How insurtech data can help carriers grow agency distribution

Putting a puzzle together when you’re missing half the pieces won’t reveal the complete picture. The same can be said for carriers who are only using the data from their own systems to decide what areas of commercial insurance they want to pursue and which agencies they should partner with.

Harnessing the power of data has been a game changer for the insurance industry, enabling insurers to better tailor their products to their customers’ needs as well as analyze potential areas to grow business. But while most companies understand the importance of data, some are focusing solely on the information collected through their websites or from agent portals. By partnering with third-party data sources, such as agency-facing insurtechs, insurers can see the whole picture and broader market.

More information means better business decision making

Consider the implications of relying on just one source of information. A carrier may understand that it won a piece of business, but it doesn’t typically have any understanding about the business it lost. For example, if an agent generates a quote in the portal but the customer doesn’t purchase the policy, the carrier has no additional insight on why it didn’t get the business.

Insurtechs that are focused on agents can not only deliver information on the business the carrier wins, but also the ones that they lost or the opportunities they weren’t even considered for. Because they often partner with a variety of insurance companies, insurtechs can provide a larger view of the market. They can let insurers know how their products and services compare to other carriers in a specific space.

With more information, companies make more informed decisions. Consider an insurer doing a lot of business in fast casual restaurants that wants to expand into other categories of restaurants. By looking at data on restaurants in all categories, including those that serve alcohol, which are higher risk, the company has more information to decide about broadening its business.

Getting on the radar of the right agencies

Data from third parties can enable carriers to target agencies specializing in the businesses they want to target. In commercial insurance, insurers often focus on macro and micro approaches to growing their networks. At the micro-level, insurers build relationships. They may take agency principals to play golf or out to dinner, nurturing connections over time. Relationships are the lifeblood of insurance and establishing these deep foundations leads to positive outcomes over the long term.

But the micro method doesn’t work for everyone. For carriers looking to grow their agency channels quickly, this method can feel inefficient. These carriers often opt for a macro approach, such as email blasting all agencies, regardless of specialty areas. For example, a carrier might send all agents in a specific state information about a new hair salon product, hoping it gets in front of the right people. This macro method can be imprecise with a low return rate.

With the help of insurtech data, carriers can target their approaches to agencies focused on key business areas. In the past, these agencies may not have even been on the carrier’s radar. They can see which agents are selling other carriers’ coverages and how their offer stacks up. Insurance companies can then take this information and do dedicated campaigns.

Forming strong data partnerships with insurtechs

To get value out of the third-party information, carriers should look for insurtechs that are collaborative, and consider the insurer’s specific needs. The data must be actionable: The best data will enable a carrier to pinpoint an area of improvement and quickly act upon it. For example, if insights show that a carrier is not getting a lot of auto mechanic business in a particular geography even though it has competitive premiums, it might be an awareness or education issue. The insurer can quickly create a campaign targeting agencies that specialize in this sector informing them of its offerings.

Carriers should look for insurtechs that are not just going to provide a data dump, but will offer insights into what the numbers mean. Details about agents that sell workers’ compensation to carpentry businesses with no specification about impact can be of little use. Valuable partnerships go beyond data to provide insights, tailoring reporting and information to address carriers’ specific needs.

Finally, carriers should ask for data samples so they can determine if they will be useful. They should make sure the information can be acted upon relatively easily so they can focus on growing their agency distribution channel in the areas they want.

Agent-focused insurtechs can give carriers access to a 360-degree market view. But not all data is equal and carriers should look to partner with providers who can deliver information that is actionable and reflects their business needs. By finding valuable insurtech data partners, insurers can grow agency distribution and increase their business.

Nash Machaka is head of carrier product and analytics at Semsee, the go-to platform for selling commercial insurance. He is responsible for carrier platform strategy that includes streamlining integrations and carrier engagement — working with carriers to analyze data and trends in the small business space. 

Opinions expressed here are the author’s own.

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