Leveraging data analytics to enhance customer experience

Advances in technology and rapid adoption by the wider population have led to the increase in volume, velocity and veracity of data. Insurers are increasingly making use of data to improve various aspects of their business, namely:
 

1. Enabling more ‘modular’ and ‘granular’ pricing. For example, Chubb used geo-segment data to plan its pricing models by modeling for specific risks and providing customers the option to package their home insurance according to their needs.
   
   
2. Improving the customer experience not only during the purchasing experience but across the customer’s lifecycle.
   
   
3. Making their products more contextual and personalized.
   
   
4. Pre-populating fields in electronic forms for new policy purchases, quotes and claims, for the customer’s convenience.

Chubb is heavily investing in data analytics. We employ several hundred data analysts worldwide catering to the needs of various functions in the organization. New tools and techniques are tried and tested at Chubb almost every day. One interesting example is the use of drones to snap photographs of rooftops, which are then analyzed to predict the chance of damage from water leakage. Early warnings like this help customers avoid inconvenience and interruption and also serve to mitigate loss for Chubb.

Having said that, Chubb is very careful in this race of hyper-personalization to not infringe on customer data privacy or violate rules around compliance. Chubb maintains a robust and constantly evolving framework around data governance to ensure compliance with global and local standards for consumer and commercial data privacy laws and regulations.

The benefits will come from multiple factors, mainly:
 

• We have historically seen insurers raise weightage for ‘adverse’ risk behaviors – for example, smokers are charged higher premiums. With the availability of more data, we will gradually witness more granular, risk-based pricing in which positive behaviors are rewarded. For example, people who keep a healthy lifestyle will be charged lower premiums or given discounts for health insurance products.
• Data will help insurers reduce the cost of distribution and we expect a major part of this cost reduction to be passed on to customers over time.
• Flexibility in terms of coverage and payment will make purchasing and renewing insurance more affordable for a wider segment of the population.
• User experience and interaction with the insurer will improve. Insurance will no longer be a product which people buy and hope to never use! Data will drive and encourage positive behaviors, as well as provide product-related ancillary services to the customer for a better experience.