Insurance Industry: Having access to data about potential customers, with the ability to use that data to discover market trends, previously unknown correlations and customer preferences, is essential to help companies and business leaders make informed strategic decisions.But data decays at an alarming rate. For example, every day almost 10,000 households move and there are 3,000 daily changes to the Postcode Address File, resulting in almost 20% of businesses losing a customer because of incomplete or inaccurate data.
“Often, the data companies have access to is unorganized raw material that needs to be cleaned, rationalized and transformed before it can be used to make decisions,” says Traffk co-founder and CEO Paul Ford. “Poor quality data can affect a company’s bottom line and limit their ability to create the right products for their customers. With better data you know how to price risk and be more competitive with your products.”
Insurance is an essential safety net for many individuals and families, but many insurance policies are created based off of outdated legacy business models and systems. The data that many insurance companies use is not just incomplete, it is very outdated—based off of mortality tables that were developed in 1971 and 1984.(5)
Incorrect or insufficient data doesn’t just affect customers, it can harm the entire insurance industry and stifle its growth and digitalization. Insurance companies are starting to understand the advantages of using more data but they often stumble when it comes to how to best use it, prizing quantity over quality or putting together piecemeal programs. Many think that by digitizing their current information, taking years of business records and converting it into a digital format for easy reference, they have conquered their data deficiency, but they need to adopt new technologies into daily business activities and embrace digitalization to truly succeed. A digitalized business will be able to generate additional revenue by providing better value and new opportunities to customers. Digitalized companies also save money with less double handling of data and greater decision-making accuracy, leading to better use of resources.(6)
Poor quality data can lead to flawed communication, it may result in a company sending out misinformation and missing important opportunities. If not corrected early on bad data can have other serious repercussions including:
Correct data can help insurance companies price products more accurately, be able to understand the demographics of who is ready to buy and get the right risk on their books—making them more profitable in the end. The right data used properly can also help to create better products that people need. Traditionally insurance companies have based new products off of already existing ones while only analyzing about a dozen different data points. While Traffk’s cloud-based AI assisted software can process 4,000 different kinds of data from 20 years of mortality, demographic, health and government trends resulting in a totally different, more dynamic algorithm.
“Under the current model 20 to 30% of the people who apply for insurance are denied coverage because companies are only considering a small set of health information about applicants, but with more data points, you can get a better picture of someone’s true risk and realize that they are a good candidate for life insurance. If there was a way to recapture 5% of the people who were typically denied, that would mean the entire multi-trillion-dollar industry would grow by 5%, having a tremendous beneficial effect all across the board.”
As insurers look to realize the benefits of data, poor quality will remain one of the fundamental challenges that needs to be addressed. A West Monroe Partners survey, identified poor quality data as the biggest roadblock for insurers looking to implement digital information into their decision-making process leading to a compromised customer experience, missed opportunities and incorrect risk evaluation.(8)
Traffk’s model places an emphasis on having the correct, clean, necessary data to make the best decisions in a timely manner. This also means that people who were deemed to be too risky to insure can enjoy having life insurance. Traffk’s own New Spectrum Life, for example, can help a diabetic—so often turned down—get insured. Plus, they can do it in minutes, not weeks. This approach can work with any insurance carrier and incorporates agent input to help curate and design products ensuring that it is something policyholders need and that insurance companies have the tools and products they need to succeed in the digital age.
Traffk is an innovative insurance underwriting and distribution platform designed to build and launch modern insurance products and brands that scale. With more than 25 years combined leadership in insurance and AI, Paul Ford, Glenn Hibler and Jason Thomas co-founded Traffk as a solution to the problems of inefficient, assumption-based underwriting and slow processing in the insurance industry. Traffk’s goal from the start has been to comprehend the risks and modernize the insurance underwriting process by leveraging modern-day tools. Traffk enables risk bearers to leverage the underwriting process with its data-enrichment technology and integrates and analyzes data to glean insights pertinent to insurance. Traffk works with agents as partners, providing them with the digital tools to work with an efficient sales process and engage consumers with a fast, accurate process for insurance policies, changing the insurance landscape for the better, forever.