Annuity carriers have a massive opportunity to leverage data and analytics to gain strategic advantage in today’s competitive landscape. Technology leaders in the annuity business are well aware of the operational and regulatory complexities in this industry. Despite these obligations, annuity CIOs should seek to invest in data infrastructure, artificial intelligence (AI), and analytics to unlock growth for their annuity businesses.
Consolidate Data to Understand Customers
Data is the biggest limitation for most annuity carriers. Many carriers still use legacy systems that silo customer data across products and channels. By consolidating data platforms and building unified customer profiles, annuity carriers can gain invaluable insights into changing customer demographics, needs, and behaviors. Doing so allows them to identify new customer segments, tailor products and messaging, and predict lifetime value.
Analytics to Model Risk and Profitability
Sophisticated analytics around risk modeling, financial modeling, and actuarial processes can greatly benefit annuity carriers. Predictive analytics can allow companies to model policyholder behavior to forecast surrender rates. They can use machine learning to build propensity-to-buy models across the customer life cycle. Enhanced net-asset-value modeling provides a dynamic view of profitability.
AI for Efficiency and Personalization
AI has vast potential for improving efficiency. Chatbots and robo-advisors can reduce the cost of customer acquisition and servicing while also providing personalized recommendations. Decisioning for back-office tasks like underwriting and claims processing can be automated using machine learning. Language processing allows mining insights from unstructured data like call center notes and emails.
The Way Forward
Annuity carriers are sitting on decades of customer data; they now have the technology stack to put it to work. Cloud platforms provide the storage and computing for advanced analytics, while technologies like AI and machine learning unlock embedded insights. Companies that leverage data and analytics will gain strategic advantages, and technology leaders have the opportunity to guide their companies into this data-driven future.
For more on the business and technology trends facing annuity providers, read my report on the topic or reach out to me directly with any questions you have.
