Analytics or instinct. What do you use to make decisions about your commercial book?

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Having instincts is part of being human. Instinct is what keeps this generation and kept previous generations alive. Knowing when to put out the fire, run from the saber-tooth tiger and retreat from the battlefield, are decisions made on instinct. Instincts or gut feelings aren’t things you're born with, they’re learned.

Analytic_Instinct

Someone who’s been working in commercial lines for twenty-five years or more can trust their instincts when it comes to making decisions about the future of the brokerage. They’ve seen all the “next big thing” items, from fax machines to data processing to mobile apps and chatbots. Their instincts have been honed and developed over time.

When it comes to the decision-making process, relying on instincts alone makes sense when you have decades of experience to back your hunches. But, what if you don’t have decades of experience, or time is not on your side? Competition is fierce, mergers and acquisitions are swallowing up brokerages at a record pace, and one ‘gut feeling’ gone awry could have devastating consequences.

Fortunately, you now have the luxury of adding a fact-based, scientific approach when it comes to decision making. Analytics have long been associated with informed decisions, which reduces the likelihood of errors and increases your possibility of success.

Like all things that seem too good to be true, the proof analytics provides comes with a catch: What do you do if gut feelings override scientific fact? What if your gut says something should not be done, even when the data says otherwise?

Without making things overly complicated, the solution to this problem is blending analytics and instinct to arrive at the best possible decision.

Your analytics are only as good as the data you collect

You’ve heard me go on (and on) about garbage-in-garbage-out (GIGO) data in previous blogs. I cannot stress the importance of having clean, consistent data to produce accurate analytic reports and visualizations. Quality trumps quantity every time when is comes to utilizing your existing data.

To quote Charles Darwin, “False facts are highly injurious to the progress of science, for they often endure long; but false views, if supported by some evidence, do little harm, for everyone takes a salutary pleasure in proving their falseness; and when this is done, one path towards error is closed and the road to truth is often at the same time opened.”

When instinct needs validation

If you’re a brokerage principal or commercial lines manager that relies on instinct, you will most likely continue this way when it comes to making decisions about the future of your commercial book. However, there may be times when you’re at a crossroad and not sure how to go forward.

Our President, John Eastly said in a recent blog, “I turned to our analytics and investigated some of the other factors that I knew were involved. To my surprise, I discovered that I was wrong. The other factors I was so sure about didn't materialize under a closer inspection. The shock of proving my gut wrong was a great wake-up call for me. Trust your gut but rely on evidence to make your decisions.”

Our new Analytics module provides brokerage owners and managers powerful insights into their commercial business, enabling better and faster decisions made with confidence, based on evidence. Clear visuals like bar charts, geomaps and scatter plots allow your data to be spliced and manipulated to help pick out the signal from the noise.

If you’re a brokerage principal or commercial lines manager who trusts their gut, but needs to explore the possibilities Analytics can bring to their brokerage, contact us today for a demo.

Commercial Lines Analytics Overview

Policy Works introduces the first out-of-the-box suite of commercial lines analytics that incorporates policy and workflow data.

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Topics: Commercial_lines, data, analytics