The power of knowledge: Insurance competitive analysis best practices and tips

Competitive analysis in the insurance market space helps to identify industry trends and understand the market. It also provides insights on how your services can work to stay ahead of your competitors. It enables you to develop a strategy based on a strong understanding of your competitors and how they reciprocate to emerging customer requirements.

How competitive analysis stands as the key to success in the insurance industry space

The insurance industry is transforming significantly on the back of underlying drivers of change. Without competitive analysis, it is difficult to assess the size, strengths and weaknesses of any market. Insurance analytics is essentially used for controlling risks in underwriting, pricing, rating, claims, marketing, and reserving in the insurance sector. 

Hugh Kenyon, Personal Lines Pricing Director at LV, once said, “Insurance has been based around analytics for decades but the key change we’re seeing is from the pricing and actuarial into customer management, experience, and marketing activities.”

The global insurance analytics market size was valued at USD 7.91B in 2019. It is estimated to reach USD 22.45B by 2027, growing at a CAGR of 14.2% from 2020-2027. These figures are a testament to its importance.

Moreover, technological advancements such as artificial intelligence and machine learning are aiding the solutions. As per a study by Accenture, using AI in the financial sector can lead to a 31% increase in profitability rates by 2035. The global insurance industry is embracing digital technologies like never before. Competitive analysis has become even more important as insurance companies are trying to battle challenges like catastrophes, amplified risks, uncertain economic environments, etc. 

As per IBM, insurance companies that have already implemented analytical solutions outperformed the competition by 76%. It is pivotal for insurance organizations to use analytics to understand the customer base. They must also gauge their priorities along with organizational exposure to risks. 

Over the years, insurers have found that insights from third-party information along with current first-party data enable them to get a better view of how great the risks are to the businesses and how to effectively mitigate them. In fact, the COVID-19 pandemic has had a huge impact on the insurance analytics market. This is due to a surge in the use and adoption of advanced technologies offering digitized services globally. This has led to insurers adopting and implementing insurance analytics solutions across the world. 

Challenges of analytics implementation 

Now let us talk about the challenges related to analytics implementation in the insurance space. There are certain barriers when it comes to the adopting massive chunks of data for competitive analysis. There is no singular way that the analysis of the data and its impact can be automated. It is also difficult to implement this huge data pool that originates from a diverse set of sources.

Moreover, there is a requirement for talented data scientists who can conduct effective analytics.

Key tips on getting started with effective competitive analysis

Find your competitors

The first step is to find out two types of competitors, direct and indirect. The direct competitors have expertise in the same type of insurance and work with similar agents. On the other hand, indirect competitors are those whose work doesn’t line up exactly, which means that their target audience, service, and specialization might differ. It is a mandate to identify both your direct and indirect competitors to identify new market opportunities.

Assess their online marketing strategies

Once you have mapped your direct and indirect competitors, you should take a look at their online presence which includes social media handles, newsletters, websites, news articles, and more. You need to take cues from their websites and how they appeal to the target audience. You also need to check the trending topics on social media, which posts get the maximum amount of interaction, the selling point of the insurance companies, customer service ratings, their offerings, etc. 

This will help you understand how you can differentiate yourself from them. You can dig deeper by signing up for your competitor company’s marketing lists. You need to go through their white paper, newsletters, blogs, and videos to understand where they stand in the insurance industry and the way they communicate with their target audience.

Related reading: The power of market research in Insurance: how it can help companies stay ahead

Customer interactions with the companies

Once you have found out the probable competitor companies and assessed their online marketing, find out the reactions of the audience. Check if the companies are customer-focused and take their opinions seriously. Both positive and negative interactions can be very informative.

Identify the market gaps in the insurance ecosystem

You need to assess the areas in which you can act as a bridge. Invade the areas and opportunities that are under-served. If there are unmet customer needs, you must tap into the same. A thorough competitive analysis will provide you with insights into your position in the market.

Despite the challenges, competitive analysis is mandatory in the insurance market space. It helps in benchmarking and finding out the gaps in the market so that you can cater to the same. Companies will continue using insurance analytics to reduce expenses, optimize customer relationship processes and use predictive analytics in insurance models in order to create reports across product lines. With rising competition in the insurance ecosystem, demand for analytics solutions will continue to rise to sustain the competition in the global market.

By analyzing the market landscape and understanding your competitors’ strategies, you can develop a winning strategy that sets you apart. Our team of experienced professionals can guide you in assessing your direct and indirect competitors, assessing their online marketing strategies, and identifying market gaps that present opportunities for growth. To know how our comprehensive competitive analysis solutions can elevate your business in the rapidly evolving insurance space, contact us.

Based on insights by Srijita Guha, Senior Research Analyst, Research and Information, BFSI.