutionizing the insurance distribution system. “If you visit their website and go through the application process, you’ll see that it’s seamless, easy, and intuitive,” he comments. “This goes a long way toward minimizing the apprehension and distrust that I think most consumers feel when buying insurance online. Their website has a lot of good content that explains what the consumer is buying.
“What’s more,” he adds, “Lemonade deals with people and information in a very open and transparent way. They say: ‘Of course we want to make money. But when we feel we’ve reached the profit we deserve, we’re going to give money to charities.’ No other insurance company does this. People appreciate the ease of applying for a policy, the open communication and honesty, and the commitment to giving back to the community.”
Big data and artificial intelligence are not the exclusive domain of insurers, Cid emphasizes. Agents also have access to these resources and, in fact, should do a better job of leveraging them to create what he calls “hyper-customized” products.
“Most insurance products today are very regimented,” he observes. “A homeowners policy from Company A is essentially the same as one from Company B, C, or Z. A BOP is a BOP. Agents should take the lead by using big data to better understand their clients and position products in such a way that they’re more encompassing. Say I have auto, homeowners, and life policies. Each product is separate and distinct from the others. The agent can obtain data about me from the Internet, say from my Facebook page and other sources, to create a single product with a single premium that encompasses all three policies. Never before have we had the ability to bring vast amounts of data together to create products based on underwriting the specific client rather than the mass of consumers. It’s all about improving the user experience.
“Insurers are not competing against insurers anymore, and agents are not competing against agents,” Cid continues. “We’re competing against Amazon, Google, and Facebook. Our prospects are accustomed to that kind of interaction with providers. People are being conditioned to expect quick, accurate, pleasant service. They’re not willing to wait two weeks to get a policy.”
How can agents obtain and use big data to put themselves on the same playing field as Amazon and its e-tailer cousins? “Agents are armed with real power,” Cid affirms. “They control the relationship with the buyer. That said, in terms of information, they leave a lot for the carriers to do. As an agent, you have information about your clients’ losses. You also have information about your clients across companies. You use this data to perform an analysis that probably will be better than your individual carriers can do, because they have data only about their own company.”
He adds, “Unstructured big data is definitely available. It’s a matter of how you access it in the most efficient way. For example, if you have 1,500 clients, it’s not efficient for you to do a Google search on every single one of them. There are applications, and ours is one of them, that will obtain information if you upload an Excel spreadsheet with your client data. You can do this relatively inexpensively.
“The next step is to perform an analysis of the data and identify correlations,” Cid says. “That’s where I think agents need to assume more responsibility; to lead the industry, they need to start being more analytical with their client information, as opposed to being reactive.”
Agents who are reluctant to embrace the use of big data and artificial intelligence, Cid suggests, may fear losing the personal touch in their client relationships. “My response to that is that you’ll be able to provide your clients products they may not even know they need, or that they know they need but don’t know they can get,” he explains.
What technologies can agents use to create the hyper-customized products that Cid believes are the wave of the future?
The process starts with obtaining data that agents can incorporate into the design of products that meet the needs of each client. “Products are available that use algorithms and machine learning to search for data on the Internet,” Cid says. “Other products will automate the application process. Technology is now at the point where data can be gathered relatively inexpensively.
“Artificial intelligence and data gathering tools have become more widely available and more affordable,” he notes. “If you Google ‘artificial intelligence’ you’ll get a plethora of listings on AI. Agents need to be proactive in obtaining and using big data, rather than waiting for the carriers to provide it. That will require an investment by agents, and I believe the results will be well worth the money spent.”
Although independent agents clearly face challenges in adopting and applying new technologies, Cid believes they have what it takes to succeed in today’s intensely competitive market. “I’ve been involved with the independent agency system throughout my career, and I think it’s the best model for distributing insurance,” he asserts. “Look out the window and you can see myriad activity taking place, all of which needs to be supported by insurance. Independent agents have a strong advantage, because they’ve already established trust-based relationships with their clients. From this point, it’s a matter of embracing exciting new concepts like big data and artificial intelligence to leverage those relationships, by delivering the kind of experience their clients now expect.”
By Elisabeth Boone, CPCU
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