The Value of Competitive Intelligence and the Data Revolution in Auto Insurance

The auto insurance industry operated in much the same way for decades: premiums were set by broad demographics and imperfect indicators; claims processing and fraud detection were done manually by a human process, whether on paper or computer; and sales and service were siloed off without any integrated way to build relationships with customers.

But now the industry is in the midst of disruption from technologies that promise to change the competitive landscape. Telemetry and big data analytics are enabling companies both to offer customers new and compelling benefits as well as increase profits. The early adopters who successfully leverage the new technology stand to reap tremendous gains in customer acquisition and retention, and with rapidly advancing – and cheaper and cheaper – technology, those who grab the competitive edge have the potential to solidify their advantage and run away with greater and greater market shares.

New technologies offer endless opportunities – and endless ways to waste resources. Competitors that make cost-effective use of new tools and are able to turn big data into the best products and most effective decisions are the ones who will meet changing customer needs and increase their ROI. Even incremental change can gain tremendous competitive advantage.

What role can Competitive Intelligence play in helping companies navigate these new realities?

Smart companies quickly assess and respond to competitor moves to not get left behind, and look for innovative ways to leap ahead. A good CI program plays an essential role in monitoring how competitors use technological advances such as telematics, vehicle diagnostics, GPS, and other sources to, for example:

  • produce individualized risk profiles and targeted premiums
  • offer automated emergency services
  • provide proactive alerts for maintenance before a breakdown
  • locate stolen vehicles
  • use data from all operational areas as well as external sources like social media to build ongoing relationships with customers

Gaining competitive advantage through new technology and data tools is not only key for offering new benefits to customers, but also for harnessing data from many different sources and analyzing it to improve claims management, fraud detection, and risk management.

Competitive advantage is more than learning how competitors get and leverage all their data. The CI operation should focus on

  • How are companies managing infrastructure, staffing, and hardware and software partnerships?
    What decisions are your competitors making about using in-house IT
  • infrastructure vs. outsourcing?
  • How are competitors using different outsourcing models like SaaS, PaaS, IaaS?
  • And which functions are they outsourcing – data collection, analytics, storage?

A company can get ahead of the competition by identifying productive and innovative partners for both hardware and software and leveraging these partnerships. The right partners can be the difference between a good offering and a great offering that will capture the attention of customers.

These are just a few key areas where competitive intelligence can help determine a company’s competitive position and ultimate success. Fletcher/CSI’s Finance and Insurance practice offers industry expertise and proven methodologies to provide clients with targeted research on how they can leverage big data and new technologies to stay ahead of their competitors. Call us to discuss your needs!