At first glance, insurance sales and big data may seem to be at opposite ends of the spectrum. The former is a personal business, built on established trust and mutual understanding. The other, when applied improperly, adds up to nothing more than a bunch of numbers.
Customer Relationship Management activities have grown increasingly sophisticated, but remain focused on the capture and use of internal data, or data that is within a closed sales and service process. When the term "big data" was first introduced to the insurance world, many thought that it had to do with the massive amounts of data housed in legacy insurance applications. To be sure, there was and still is a lot of valuable data in old systems. However, "big data" is an expansive term that relates to all of the data that is created and available external to and outside the firewall of insurance companies. Think of all the financial, legal, and personal information that is "out there" in various systems that is readily available. When viewed in this light, there is a plethora of data and information that the savvy insurance marketer, agent, advisor, broker, or carrier has available to build business. Throw in analytics and it makes the whole topic of big data even more interesting.
An SMA report encourages agents and carriers to apply big data and analytics to three key areas of their business: customer-centric, risk-centric and finance-centric activities. While customer-centric analytics will have the largest impact on the agent, the three categories influence each other. Big data solutions require a certain amount of investment and risk, but shouldn't be feared. Here's how advisors will be using big data in the next few years and how carriers can get a head start.
Enter social
Like it or not, consumers are distancing themselves from their hometown agent, not necessarily by choice, but there are generational and demographic factors, as well as ease of doing business factors. Life insurance is a relationship business and advisors that have spent extensive time in building a personal and professional relationship with a client must understand why and how, social media is a friend or foe to the advisor. Facebook has replaced Main Street as a place to catch up and make business connections. Savvy agents likely have a Facebook page already, but social activities of the future will be dynamic. A recent survey by the Young Agents Association noted that 60% of those agents use social media in their business on a regular basis.