Modernize Your Insurance Competitive Intelligence

In the ever-evolving insurance industry, pricing strategies are crucial to helping stay competitive and profitable. However, many carriers may still be relying on outdated, manual processes for gathering and analyzing competitive rate level data, which can hinder their ability to respond to the constantly shifting market conditions with informed insights. As insurance carriers face resource challenges and managing growing volumes of data, the need to modernize and simplify your competitive intelligence (CI) efforts has never been greater. Here are 10 compelling reasons for you to update your competitive rate benchmarking efforts today.

1. Skilled resources are in short supply.

   Whether due to attrition, reorganization or downsizing, competitive rating experts are becoming a rare commodity. Without this expertise, carriers are often left with infrequent, inadequate, and/or inaccurate information regarding rate-level competitiveness, resulting in poorly informed (or completely unaware) decision making. A modern competitive intelligence approach that improves accessibility of insights across multiple departments within your organization can help you fill this knowledge gap and ensure you are making more informed data-driven decisions at every level.

2. Downloading software and data has challenges.

   Software downloads and installs take time, which may translate to delays getting data and critical insights into the hands of your team members. In addition, your IT department may have restrictions on downloading external software. A streamlined solution like a cloud-based portal can help provide automated data updates and allow multiple team members across the organization to access the information they need on-demand, without the hassle of downloads or IT permissions.

3. A lack of updated and comprehensive shopper profile data means guesswork.

   The U.S. personal lines auto and home insurance market has seen significant changes in consumer shopper profiles in each of the last several years.Leveraging a comprehensive and updated shopper profile dataset as part of your CI efforts can be critical to helping determine whether your rate levels are appropriate and if they’re helping attract the right customer risk profiles. Accurate rate assessment and benchmarking requires that this data is current and comprehensive, encompassing the vast majority (> 80% of the shoppers in your markets) to allow sufficient segmentation analysis. A modernized CI approach helps ensure that competitive rate level data is more readily available for consumption across your organization.

4. Independent agent data is only part of the picture.

   The independent agent market that leverages comparative raters accounts for approximately one-third of the U.S. personal lines insurance shopping universe and excludes major direct and exclusive carriers. If your current CI efforts are based off comparative rate data, you may have a significant gap in your competitive rating data set. To understand the market more effectively requires a comprehensive view of the U.S. personal lines insurance shopper universe – across all consumer types and distribution channels. A modernized CI program with comprehensive shopper and rate level data can help provide this broader perspective, ensure you have access to benchmarking rating data from all your key competitors – regardless of the channel(s) in which they compete.

5. Not understanding the risks that are shopping can lead to costly mistakes.

   Without access to robust and updated competitive rating data, your ability to validate that you are accurately rating the risks that are out shopping may be hampered. Understanding the actual risk profiles that are actively shopping for insurance helps both underwriters and actuaries, especially when evaluating entrance into a new market or market segment. Otherwise, you may risk making ill-informed decisions, wasting marketing dollars and delaying rate adjustments to maintain a competitive edge in a new territory. Improving the timeliness and accessibility of your competitive rating insights helps allow you to make more data-driven decisions that are both timely and more likely to achieve your goals.

6. Outdated data can be worse than no data.

   Insurance rate levels change frequently, with multiple revisions per month. If you’re working with stale data from six months ago, you're already behind. Ideally, you want access to relevant, monthly rate level information whenever you are making decisions. Modernizing your CI program can help ensure that your access to rating changes and shopper data is updated monthly, so you can better respond to market shifts.

7. Data collection is time-consuming and labor-intensive.

   Manually gathering rate change data across all your markets can be a monumental task, one that typically requires several experienced rating and pricing resources. Reducing the number of carriers you monitor may save time but also narrows your market perspective, leaving you potentially vulnerable to missed opportunities. A modernized CI program can help you gather, process and analyze rate change information from trusted sources who have the expertise and resources to stay on top of relevant rate changes. It can also help to reduce the burden on your team of providing the necessary comprehensive market view to achieve your business goals.

8. Spend Time Analyzing Data, Not Manipulating It.

   Carriers regularly file thousands of pages with state regulators with every rate revision. Evaluating, normalizing and standardizing the underwriting rules and rating data from each filing – and keeping an accurate and up-to-date rating manual across filings over time to enable meaningful analysis takes significant time and expertise. Modernizing your CI program to leverage trusted sources who perform this task at scale can help streamline this process for you, reducing your time spent manipulating data and freeing up your limited resources to focus on extracting actionable insights and developing strategies that will help improve your competitive positioning.

9. Agent feedback should help inform strategy.

   When your agents in the field report that prices in certain segments are too high or that they’re losing market share, you need the tools to help pinpoint the issue. A modernized CI program with the latest rate level data can help provide you the insights you need into conversion rates and competitive positioning across different customer segments. Access to these insights can help you quickly determine whether you're targeting the wrong risks or pricing yourself out of the market.

10. Multiple departments demand access to competitive rating data.

Pricing analysts are no longer the only ones demanding competitive information on rates. Today, Marketing, Sales, Product Management, Analytics and even C-suite executives want access to this information – each with their own specific needs and timelines. A modernized CI approach to rate benchmarking helps ensure that all departments can access the data they need, without overwhelming your CI resources or creating workflow bottlenecks.

Compete more effectively

A modernized approach to competitive rate level data and analytics helps provide insurance carriers with a host of benefits, including reducing manual labor and improving decision-making across the organization, which will help you spend less time gathering and manipulating data and more time uncovering opportunities for growth for your organization.

In today’s fast-changing insurance market, staying competitive involves intelligence tools that help you make data-driven, marketing and expansion decisions quickly. By improving your access to updated competitive rate level data, you’ll be better positioned to keep up with market shifts, improve your risk assessment and segmentation and maintain a strong competitive edge.

LexisNexis^® InsurQuote^® Direct is a powerful competitive intelligence solution that provides monthly rate level data on the auto and home shopping universe in an easy-to-use portal. It helps insurers accurately and strategically evaluate their position in the marketplace across thousands of auto and home insurance shopper profiles. Learn more about how InsurQuote Direct can help your organization.

ⁱLexisNexis® Risk Solutions, Internal Study