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BI + Analytics + Metrics do not (Necessarily) = Love

Donald Light | July 07, 2014

How can this be?

I have been a customer of my primary insurer for over 20 years. I’ve had auto, homeowners and personal umbrella with them—with a substantial combined annual premium. You might think my insurer would like me to feel the love (and by the way keep me as a policyholder).

If that’s what you think, you’d be wrong. My current policy count with this particular insurer is down from three to two, and by year end it will be zero. To paraphrase an old saying: I did not leave my auto insurer, my auto insurer left me.

I can put up with a lot of indifference from my insurer, but I cannot put up with learning that my auto policy will lapse in two hours for non-payment of a renewal premium, without any prior notice of the premium due for the new term.

Here is the timeline of all communications I received regarding my auto policy (note the term ended on Sunday June 29, at 12:01 am)

  • Thursday June 19: a printed reminder of my renewal was processed by my insurer
  • Monday June 23: the letter with the renewal reminder notice was post-marked
  • Around Wednesday or Thursday June 25 or 26, I received the letter from my insurer with no indication on the envelope about the urgency of the contents
  • Saturday June 28 around 10 pm, I opened the renewal reminder notice which informed me that:
    • To continue coverage a payment must be received by Sunday June 29
    • And to make that payment, I could contact my company at a branch (closed at 10 p.m. on Saturday), or call toll free to a service center (also closed until Monday morning)
  • Saturday June 28 from 10:15 to 10:45 pm: I visited a 24X7 website of another insurer, got a quote, spoke to an agent, had my coverage bound, and downloaded my certificates of insurance
  • Sunday June 29 around 9 am: I got into my car and drove it, fully covered by my new insurer
  • Since Sunday June 29: the number of communications I have received from my insurer (with whom I still have my homeowners and umbrella policies) = 0

How can this be?

My insurer is a large company. Professionally, I know a number of people there, and they are all knowledgeable and hard-working. The company has BI, analytics, and metrics capabilities.

So what went wrong? I don’t know, but I’ll take a guess.

  • Analytics capabilities add value only if the right questions are asked and answered. For example, what is the lifetime value of multi-product policyholders whose policies non-renew?
  • BI systems add value to operations when dashboards and reports include data about how the key activities impacting revenue, losses, and service levels, e.g. how many non-renewing policyholders failed to receive timely (or any) renewal notices?
  • Metrics add value only when they are focused on the most important activities, and the right managers take appropriate remedial action as needed, e.g. is the number and kind of non-renewed policies at an optimal level, and if not, what will be done, by whom, and by when?

So here is an improved version of the equation in the title of this blog:

BI + analytics + metrics + the right questions + the right questions (should) = love.

(Note: some of the facts in this blog have been altered slightly in order to make the narrative and conclusions more general.)

(Donald Light is director, Celent Americas property/casualty practice. He can be reached at dlight@celent.com.)


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