Leveraging proprietary data in insurance
Proprietary data is lauded across industries as the Holy Grail for those seeking a competitive edge, but how can it be applied in insurance?
Perhaps you’ve heard that leveraging proprietary data can be beneficial, but no one has explained exactly what it is or the extent to which it can be used.
This class of data is generated internally by a company — full of secrets no external parties have access to… Unless another company buys its data set, of course.
Proprietary data can prove essential when trying to adapt to dynamic industry landscapes. By allowing you to understand your customers down to a granular level, it removes the need for assumption and gives you clear direction.
Though many think that breadth of data is imperative, quality is most important. In an increasingly digital age, it’s not a question of who has proprietary data but who has the best proprietary data. Data that spans a wide breadth and will give you directional insights is fine, but accurate data is what will get you to hit your mark.
And there’s the issue of time. Depending on the data-driven decisions you’re looking to make, you can choose from historical, real-time data, or both. If you want to go a step further, apply predictive analytics to know the future.
What are some specific applications of proprietary data that are increasing its popularity in the insurance space/?
Let’s explore.
#1. It takes marketing and product development to the next level
While proprietary data may be hard to leverage if you’re a company that’s just starting out — and hasn’t had the opportunity to organically create proprietary data — this elusive product can also be acquired from third parties.
Need insight into how to effectively target millennials for renters insurance? There’s a data set for that. Is your offering targeted toward parents that have just become homeowners? There’s a proprietary data set that will tell you where to reach them and when, how to craft your messaging and more.
Once you’ve had time to generate your own proprietary data, you can leverage this for enhanced targeting. It’s data of your audience, after all. So use this to expand your reach and pinpoint exactly what people like and what they don’t like. Then, optimize your marketing — or even your products.
#2. It influences customer policies and transforms customer care
Proprietary data can be leveraged in a multitude of ways to positively affect customer care and policies. One of these ways is customization, such as using it to inform of revision in policies when it comes time to renew. Another way is using the data to start off a conversation by proposing solutions. It transforms customer service from “How can I help you today/?” to “I noticed you’re having this exact issue, and based on your unique profile and aggregate proprietary data, I can help you in these three exact ways.”
Data collected through sensors is a game-changer in the insurance space. The use of home and auto sensors is being encouraged by insurance companies for the prevention of loss, with many offering their own proprietary sensors. United Healthcare’s Motion program utilizes the Striiv Bio 2h instead of its own proprietary device to monitor how much program members’ walk daily. If goals are met, then program participants earn incentives that are paid into their HRA or HSA accounts.
#3. Customers will pick the companies that maximize the use of proprietary data
In the end, consumers will choose the insurance company that knows how to best meet their needs. The only way to do that is by effectively applying insights none of your competitors have.
Proprietary data can be leveraged in all areas of your business through product development and customer care cycles, and more. In a data-driven world, it’s the only way forward.
Knowledge is power — the knowledge you have that others don’t is a pure competitive advantage.
Do you utilize proprietary data/?
Kumar Patel is the founder & CEO of Omnidya, an InsurTech startup that leverages artificial intelligence to generate bot versions of consumers. He is an experienced business development professional with a Juris Doctor and has an extensive background in business and growth strategy, business analytics, change management, consumer services industry, and more. Opinions expressed here are the author’s own.
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