Business intelligence for insurance provides teams with the clear, data-driven insights they need to make better decisions, streamline operations, and improve business outcomes. While there are many business intelligence applications in the insurance space, the unifying goal of these tools is to provide insurers with highly relevant information that will help them make better business decisions and improve operations.
In this article, we’ll cover the main benefits of implementing business intelligence in insurance operations, what implementation looks like, and key challenges and strategies for successful adoption of these tools.
What Is Business Intelligence for Insurance?
Business intelligence (BI) refers to the tech-enabled process of collecting, analyzing, and visualizing data from various sources to gain important insights that drive business strategy.
Nearly all industries can and do use business intelligence to power decision-making and better understand market conditions. However, business intelligence is particularly useful in a data-driven industry like insurance.
More specifically, it allows insurers to identify trends and patterns in claims, market, and policyholder data. These insights help insurers stay competitive and profitable by delivering personalized experiences, highlighting risk exposure and responding to emerging market trends.
Key Benefits of Implementing Business Intelligence for Insurance Companies
Let’s take a closer look at some of the specific benefits to insurers of implementing business intelligence into operations.
Enhancing Decision-Making Processes
One of the biggest benefits of applying business intelligence to insurance operations is that it helps teams make sense of vast amounts of data and make more informed decisions.
These tools aggregate and analyze data from numerous sources and produce clear, actionable insights and helpful data visualizations to help eliminate guesswork in critical decision-making.
By providing tangible insights based on real-time data, insurers can confidently make important decisions without being stymied by siloed data or timely manual processes.
Improving Risk Assessment and Management
Effective insurance underwriting relies on insurers’ ability to accurately assess policyholder risk profiles and price their premiums accordingly.
With more data available on policyholders than ever before, it might seem like insurers are in a prime position to accurately gauge risk and price policies. However, collecting and analyzing all relevant data efficiently and using it to assess an insurer’s risk exposure is no small task.
Fortunately, BI tools provide powerful analytical capabilities that allow insurers to assess and quantify risks more effectively from a wide range of data sources, supporting better underwriting decisions.
Streamlining Insurance Claims Processing
Business intelligence can also help insurers overcome slow-moving claims processing workflows and frustrating bottlenecks.
BI tools consolidate and analyze relevant claims data from various sources, including past claims filings, customer records, and policy databases. This prevents claims handlers from needing to track down information sources individually.
By providing valuable insights in easy-to-digest formats, these tools help handlers quickly assess the claim and identify possible anomalies, enabling quicker, more accurate decision-making. Additionally, BI tools can automate certain claims processing tasks like document verification and payout calculation for further efficiency.
In general, more streamlined and efficient claims processing helps improve team productivity, with the added benefit of enhancing the policyholder experience and satisfaction.
Detecting and Preventing Fraud
Fraud is an ongoing problem in the insurance industry, costing businesses and policyholders over $308 billion per year. As insurers strive to improve their fraud detection and prevention measures, business intelligence will prove to be a valuable resource in this pursuit.
BI tools can use machine learning algorithms and predictive analytics to assess regular claims patterns and flag suspicious or anomalous activity as claims are processed. This type of early detection allows insurers to promptly investigate outliers and prevent fraud before it occurs.
Providing Data-Driven Customer Insights
Insurers can also use BI solutions to better serve policyholders and adapt to their evolving needs and expectations, which can support retention and take advantage of new revenue opportunities.
Teams can use these tools to analyze data from past interactions, demographics, purchase history, and other sources to gain clarity about the policyholder’s preferences, behaviors, and pain points.
Such insights might help insurers segment policyholders for more targeted marketing campaigns, spot policyholders at risk of churning, and optimize product offerings according to each policyholder’s demographics and recent behaviors.
Enhancing Regulatory Compliance
The insurance industry is highly regulated, and it can be challenging for teams to stay up-to-date on changing compliance standards and ensure all operations are aligned with industry guidelines.
