As you know, the insurance industry is one of the industries that rely heavily on in-depth information on potential clients to make wise decisions. They need all the insights they can get to ensure they make the right choices about who to insure and who is too risky to insure. Furthermore, the insurance industry is super competitive, and as you’re well aware, knowledge is key to gaining a competitive edge regardless of your field of business.
Over the past couple of decades, insurance agencies have greatly increased their ability to read customers, individualize their products and plan types, and make better business decisions than ever before. So, what’s behind the evolution of health insurance companies across the United States? The answer is only two words long: business intelligence. Continue reading to learn how the top healthcare providers in the country are using business intelligence tools to provide optimal service to their clients.
What exactly is business intelligence?
If you’re not a data scientist, you’re probably questioning, “What is business intelligence?” The term business intelligence may sound self-explanatory, but there’s more to the phrase than you might think. Business intelligence is a set of techniques and best practices used to get actionable insights into business operations, markets, customer behavior, and much more.
Business Intelligence (BI) tools are used to perform a myriad of tasks including data virtualization, data visualization, and predictive analytics to name a few. Business analytics has totally revolutionized the ways in which health insurance companies create health plans for their customers. Data analysis might not be a new phenomenon, but many of the ways business users are applying data analytics from various data sources are. In the next section, we’ll cover how BI systems are used to optimize everything from various business processes from making business decisions to using machine learning to create targeted marketing campaigns.
How do insurance companies use business intelligence?
As you know, whenever you put in an application for private health insurance coverage, they use historical data to determine the price of your health insurance plan. However, business analytics allows companies to take their use of raw data to previously unimaginable heights.
For instance, by using BI tools like predictive analytics, business intelligence systems can actually predict how likely a patient is to get sick based on historical data regarding their health. Furthermore, when companies make better decisions on who to insure and how much their monthly premiums should be, they’re able to increase their bottom line without having to raise premiums across the board.
The fact of the matter is that everyone has their own unique health situations. By applying descriptive analytics and performance metrics to the health insurance markets, they’re able to get actionable information into how various illnesses affect different demographics and more. They also use analytics to compare health insurance policies with their competitors to give themselves a competitive advantage. With that kind of data, health insurance companies can design their health plans based on the needs of consumers.
Furthermore, healthcare providers even apply analytical processing to determine what medical practices they want in their provider network and which prescription drugs they’ll cover. As you can see, BI solutions help insurers get valuable insights by using advanced analytics to aid in making predictions and better decisions.
Does using BI tools make insurance more affordable?
One of the great things about data analytics is that it makes health insurance more affordable for customers and more lucrative for insurers by helping insurance companies to rid their business processes of inefficiencies. By using business intelligence solutions to enhance their business performance and business decisions, they’re able to offer bigger and better discounts to their customers while simultaneously increasing their bottom line.
As you can see, health insurers rely heavily on business intelligence tools to make smarter decisions, provide better medical care, and cut out-of-pocket costs for customers. If your insurance company is looking for ways to gain a competitive edge, look to the analytics.