Over the years, technology has disrupted many industries, including property and casualty (P&C), health or life insurance, workers compensation insurance, and others. Insurance organizations are leveraging technology to gain a competitive edge over their peers. This is where Competitive Intelligence, or CI, enters the picture, which we will discuss in this blog.
Related reading: Conducting customer behavior analysis in insurance and its benefits
What is competitor intelligence?
Competitor Intelligence revolves around gathering and analyzing your competitor’s successes as well as failures. With competitor intelligence, an insurance provider is able to understand early warnings for market disruptions and areas where they are falling short or where they can act as a bridge.
The primary goal of Competitive Intelligence is to differentiate an insurance company from its competitors through data-driven, strategic planning. However, a CI strategy does more than just keep it ahead of the competition. CI plans can assist with:
- Competitors’ advantages
- A business’ comparative advantage
- Potential market disruptors
- Product and service opportunities
- Efficient supply chain
- Production processes
- Market expansion opportunities
How do insurers use competitive intelligence?
Whether it is a startup or an established firm, CI is the key to success in an ever-evolving insurance industry. CI uses both data collection and in-depth analysis to cater to several aspects of a business, such as the market, customers, and competitors. While the insurance industry has embraced technological changes, it has also clung to tradition to some extent. Competitive intelligence is extremely important to understand the latest trends in the insurance ecosystem, direct competitors, target audiences, predicting competitor actions, determining whether Insuretech is a threat or a collaborator, and so on. To summarize, CI is a predictive tool that adds value at the end of a process.
The Role of a Competitive Intelligence Analyst
Data collection – A CI analyst may use custom systems or simply refine a company’s existing data collection. They will also conduct primary research on customer preferences, competitor data, and market trends.
Analyzing information – The analyst will analyze the available data and gain practical insights from the same. In this step, most analysts leverage artificial intelligence (AI) and machine learning (ML) to complete collection and organization tasks.
Reporting – Last but not least, the CI analyst will present, explain as well as discuss findings with the rest of the company. The role of a CI is also to provide actionable plans for specific departments. A CI analyst typically works with sales and marketing teams to help in forming practical strategies and acts as a centralized resource of the market, competitor, and consumer insights.
Benefits of Competitive Intelligence in Insurance
Now let us talk about the advantages of CI in the insurance space and why every company should consider using CI.
Identify competitors: As mentioned before, CI enables a company to find out its direct competitors in the market. Constant monitoring of the competitor landscape helps to strategize every step of running an insurance business.
Identify product, service, and market opportunities: There are so many opportunities these days and thus, having clarity about technological advancements is mandatory in the insurance industry. CI also helps you make informed decisions when it comes to products, services, and markets in the insurance space. For instance, Insuretech is the “hot topic” right now and insurance providers should adopt it to stay ahead.
Retain customers: As a business, you need to understand that pricing is one of the major reasons why customers switch from one insurance provider to another. Proper analysis of consumer behavior allows you to press the buttons to retain your customers. With so many insurers out there, a business needs to take all the steps to retain current customers and attract new ones.
Make strategic and tactical decisions: The world moves fast and thus, you cannot afford to delay decisions or even rush them without a full understanding of the environment and risks. The insurance space needs a company to gain better insights about other companies so that they can make the best decisions at every step of running a business.
Gain guidance for implementation: While implementing CI, you would also get a team that will help you with efficient, effective implementation.
Challenges of Competitive Intelligence
CI has never been more relevant with data being available more than ever. While large chunks of data are available now, it is becoming impossible for companies to manage it, which is a huge challenge. In fact, the tools needed to manage such data are also complicated.
Fractured data and legacy systems block companies from extracting value and making the data actionable for companies. Another major challenge is the lack of consistent data which leads to organizational inefficiencies and prevents insurers from leveraging the full potential of data in CI.
Moreover, half of an analyst’s time is wasted on wrangling the data, which is cumbersome and time-consuming. It is a roadblock for insurers to understand the mechanisms related to customer value. A demand for customer-centric analytical solutions that allow insurers to link different pieces of data about a customer, thus creating a holistic view across products and throughout the policy lifecycle.
What to expect going forward?
To wrap it up, competitive intelligence or CI is inevitable in the success of insurance companies. Despite the challenges such as the lack of reliable data, competitive intelligence benefits in insurance helps companies gain a competitive edge and stay ahead in the market. The future seems bright in the space with the introduction of CI tools and resources. To be successful, insurers should maintain flexible processes and make data-driven strategic decisions. As technology continues to evolve, CI will only become more relevant and critical. It will become the solution for also surviving during disruptive seasons.
Based on insights by Chahat Khatter, Manager, Research and Information, BFSI.