Producer Management Presents Opportunity for Predictive Analytics

Insurers use analytics for measuring compensation and production, though fewer use the tools for improving underperformers, according to new research.

Insurance Networking News, October 11, 2012

Chris McMahon

Insurers that have invested in analytics tools in the past year are just beginning to recognize their ability to manage producers and improve their performance with the technology, according to “Predictive Analytics in the Insurance Industry: Trilogy and Insurance Networking News Predictive Analytics Usage and Interest Study.”

"Predictive analytics are essential to driving better producer performance, and insurance companies are beginning to recognize the value and benefits of applying technology to this critical area of their business," said Joe Kelley, president of Trilogy Insurance & Financial Services.

Insurers also said they are effective with measuring agent/producer compensation (68 percent) and agent/producer production (68 percent), but less so with forecasting producer revenue (60 percent) and improving under-performing producers (56 percent).

More than half of respondents offer training, customer service and marketing support, coaching, competitive compensation for producers, and sales support to more than half of their producers, the report finds. However, targeting such activities is an opportunity; 76 percent offer training, 85 percent offer customer service support, and 55 percent offer marketing support; just 28 percent provided leads.

Additional Highlights:

• The top three benefits of current data/analytics solutions are: customer segmentation; improving the competitive advantage of insurance carriers; and retaining existing insurance customers

• Insurers realize the value of new products and technology to run their business, improve service performance and reduce costs, but insurers said they are not fully effective in managing agents, brokers and distributors against the top priorities

• Insurers are interested in producer management solutions; 57 percent of respondents without a producer management solution are interested in getting one

Data/analytics are most often used on customer-focused activities, such as customer segmentation (37 percent), improving competitive advantage (36 percent) and customer retention (36 percent). Just 12 percent are using data/analytics for fraud detection. The report concludes with the suggestion that offering producers access to predictive analytics could drive smarter distribution for insurers.

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