ATLANTA, Oct. 23, 2017 /PRNewswire/ -- Insurance underwriting and marketing teams who work together on acquisition and retention strategies are better able to attract more long-term and profitable customers, insurance carriers believe. Yet this cross-team collaboration is a challenge across the industry, according to the latest research from LexisNexis Risk Solutions.
LexisNexis Risk Solutions conducted a study of 155 senior decision-makers within the top 50 auto, home and life insurance carriers, highlighting the results in the new Collaborate Across Functions to Acquire With Retention in Mind whitepaper. The research found that the relationships between insurance marketers and the underwriting/product management teams are often out of sync, exposing untapped opportunities to target prospects with the longest potential future relationships.
Collaboration is Key
While 94% of study respondents agreed that greater cross-functional collaboration is important, only four in 10 respondents said that they build their acquisition and retention strategies together.
"Carriers are struggling to find and keep policyholders who not only match their risk appetite, but remain loyal long enough to recoup their acquisition costs, let alone reap a profit," said Sandeep Kharidhi, VP Acquisition & Retention Solutions at LexisNexis Risk Solutions. "The research reveals that carriers need to get marketing and underwriting teams more closely aligned so they can collaboratively develop strategies to acquire customers with retention in mind.
"At the same time, profitability was the number one metric for all responses because both teams are driven by the same metrics. This synergy creates a huge opportunity if they choose to focus on it."
Understanding Common Goals
The research showed that insurance marketers and underwriters have a good understanding of the core goals of their counterparts. However, one interesting disconnect emerged in relation to the core business goal of obtaining an optimal spread of loss exposures. For example, while obtaining an optimal spread of loss exposures is a top three business goal for underwriters, just 18% of marketers cited the need to "obtain optimum spread of loss exposures" as a key business goal; a significantly higher percentage of underwriters and product managers – 43% – listed this as a key business goal for marketers.
"We interpret this as a suggestion from underwriting that they welcome the opportunity for marketing to be more aligned with them in terms of this goal," said Kharidhi.
Pursuing High Priority and High Return
Another key finding from the research is the struggle carriers have in identifying the highest return opportunities, whether they be consumer segments or specific marketing programs, so that they can better prioritize their marketing efforts. The majority of respondents – 57% – said that the ability to zero-in on these highest-return opportunities was an unmet need.
The research suggests that identifying high-return opportunities is directly linked to good data and analytics. Not surprisingly, 43% of respondents said that their current data sources fall short in helping them identify prospects and programs that represent the greatest profit opportunities.
Similarly, 54% of respondents believe they need to improve their understanding between marketing efforts and customer conversion.
Kharidhi said, "Marketing attribution is a number one priority for marketers today. Where 49% of marketers told eMarketer1 in 2016 that better reporting, measurement and attribution was their number one priority, the percentage had increased to 74% in 2017. This year on year increase is staggering and indicative of how top of mind marketing attribution has become."
"Acquisition with retention in mind is a critical business imperative," according to Kharidhi. "The need to align marketing and underwriting/product management into a collaborative team, focused on getting and keeping the right customers is underscored by insurance shopping trends. Our analysis shows that in the last three years we have seen the number of policies that have not shopped their auto insurance decline by three percentage points – now only 1 in 4 policies have not shopped their auto insurance in the last five years. This means shopping continues to impact business and carriers can't count on loyalty even for the most tenured customers, they need to be strategic in their marketing and underwriting programs."
To download the whitepaper and access additional information from the study, visit Collaborate Across Function to Acquire with Retention in Mind.
About LexisNexis Risk Solutions
At LexisNexis Risk Solutions, we believe in the power of data and advanced analytics for better risk management. With over 40 years of expertise, we are the trusted data analytics provider for organizations seeking actionable insights to manage risks and improve results while upholding the highest standards for security and privacy. Headquartered in metro Atlanta, LexisNexis Risk Solutions serves customers in more than 100 countries and is part of RELX Group, a global provider of information and analytics for professional and business customers across industries. For more information, please visit www.lexisnexis.com/risk.
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1 Source: eMarketer : Interactive Advertising Bureau(IAB) and Winterberry Group. 'The Outlook for Data 2017: A Snapshot into the Evolving Role of Audience Insight Jan 30, 2017
SOURCE LexisNexis Risk Solutions