Why weather should be on the radar of insurance CMOs

If you’re an insurer, you know that those in your industry live and die by their ability to predict and minimize risk. From the weather to driving behavior, insurance companies must take into account a plethora of everyday (and less than everyday) events in order to succeed. Not even insurance companies have access to a crystal ball, but advancements in data analytics have helped insurance companies ever more accurately predict adverse incidents, allowing them to mitigate threats as they arise.

According to Cloudy with a Chance of Mishap, an IBM Institute for Business Value (IBV) study conducted in association with The Weather Company:

As availability and predictive capabilities of weather forecasting continue to grow, so do the opportunities for insurance companies to apply weather data to improve customer engagement, operations and risk management …. Leading companies take a different approach: they combine weather information with other data sources to anticipate future events and incorporate insights into daily operations.

By using weather alerting, insurers can harness weather data in their operations, not only helping prevent claims but also boosting policyholder retention. Indeed, according to a Bain & Company study, policyholder retention is a paramount concern for the insurance chief marketing officer (CMO) in a stagnant to slow-growing insurance market—only one percent for automotive policies and four percent for homeowner insurance.

By using weather alerts to warn policyholders about impending weather perils that might affect their insured property—whether home, automobile, boat or recreational vehicle—insurance providers can create high-value touch points that go far beyond the normal bills and birthday messages they might normally send to policyholders. Not surprisingly, a study conducted by The Weather Company with a major insurance carrier found the following:

  • 97 percent of policyholders valued their weather alerts.
  • 52 percent of recipients took action to protect their property.