Data Analysis for Life & Health Insurance Agencies
New to data analysis? Then, this is the post for you.
This blog will discuss what data analysis is, how to use it, and what stats to monitor.
It is also important to note that this is a comprehensive overview filled with suggestions and tactics; what works for one person won’t necessarily work for another. Analytics is a learn-as-you-go subject—each time you’ll gain more insight and clarity.
So, let’s start with the basics.
What is data analysis?
According to TechTarget, data analysis is:
“The process of examining data sets in order to find trends and draw conclusions about the information they contain. Increasingly, data analysis is done with the aid of specialized systems and software.”
The data you will be analyzing will likely be raw data or big data.
Big data is just a bunch of numbers gathered together, sometimes listed on a spreadsheet. These numbers could represent the number of visitors to a coffee shop every day, hours of TV watched, the number of adds or terms a month, etc.
However, without analysis, big data is meaningless.
Four types of data analysis for insurance agencies
There are many types of data analysis. The four types we’ll focus on are:
- Descriptive Analysis
- Exploratory Analysis
- Inferential Analysis
- Predictive Analysis
The purpose of descriptive analysis is to describe or summarize a set of data.
“Most raw data, especially big data, is not suitable for human consumption, but the information we derive from the data is.”
—Dr. Michael Wu
Descriptive analysis is the first analysis performed and generates simple summaries. This type of analysis is the 10,000-foot view of your data. Usually, this is presented in a simple graph, chart, or list that is easier to understand. To help you summarize this data, you’ll need to be tracking your data in a spreadsheet, CRM, or other software.
AgencyBloc’s Dashboard Analytics feature summarizes descriptive data automatically with insightful graphs and charts that pull together high-level analytics.
Source | AgencyBloc
Exploratory analysis examines and explores data to find relationships between variables.
Using this information, you can put together ideas of what’s happening in your book of business. For example, using a new lead source helped you sell X% more Medicare policies or helped you generate X% more leads.
Tying these relationships together helps you get a more well-rounded picture of what’s happening in your business and how each part is affecting the whole.
In AgencyBloc, you can build a Custom Report that shows leads generated during a specific time period before the new lead source was introduced. Then, you could run a similar report after for the same amount of time to compare. This can help you draw conclusions about the efficacy of each lead source you have.
The goal of inferential analysis is to use a small sample of data to make assumptions about a larger population.
Inferential analysis is also known as statistical modeling. By pulling out a subset of data, you can more easily analyze the data, put together a finding, and make an estimation, or educated guess, about the results overall.
Every company uses inferential analysis to know where to grow next, which verticals to expand to, which avenues to pursue, etc. As an insurance agency, you can use inferential analysis to know which products to start selling or which markets to move towards to expand your business. Likewise, you can make informed decisions about products you may need to phase out due to a lack of ROI (return on investment).
Note: The accuracy of your inference depends heavily on your sample. If your sample data isn’t representative of the mass of your data, the generalizations and inference you make will be inaccurate.
Predictive analysis helps you make predictions—like weather predictions.
"The purpose of predictive analysis is NOT to tell you what will happen in the future. It cannot do that. In fact, no analytics can do that. Predictive analytics can only forecast what might happen in the future because all predictive analytics are probabilistic in nature."
—Dr. Michael Wu
Use the descriptive analysis you gathered to look towards the future. This will help you better understand where your business is going and aid you in:
- Making more informed goals
- Deciding upcoming hires
- Knowing where to expand/pull back
In AgencyBloc, use the Sales Pipeline tool to set sales forecasts with timelines and values that help you predict when sales will close and how much new revenue they will generate. Likewise, you can set up expected commission calculations in AgencyBloc’s Commission Module. These calculations compare the actual incoming commission against your carrier agreement for that policy to find discrepancies and inaccuracies.
Source | AgencyBloc
So, it’s just looking at a bunch of data?
Yes and no.
Yes, you’re looking at a bunch of data, but it is much more than that. Data analysis is interpreting reason from the data. It is drawing conclusions to answer questions like:
- Where you’re going
- What that means for the future
- What you need to support the future
Data analysis turns your big data into smart data.
Smart data is the act of narrowing your data so you can make more informed decisions. To turn your big data into smart data, follow these five steps:
- Search: determine what you’re looking for and start exploring all sources
- Filter: narrow down the options to find the data you need
- Analyze: turn the data into real insights by taking time to understand it better
- Use the Data: make a plan and start applying what you learned to achieve your goals
- Data + Data: get input from other sources to create a well-rounded view to help you make the right choice
How insurance agencies can start analyzing their data
Data analysis is essential for a business to be successful. To get the most out of your data, you must:
- Have clean data that is orderly, organized, and usable
- Centralize your data to one location
- Maintain the data and regularly update it
- Be able to pull reports that are insightful, helpful, and useful
The cleaning is usually the most time-consuming part of the process. However, once your data is clean, it’s just day-to-day maintenance.
Then, you can pull the reports. It’s beneficial to house your book of business in a location that allows you to pull the reports you need. In AgencyBloc, you have four ways to analyze your data:
- Dashboard Analytics: Dashboard Analytics presents your data from the 10-000-foot viewpoint in easy-to-digest graphs, charts, and lists. Use the information as a jumping-off point to dive deeper into your data and know where to explore.
- Advanced & Saved Search: Run searches to answer the questions you have about your book of business. These searches can be saved and pinned to your AgencyBloc Dashboard to help you monitor that information and stay up-to-date.
- Standard Reports: Every AgencyBloc account comes equipped with pre-built reports that you can start using immediately to analyze your data.
- Custom Reports: Take the Standard Reports up a notch by building Custom Reports. The benefit of Custom Reports is that you can define precisely what information you want to see through a combination of filters and columns.
Save your Advanced Searches and Custom Reports in AgencyBloc to make running weekly, monthly, and yearly reports more efficient. You can even share the Custom Reports with other AgencyBloc users to make the process streamlined and smart.
Data points life and health insurance agencies should monitor
Data analysis is becoming more and more important for insurance agencies. To help you stay competitive, here are some areas we recommend you pay attention to:
- Cross-sell opportunities
- Policy breakdown and in-force saturation
- Adds & terms
- Client persona breakdown (great for segmentation)
- Lead source viability
- Policy product viability
- Sales forecasting and opportunity breakdown
- Closed won sales opportunities
- Commissions not received
- Agent productivity/policy and commission breakdowns
These are just the tip of the iceberg. Read our blog, The 5 Key Performance Indicators Life & Health Agencies Must Be Tracking, for more ideas.
Why you need to analyze your data
“Informed decision making is the foundation upon which successful businesses are built. As a decision-maker for your business, you need access to highly visual business intelligence tools that can help you make the right decisions quickly.”
Product Manager, Dundas Data Visualization
Having better insight into your book of business can mean the difference between surviving and thriving as a business. Use this opportunity to start putting together a game plan of what data you want to track, what you want to do with that data, and, most importantly, how you will monitor and analyze the data.
The right tools could make all of the difference for the health and wellbeing of your agency.
AgencyBloc is the #1 Agency Recommended Management System for life and health insurance agencies. Using AgencyBloc’s integrated tools like Dashboard Analytics, Advanced & Saved Search, Standard Reports, and Custom Reports, agencies can gain more insights about their business, make more informed decisions, and reach their goals.
When can I start?
Learn more about our data analysis features by talking to one of our industry experts. Schedule your personalized 1-on-1 demo to see how AgencyBloc could streamline your day-to-day process
Schedule My Demo
This blog was originally posted on August 29, 2017 and republished on October 13, 2021.