The power of competitive analysis in the insurance industry

insurance industry competitive analysis

The intricacy of the insurance sector has long been a deterrent to new entrants in the market, along with other entry-level obstacles. Essentially, this has shielded insurance firms from new types of competitors that offer seamless, customized services driven by customer needs.

Insurance companies have discovered that by combining first-party data with third-party insights, they can gain a better understanding of the risks to their operations and how to mitigate them without pricing themselves out of consideration. The combination of first-party data and third-party insights reduces risk and uncertainty, enabling effective resource allocation, fostering product innovation, boosting economic growth, and improving the efficient production of financial services. Therefore, competitive analysis plays a crucial role in the insurance industry.

Competitive analysis (CA) explained

Competitive analysis isolates each competitor’s operational strengths, substantive weaknesses, product offerings, market dominance, and missed opportunities with a focus on finding market participants poised to encroach on your chance. 

The insurance industry outlook shows increased competition

  • New rivals appear in all shapes and sizes, from major technology firms to small optical shops.
  • In order to adapt, well-established insurance firms must change their focus from a product to a service mindset.
  • Insurance companies need to prioritize the consumer experience and comprehend what clients want.

For a long time, established insurance providers are successfully adjusting to this new competitive environment by embracing the change from providing insurance as a product to providing insurance as a service that satisfies client requirements. Insurance companies must adopt a customer-first strategy in order to maintain and increase their market share. This strategy is frequently best served by an ecosystem of players both inside and outside the traditional limits of the insurance industry.

Here are some of the major goals of competitive analysis.

  • Find potential market disruptors
  • Understand competitors’ advantages
  • Your comparative advantage 
  • Product and service opportunities
  • Market expansion opportunities in the space
  • More efficient supply chain and production processes

Now let us take a look at some examples related to competitive analysis.:

  • Product analysis: It can have a significant effect on what customers do next if your competitor releases a new product, enhances an old one, or removes one from the market. Such updates (as well as the kinds of activity that can result in them) are tracked in real-time using competitor tracking.
  • Campaign monitoring: A fresh marketing initiative can give businesses hoping to outsell rivals a sizable sales lift. Competitor monitoring can be used for things like getting notifications when campaigns go live, information on how and where the campaign is being spread, and insight into how customers are responding.
  • Social media monitoring: It can be very telling about a company’s brand strategy, attitude, and plans to see what and how it shares and interacts with customers online. The number of followers it has and the degree to which they interact with it can also disclose a lot about its popularity and the interests of your own target audience.
  • Price tracking: Price changes can have a significant impact on customer buying choices, particularly during a cost-of-living crisis. Price changes can be monitored in real-time using competitor monitoring.
  • Investment monitoring:  A new era for the company, one that may have greater purchasing power, may begin if a rival gets investment. Likewise, it may indicate a shift in strategy if they are acquiring other companies or spending money on new technology or equipment.

    Related readingNavigating the insurance market: The benefits of competitive intelligence

Benefits of competitive analysis in the insurance industry

  • Respond faster to new market threats: Automated, real-time tracking lets you know as soon as a rival engages in action, giving you more time to address threats to your revenue. Real-time competitive intelligence gives you the ability to adapt and respond quickly to any of these situations, whether it be the introduction of a new product, the addition of new features to a current product, or a change in price.
  • Capitalize on new market opportunities: Insurance industry competitive analysis is more than just a means of defending your profits from competitors. Additionally, it can assist you in locating market gaps, weak spots, trends you can capitalize on, and, if a rival makes cuts, opportunities to gain more clients. You can develop a complete image of the market and identify potential growth areas by keeping an eye on a variety of sources, such as competitor announcements, industry news, and social media sentiment.
  • Become the best-informed business in your market: The strongest companies are those that possess the most, even if they aren’t quite at the point where they are using it to control the market. Every company, including your rivals, will monitor the markets and competitors in some way. However, the right strategy, tool, and procedures can give you more insight than any other company, giving you a significant competitive edge.
  • Build a stronger strategy and product roadmap: These same departments can review, better, and further develop their strategies and roadmaps using the intelligence that is provided to them in addition to keeping them informed. That could be how you handle accounts, create products, handle sales, promote your business, or even set the direction for the company’s main strategy. The proper method can translate the appropriate intelligence into actions that enhance performance.
  • Benchmark your position and progress: It can be challenging to determine where you and your offerings stand in the market in comparison to your rivals and their offerings outside of company-level posted figures. Comparing and contrasting your product with those of your rivals using a range of metrics is one of the most common applications of competitive intelligence. Together they’ll provide you with a full picture of your place in the market.
  • Predict what competitors do next: Competitive monitoring involves more than just responding to breaking news. To spot trends and opportunities, it may be necessary to create a picture of the market over an extended period. A great way to have comparable data to learn from is to choose the most crucial metrics to monitor early on. Before you create your strategies, it might assist you in regaining your concentration and setting priorities.

Challenges of analytics implementation

Most insurers can readily comprehend the benefits of being able to use the copious amounts of data that are at their disposal. However, adoption still faces obstacles. Many of these companies, it could be claimed, are decades or even hundreds of years old, and the accumulation of legacy systems – a common complaint of organizations from many different sectors – hinders the seamless integration of data from an expanding and never-ending set of sources.

However, given the importance of data to their operations, insurers are frequently the commercial entities working on data that are best at adapting to the times. Additionally, there is no one method to automate the analysis of this data and the effects it may have on the organization. Secondly, it takes highly skilled data scientists who are equally adept at the art and science of data to conduct the analytics that have the greatest impact on the business’ many disparate strategic needs and outcomes. These are hard to come by.

What the future holds

Insurance companies can evaluate and incorporate changes into their company plans. Not only are there new channels and devices to take into account, but data is entering the company in formats that are constantly changing. Considering the Internet of Things (IoT), as an illustration one of the components of IoT that can collect data on everything from diet and living conditions to pulse and blood pressure is wearable technology. For underwriters, data and analytics will always be essential, and they benefit from data with above-average quality. Technology handling of this data is expected to increase, and consolidation is anticipated.

Netscribes helps firms meet these goals through in-depth market research.  To know how we can help you harness the power of competitive analysis in your insurance industry niche, contact us today.

Based on insights by Yash Raj Chaney, Senior Associate, Research and Information, BFSI.

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