Return on Intelligence

As a result of its application of SAS (Cary, N.C.) business intelligence and data mining tools, Chubb Group of Insurance Companies (Warren, N.J.) has been able to qualify sales leads, target agents, pinpoint prospects, improve hit ratios and decrease its cost of acquisition, according to Jeff Hoffman, senior vice president, customer and market intelligence, Chubb & Son. Hoffman reported the results at the SAS conference "The Intelligence Imperative: From Compliance to Customer Value," in New York City last month.

Prior to applying SAS' tools to Chubb's four-phase sales approach - which focuses on lead qualification, prospect management, result analysis and lead refinement - the carrier was limited to the use of internal data, high costs of acquisition and a cross-sell/up-sell strategy that cast a wide net with little return, according to Hoffman.

It's All About the Data

Post implementation, he sang the praises of the technology but also stressed that quality data is the key to the insurance carrier's success. "I love predictive modeling tools, but they can't work alone," Hoffman explained. "The key is the data. You have to have accurate and meaningful data in order to support this technology."

Through a combination of both internal and external data, Chubb is able to "understand propensities of purchase through the use of comprehensive retention models that incorporate both old and new customer information," Hoffman explained. In addition to gauging how likely a particular customer or customer segment is to purchase products, Chubb is able to drill down to information that helps determine which groups are most likely to purchase which particular products, Hoffman added. SAS' tools are also handy when it comes to segmenting customers into groups so that they can be offered differentiated levels of service, Hoffman told the audience.

Lead Qualification

After the lead-qualification process determines the best potential policyholders, leads are passed on to agents. Agent activity is then tracked as part of the prospect-management process. Additionally, the carrier's application of business intelligence tools to enhance the lead-qualification process also includes analysis aimed at determining which agents are most effective at selling.

Accurate agent insight is also attained during Chubb's results-analysis phase. During this time, the insurance company tries to determine why a sale was or wasn't made and if pricing was a factor.

"A careful analysis of the reasons for a piece of business' closing or not closing can lead to future enhancements in the process," Hoffman told the audience.