Today, businesses of all types are relying more on customer data, but it’s hard to think of any companies more reliant on customer data than insurance firms. Just about every business decision they make is based on information.
Contact data collected across multiple channels aids in rate quoting, risk analysis, marketing campaigns, fraud detection and overall business intelligence. Apart from these obvious business advantages of having good-quality data, there are real regulatory and compliance reasons for ensuring that management information can be produced in a timely manner and with a high level of data accuracy. SYSC demands that you implement good controls over all your systems: any lack of evidence that this is the case can lead to extreme measures being imposed by the FCA.
But in order to do this, insurers must have complete confidence in the data they own. Here’s our top tips for improving data quality.
1) Get your priorities right
Your first step is conducting a data quality assessment to help you recognise the severity of data quality issues. A recent Gartner Group report estimates that 50 per cent of businesses undertaking a CRM strategy are unaware of significant data quality problems in their environments. Most companies make the assumption that their data quality is fine before even looking at it.
If your current customer database is in a bit of a state, there may be too much to tackle all at once. However, not all data is critical, so it really pays to tighten the net around the data that has the biggest impact on the business and prioritise those first.
2) Identify data entry points
One of the very first things to ask yourself is how the data is entered in the first place. Mistakes in the data entered can cause detrimental problems down the line, impacting the departments that rely on policyholder information like underwriting, customer services and claims.
If that same piece of data is entered differently twice, then the two opposing records result in wasted efficiency, irritated prospects and confused sales staff.
Verification software can be implemented in various channels such as your website, or CRM system to prevent inaccurate information, like poor address and email contact details, from entering your database. Chartered accountants, Sable Group, for example, have reported improved data quality after using international address validation when entering customer details and as a result have been able to reduce rejection rate by 20% when submitting data to the Department for Work and Pensions. By implementing data validation at the point of capture you can also improve risk assessment, prevent premium leakage and enhance the policyholder experience.
3) Clean out the dead wood
No matter how good the systems and processes you put in place to capture data across all customer touch points, it is essential that you regularly clean your database.
Address data is prone to get out-of-date particularly quickly, with studies typically indicating consumer data degradation is around 10-15% and business data by 30-40% on average every year. By extension, if your database is a couple of years old, an overwhelming 60% of it is likely to be out of date, and two thirds of your budget could be going to waste.
Removing latent, dormant and incorrect details can save you time and money when it comes to improving the efficacy of your sales team. Without cleaning out the dead wood, your sales team is wasting time chasing useless prospects – just because they appear on the sales database.The simple process of keeping your mailing lists up-to-date with regular data hygiene will make your marketing budget go much further.
4) Cross reference your data
Cleansing software is available that can cross-reference your contact records against recognised datasets and put it in order again. Screening your marketing list against files such as The Bereavement Register (TBR) will remove any deceased records and avoid causing further distress to bereaved relatives and help you to protect your brand. While the National Change of Address file (NCOA®) gives you intelligence from Royal Mail’s Redirection Service, the Just Built file provides a monthly-updated list of new properties enabling you to reconnect with lost customers by providing you with their new address. By failing to take advantage of these data sets, you could be operating on out of date information, turning thousands of potential customers away.
5) Give options
If you rely on your customers to enter their own data, you should also ensure that there is a straightforward way for them to easily change and update their own data. This frees up the time your sales team has to follow up leads by enabling the client to keep your database records up to date and accurate for you.
The bottom line
Improving data quality management doesn’t necessarily mean massive investments in IT and organisational changes. Even small tuning-type adjustments to the existing architecture can bring quick and significant benefits. By turning data into reliable information, improved data quality can support operational, tactical and strategic decisions that can make a big different to insurers’ performance, increase efficiency and help create a single customer view.