BI solutions can make it easier for insurers to mitigate risk of non-compliance by notifying them of potential issues or suspicious activities as soon as they arise. These systems can help monitor data in real time, provide detailed audit reports for compliance purposes, and predict possible issues based on historical trends.
How to Implement Business Intelligence in Your Insurance Business
Insurers interested in adopting BI solutions should approach implementation with the following steps:
- Define Objectives: Determine what you’d like the BI solution to help you achieve (e.g., reduce fraud, streamline claims processing).
- Evaluate and Select a Tool: Test out available solutions for insurance companies and select the tool that meets your requirements for desired features, reporting capabilities, compatibility with existing software, etc.
- Prep for Implementation: Prepare for migration by cleansing, reformatting, and verifying data and consolidating data sources where applicable.
- Customize the Solution: Customize the dashboards and layout of the solution so it accommodates the needs of various roles and directly supports your business objectives.
- Train Users: Train relevant users on how to use the tool to support their standard workflows.
- Test the System: Run a pilot program for a designated process or department to ensure the system works as intended and troubleshoot any apparent issues.
- Launch: Roll out the system across the organization and encourage employees to use BI in their daily workflows where appropriate.
- Ongoing Monitoring: Continue monitoring the system and its outputs for quality assurance and update the tool as needed to reflect changing business objectives or goals.
Challenges and Considerations in Adopting Business Intelligence Solutions
Despite the many benefits of BI for insurance companies, there are some possible roadblocks that teams might face during implementation.
Poor Data Quality
The quality of insights the BI solution provides directly correlates to the quality of data in the system.
Even if teams find the right tool for their needs and employees are fully invested in the solution, insurers may not achieve the desired results if their data sources are inaccurate, outdated, or incomplete.
Employee Buy-in
To reap the full benefits of implementing a BI solution, internal stakeholders must be open and willing to use the new tool and adapt their workflows. But if they continue to complete insurance workflows as they’re used to, insurers will miss out on the promised benefits of business intelligence.
For instance, making the business case for implementing BI can be difficult if leaders and key stakeholders are not tech-savvy and don’t feel comfortable using a technology solution to drive business decisions.
Best Practices for Using Business Intelligence in Insurance
The good news is that any challenges to BI implementation can be addressed and mitigated with proper planning and preparation.
Set a Clear Business Objective
The first step in adopting a BI solution, defining the objective, may be the most important step to successful implementation.
Clearly defining the scope and goal of using the platform will allow you to find the right solution for your desired use case and ensure the tool is configured to support business goals.
Identify the main goal you’re trying to achieve with BI support and define the metrics you will use to assess your progress.
Provide Ample Employee Training
Insurers can combat aversion to the new tool and encourage employee buy-in by providing sufficient training and education about the new system.
Position the BI solution as a helpful resource that will make their jobs easier and more efficient rather than something that will add more complexity to their workflows.
Whether through group training sessions, one-on-one support, or self-guided training, make sure employees are brought up to speed on the new solution and are able to voice any concerns before the tool is fully implemented.
Select the Right Tool
While there are many seemingly great solutions out there, not all BI tools are created equal, and insurers must find a time-tested and trusted data analytics solution that provides advanced business intelligence, intuitive data visualization, and data-based insights to help improve performance and efficiency.
Beyond platform capabilities, consider solutions that have a long-standing reputation in the industry, like Insuresoft, with a 100% success rate for implementation, which ensures the platform will be set up to ultimately fuel business growth.
Uncover Data-Based Insights with Insuresoft
Amid rising marketplace competition, continued industry digitization, and evolving policyholder expectations, insurers need a reliable source of advanced business intelligence to support decision-making.
At Insuresoft, we understand the importance of business intelligence for insurance companies and have developed the Diamond Insurance Data Analytics hub to provide teams with real-time operational data and dashboards to help drive strategic decisions. Providing you with in-depth insights from both internal and third-party data, Insuresoft offers enhanced visibility into daily operations so you can make real-time adjustments that propel your business forward.
Book your Diamond Platform DEMO today to see the solution in action!
