This content is repurposed from Agency Nation’s Tech Talk 20 Questions with Brian Wood podcast episode that aired February 14, 2020.
This is part two of Brian's interview. Read the first part of the interview here.
Interview with Brian Wood (Continued)
IVANS: Can you explain a little bit more about why an agency would need a data strategy?
Brian Wood: Absolutely. Without a data strategy, I think you’re largely lost. At least empirically – from my experience as well as from what the studies show – I don’t think you can compete in today’s market.
In addition to that, a data strategy allows you to do a number of things: it allows you to optimize your internal operations and it allows you to drive greater employee productivity. If you’re an agency that does any amount of personal lines or small commercial business, you have to really focus on employee productivity or you’ll find yourself spending more money on a prospective client or renewing client than you make as an agency.
Increasing your profitability with your carrier relationships is extremely important. That’s everything from making sure that your business is being placed with the markets that are the best fit for your client and your agency, as well as understanding who out there is the most competitive.
You may be missing out on business today because you don’t have the full picture of the best markets to place your business with. Or if you do, do all the people in your agency have that information in an easy-to-use format?
I think the last piece – which is critical – is that new customer acquisition and growth are a major focus. Oftentimes, once you have a customer it’s years two, three and four when you really find strong profitability around that client so client retention is crucial. Utilizing data and having a data strategy to drive these things is critical.
“It’s difficult to accurately access the health of your business without having key performance indicators (KPIs).”
IVANS: You mentioned optimizing internal operations. Can you tell us a bit more about what makes this part of a data strategy so important?
Brian: It’s difficult to accurately access the health of your business without having key performance indicators (KPIs).
Here are a couple of examples around operations and productivity:
- From a productivity or even growth perspective, how is my growth compared to last month or last year all the way down to an individual producer?
- How are my producers doing year-over-year? How are they doing compared to last month?
- Who’s changing? Do I have somebody who has, historically, been one of my lower performing producers who has over time become much stronger? If so, what are the things they’ve been doing that is helping them get there?
From an employee perspective, there’s a ton of metrics that we use to help identify employee productivity and trends in productivity. We often identify the number of times an account manager may touch a particular policy. It gives you great insight into which of your clients are requiring the greatest amount of handholding and which aren’t. Sometimes you may actually want your agents and CSRs spending more time with clients.
What it also does is it tells you when that changes. Maybe an employee that typically has a high level of activity is significantly decreasing the amount of activity they’re doing for their clients. That’s something you’re going to want to know and identify before it turns into lost clients or maybe even losing that employee.
IVANS: Why do you feel that agents have been so slow to adopt data analytics?
Brian: I think for a couple of reasons. One – and really the most straight forward – they’re busy.
Agents have a lot on their plates. They’re managing their insured relationships, principals are managing all the agents within an agency, they’re managing their end-clients, and by the way, agencies are businesses so they have to do all the stuff that a business owner does as well – all the accounting and other pieces.
So, from a busyness perspective, data analytics has been on the backburner for some agents. I think that’s where some of the things we’re doing have really helped as far as putting a lot of people and support around agency leadership to help them adopt data analytics and give them a roadmap to do that. As well as building things within and automating it.
“Know yourself. Understand what you do and do not do well as an agency.”
IVANS: For an agent looking at data analytics, what would you say are the first steps to take when looking at data analytics tools to get started?
Brian: A couple things that are important: Know yourself. Understand what you do and do not do well as an agency.
From a data perspective, are you an agency that understands the value of data and is making sure that that data is entered within the client records, that it’s structured so you have access to things like industry classifications, geographies, addresses, client size (payroll or employee number) – things that are really important to understanding a client – and things like productivity? If you know those pieces, whether it’s an agency management system solutions provider, or some other solution, it’s very easy to figure out whether a solution aligns with your needs or not.
IVANS: After an agency selects a tool, what’s the next step?
