Is Your Insurance Company Wasting Money on the Wrong Analytics Technologies?

By Michael Schwabrow, EVP of Sales and Marketing, Cloverleaf Analytics

One of the challenges of deriving ROI from insurance data is being able to effectively choose the right analytics technologies that can organize, analyze, and visualize information in meaningful ways. As broad technology innovation accelerates, it can be overwhelming to keep up with these general advancements along with those specifically tailor-built to serve the insurance industry.

Based on our observations at Cloverleaf, insurers typically fall into three categories when selecting analytics technologies:

• Incumbent Technology Adopters: A well-established incumbent technology provider used in other systems separate from analytics within an insurer. This often saves time for carriers and gives them peace of mind that the vendor they trust is now looking after their analytics. This is where you will see loyalty to larger vendors like Microsoft PowerBI, and Salesforce’s Tableau.
• Trend Chasers: An executive and technology team that runs after the shiniest newest object that aligns with technology buzzwords. This is where some insurers have found themselves in the last year with GenAI. However, while some would like to move forward with the shiny new object, they do not even know how to ask the right questions to see how their insurance business could use the technology.
• Comprehensive Evaluators: A company that is committed to doing its due diligence evaluating horizontal and well-established names, hot new technologies, and insurance-centric vendors that were built from the ground up with insurance in mind.

In truth, if the data is clean and unified to start, a deployment leveraging all three types could work well. As we have shared before, if an insurer’s data architecture is not unified and data management processes are disjointed, then insurers will find unforeseen challenges not due to the technology provider but to their internal inefficiencies.

Each insurer has its own flavor, but we have seen from our experience and other insurtechs that insurers find the most success when they couple the generic BI platform and/or core system with an insurance-centric vendor leveraging legacy and emerging technologies. This is what we have done in our Insurance Intelligence platform. The use of emerging tech could be developed in-house or through partnership with a vendor with a unique AI or ML solution that could be applied to insurance.

It is this combination of building the generic BI platform with the insurtech leveraging emerging technologies where I believe insurers can start harnessing meaningful insights to connect with ROI.

The first area where this unified program delivers value is when the data is analyzed with the proper insurance-centric context. This is primarily dependent on the insurtech’s ability to interpret the core system and BI platform data. The insurtech provider should really be the bridge that unifies the generic BI platform and any hot new technology or vendors. Keep in mind there are other technologies outside of analytics that insurance professionals need to leverage as part of their job. Having the insurtech analytics platform serve as the hub can boost employee productivity.

Want an example to illustrate the bigger problem enterprises face when having to toggle between multiple systems? This Harvard Business Review article about the time wasted switching between software applications authored by Socoro, highlighted their study of 20 teams, totaling 137 users, across 3 Fortune 500 companies in 5 weeks. They found workers spent 9% of their time equating to 1,200 times a day toggling between different applications.

Now if you are a smaller insurer perhaps you do not have this as an occurrence, but for larger insurers, these problems surely persist and waste valuable time. The insurance-centric insights integrated through the insurtech analytics hub with the general BI provider and AI start-ups are another measure of value for insurers through time savings.

The next major area of value would be visualizations that help senior leaders make key decisions more accurately and efficiently about rates, pricing, underwriting, and claims. The benefits of these visualizations across these areas could enable insurers to begin comparing against the spend for their analytics technologies. While yes, the generic BI vendors have visualizations, using those architected by insurance industry experts are much more specialized and relevant.

If you missed my recent blog post about the current implementation process of Cloverleaf by the Pennsylvania Compensation Review Bureau (PCRB), you can get a look at how we’re helping transform the Workers Comp industry with the never-seen-before presentation of claims data.

The Bottom Line

It is all about finding the right mix of tech that speaks your language and delivers real value. It is not about having the fanciest tools or the biggest names – it is about having the right tools that can turn your data into actionable insights and, ultimately, cold hard cash.