Organizations often miss a crucial step in their drive to acquire and implement technology as a means to remain competitive. The ability of commercial insurance brokers to leverage data and analytics to bring in new business, write policies, and provide added value to their clients is about more than selecting the best risk management information system (RMIS). To get the most out of the investment in technology and become a digital leader, a brokerage should first assess if essential foundational elements are present.
The next-level broker
A next-level brokerage is a firm that has undergone the process of digital transformation, a term that CIO contributor Mark Edmead defines in Digital Transformation: Why its important to your organization as “the acceleration of business activities, processes, competencies and models to fully leverage the changes and opportunities of digital technologies and their impact in a strategic and prioritized way.”
An anonymously attributed response to the Commercial Property/Casualty Market Index (Q4/2018) survey question, “What opportunities for commercial insurance brokers do you see?” can be also be read as a more specific description of the next-level broker. He or she is able to “maximize use of technologies and analytics to grow business and do so with reduced expenses.” Furthermore, the next-level broker has the “[i]ncreased ability to target growth in select industries via use of data and analytics.” Finally, he or she is able to “[i]dentify new ways via technology and through the use of data and analytics, to solicit, write, and service business.”
Analytics functionality is an essential component in the digital transformation into a next-level brokerage. However, the act of putting a RMIS in place (or modernizing an existing system) doesn’t mean that all expectations around analytics will automatically be met. The right mix of people and data must also be present.
Are the right people in place?
Although choosing a system that is backed by excellent system support and expertise is critical, that is no substitute for having people on staff who possess the skills necessary for helping clients get the most value from their data. Many organizations in the risk and insurance industries have put into place plans for hiring and developing the skills of people who understand data and can provide sound consultation and advice to clients, a much-discussed challenge in the current job market.
“Titles such as analyst and strategist all require a human element to be successful,” explains Daniel Newman in 3 Reasons People Are Critical For Digital Transformation Success. “They require critical thinking and creative skills that technology simply does not possess—at least not yet. Again, machines will increase the volume of data that can be processed, but it will require collaboration with humans to maximize the power of AI and computing.” Without those skills, a brokerage and its clients will still benefit from more efficient processes and improved access to incidents, claims, and policy details. However, analytics and benchmarking strategies may be impossible to execute without the right people in place.
Do you have enough data?
Most prospects and clients have great interest in a broker’s ability to use technology to provide additional insights and inform decision making. Though integrated benchmarking solutions are options in a system such as Origami Risk, the reality is that meaningful analysis of a client’s own risk, claims, and safety data is dependent on the volume and quality of data available.
“Like all things that sound almost too good to be true, the devil is in the details. Superior predictive analytics depends on the breadth and quality of data captured,” writes Scott Henck in the Claims Journal article Using Predictive Analytics to Reduce Claim Duration and Costs. “The more data captured in the predictive model, the more verifiable the mathematical conclusions.”
Before making a significant investment based on expectations about the advanced analytics and benchmarking that a RMIS will generate, organizations can benefit from doing an assessment as to whether their clients have enough data to fuel those processes.
When all of the elements come together
Moving beyond spreadsheets or replacing a legacy system with a cloud-based RMIS improves a brokerage’s ability to collect, aggregate, and report comprehensive risk and insurance data to its clients. When it comes to using analytics to become a digital leader, having RMIS technology in place is just the beginning. Assessing if the critical foundational elements—the right people and enough data—are in place are also pre-requisites.
Contact Origami Risk to discuss where you are on the path of becoming a next-level brokerage.