Adopting a Culture of Analytics to “Insure” Success
Companies implementing analytics solutions outperform their peers across a range of financial measures – 1.6x revenue growth, 2.0x EBITDA growth, and 2.5x stock price appreciation (State of Smart Report).
For insurers, applying Smarter Analytics to daily decision making offers a huge new opportunity in improving products, services and ultimately a competitive advantage – if they can harness it. Yet performance improvements don’t just happen at the flip of a switch – they require strategic changes in culture as much as people, processes and technology.
IBM’s upcoming webinar (July 25 at 12:00 pm EDT), “Integrated Approach to Smarter Analytics at Westfield Insurance,” addresses the insurance industry, and more specifically, Westfield Insurance, as a prime example of an organization who is succeeding with Smarter Analytics.
Craig Bedell, worldwide insurance industry executive for IBM Business Analytics and Optimization, and one of the presenters for the webinar spoke with me about what we can expect to learn about analytics and the insurance industry.
Based on your customer discussions, what trends are you seeing in the insurance segment?
Three key trends have really emerged for the insurance industry: the need to understand the customer, understand the product, and meet the demands of external pressures. There has been a real lack of understanding from the product profitability standpoint. Companies are dealing with a very fickle audience these days. They are finding that customers are much better informed than they were in the past, and they expect much more from their insurance companies in regards to understanding their needs.
These pressures can be addressed with the right analytics. What we will discuss on July 25, though, is that implementing analytics solutions isn’t just about technology. It’s about developing analytics acumen within an organization, and the degree to which insurance companies can mature their analytics thinking and make fact-based decision making part of day-to-day business practices. This is easier said than done, but it gives insurance companies real competitive advantage as you’ll see with Westfield (see video below), or Infinity Insurance or Santam.
What areas of the business are insurance organizations hoping to improve with analytics?
In the past, companies used analytics primarily for management decisions – simply for reporting and analysis. To get real value, insurance organizations have shifted to operational analytics. This means applying analytics to daily decision making. Once this shift has been made, companies can use analytics to improve areas of the business like customer service, underwriting and pricing, and claims operations.
What are some examples of industry best practices?
Well, Westfield in particular has become a leading example because its senior management recognized the need for a cultural change in order to adopt the right analytics solution. Management has really embraced analytical thinking and that’s what’s important. Westfield’s analytics group leader, Elizabeth Riczko, who is part of the webinar, offers her first-hand knowledge of the cultural changes Westfield has made to successfully implement analytics into their day-to-day operations. In her role as Analytics Leader, Beth reports directly to the president of the company – an indication of the value and emphasis Westfield has placed on analytics.
More than anything, analytics can’t be effective until C-level executives make the decision that it is important. It isn’t a one-time project, but a journey; it’s about a maturity and being able to chart a course.
To register for the webinar, “Competition and Complexity are Transforming Your Business,” featuring Craig Bedell, IBM, and Elizabeth Riczko, Westfield Insurance, click here.