Brian: You want to make sure you know what the KPIs are that you want to measure. Once you know the solution can provide those KPIs, you want to be in a position to take advantage of those insights and take action against them.
What you don’t want to do is spend a lot of time getting a data analytics solution and then not leveraging it because it’s a source of really crucial insights you’re missing out on.
IVANS: How does data help agencies and insurers better align on business opportunities?
Brian: A host of ways. You have the ones where you don’t really think of it as data analytics and insights but it absolutely is.
There’s pretty significant turnover within the industry. We have less than 3% unemployment, but we have a lot of people retiring with 20 and 30 years of placing experience. The people coming into those roles have much less experience. A lot of times when someone joins an agency, even if they understand placing business, it takes them a long time historically to know who their appointed markets are, what their carrier partners’ appetites are, and what business the agency is writing with carriers.
From a market appetite perspective, one of the products that EvoSure built solved that problem. I remember in 2012 we would go to agencies and the way in which new CSRs, account managers, and producers knew their appointed markets was they would go to the hallway in front of the office and look at the plaques to see what carrier names were listed. Whereas now, right within the agency management system, they not only can see exactly who they are appointed with but all of the eligibility information and can even connect and do submissions. That is just a world away from where it was.
Another way that it aligns is with business opportunities. If an agent has a traditional relationship with an insurer that they’ve been really strong with for a long time, how do they know that their quote rates are moving down and the carrier is declining more of their business? Not only do they have a challenge now with that relationship with their insured market, but they also may need to rapidly look at alternative markets and do that assessment to figure out if they have producers that are really strong in a particular class of business, industry, or whatever.
I hear from agencies all that time that have written their business with a single market, and what feels like overnight, that market has decided it’s no longer growing. Maybe they’re not taking any new business, or maybe they’re completely moving out and no longer renewing that business. What do you do?
Being able to see the trends in your data to see that starting to happen before that carrier comes to you and says, “hey we’re moving out of this business,” is huge. Those kinds of things are what really provide a significant advantage for agencies that use these kinds of insights.
"What I'm most excited about is people in the industry taking data and utilizing artificial intelligence (AI) and machine learning (ML) to create really strong insights."
IVANS: What makes you excited about data analytics?
Brian: I’ll come back to something I mentioned previously. What I’m most excited about is people in the industry taking data and utilizing artificial intelligence (AI) and machine learning (ML) to create really strong insights that not only are informational but help guide what their next steps may look like.
I’ll give you a great example: So we’re launching a premium benchmark for Business Owners’ Policy (BOP) in the next month. What that’s going to allow is for an agency to look at their book – upcoming renewals – and see how their positioned from a competitiveness perspective for each of their upcoming renewals (and maybe even utilize it for new business).
Maybe they’re positioned very well and the rate they’ve been able to procure for the end insured is really strong; it’s a great product and they’re really competitive. Well that’s a message that the agent can take to their end insured and say, “we look really well-positioned for your renewal and we’re not recommending that we remarket your account.” Or vice-versa, they may look at the data and identify the premium is in the 90th percentile compared to their peers, their class, their geography, etc.
They should really look to market this upon the next renewals, especially if it’s a client that is important to them, because what they likely know is if a competitor is able to go and get a quote, they will likely be able to come back with a more competitive offering.
That gives agencies in our industry a lot of power to make great decisions on behalf of their clients.
“I think data analytics is going to be a catalyst for a much stronger user experience.”
IVANS: What is one thing you wish to see in the industry because of data analytics?
Brian: Looking specifically at the independent agency channel, I think data analytics is going to be a catalyst for a much stronger user experience.
When you see what some of the direct writers are able to do from a UX perspective with the insured, I think that’s something we’ve lagged behind in the independent agency channel. I think data analytics is the kind of information that we’re going to be able to utilize to deliver to our end insured the advancements of a lot of end insured new business interactions – whether it be web-based or other.
I think we’re going to be able to really accelerate our ability to provide a user experience to younger generations of people who are becoming the main insurance consumers.