EASIER, FASTER COMP FOR SMALL BUSINESSES
Insurtech platform speeds processing, takes the pain out of writing this tough class
By Elisabeth Boone, CPCU
Great minds think alike—especially when it comes to SolePro co-founders Steve Love and Jeff Valentine. While brainstorming a solution to the problem of how to make a profit writing workers compensation for small business owners, the two men conceived the idea of creating a streamlined insurtech platform that would bring speed, efficiency, and flexibility to the tedious process of writing this traditionally unprofitable business.
Their idea crystallized into the platform that today is known as SolePro, and its founders and partners, all born innovators, are hard at work refining and expanding their creation.
Steve Love is president of SolePro, and Jeff Valentine is vice president of sales and partnerships. Over the course of 35 years in the industry, Love has launched several agencies, brokerages, self-insurance groups and captives, and specialty programs. Valentine’s career spans 25 years and encompasses experience with carriers in employee benefits sales management. He owns an employee benefits agency in Virginia.
Another key member of the SolePro executive team is Henry, a yellow Lab Cockapoo who proudly bears the title of Chief of Barketing. True to his name, he enjoys barking at the mailman; his other favorite pursuits are lounging around the office and following Steve wherever he goes.
Problem and solution
It’s common knowledge that agentsand carriers alike cringe at the prospect of writing small business workers comp. Low premiums, low commissions,
and high-touch processes combine to make this class both unattractive and unprofitable for agents. Low premiums also are a turnoff for carriers, as is the likelihood that the prospective insured has no work experience or prior coverage history.
Enter the SolePro solution.
SolePro is a workers comp insurtech platform for agents to apply, sign, bind, pay, renew, and manage policies with the click of a button.
Love and Valentine’s idea was to automate the quoting, underwriting, and policy issuance functions that are typically involved in insuring small business owners. “We have the ability to write these little guys without midterm audits, without their thinking that their coverage has been bound in the assigned risk plan when it hasn’t, and without their having to change carriers every two years in the plan,” says Love. “We’ve created a system that solves a lot of problems for agents and their small business clients.”
Using the system that SolePro has built, Love continues, “agents can write this business without clients coming into their office and without spending a lot of time on each application.”
For example, he says, “We have a trucker who has 28 independent contractors. Finding workers comp coverage is a nightmare for them, and they often end up in the assigned risk plan. We run them through our system and instantly solve their problems, and from that point the owner can manage the process himself.”
Menu of products
SolePro’s most popular plan is a proprietary program called Solo X. Designed for business owners who have no employees, day laborers, or subcontractors, Solo X is a minimum premium workers comp plan with a bonus accident policy. The insured is excluded from comp coverage, but the accident policy provides 24/7 coverage on or off the job.
Another product, Solo I, is also for owners who have no employees but allows the insured to be included in coverage. Both Solo X and Solo I are designed to be attractive alternatives to the assigned risk plan.
Sole Pro’s third product, Plus, is designed for businesses with employees that need coverage but fall below the typical minimum premium requirements that many carriers have in place. This makes it hard for these businesses to find appropriate coverage, and SolePro closes that gap.
SolePro’s products, Valentine asserts, are the best alternative on the market to the assigned risk plan. “We are less expensive, easier to use, offer more coverage, and have no carrier turnover,” he explains. “We have partnered with several top workers comp carriers throughout the country.”
With SolePro, he adds, insureds get coverage with “A” rated standard carriers, and agents don’t have to rewrite policies every few years.
“Workers comp typically involves an underwriter reviewing an application and either approving or declining coverage,” Valentine explains. “If the application is accepted, the policy is bound and then goes to the insured for payment. As Steve says, agents don’t want to handle small business owners because it’s a hassle and the premium and commission are low. It’s not worth their time and effort; and if anything goes wrong, the insured will walk away and go somewhere else.
“When we first started SolePro, every step of the process was paper based,” Valentine continues. “Hard to believe, but we did a lot of faxing in addition to using email. It got to be more trouble than it was worth, and when Jade and Hannah Sullivan came on board, they told us we were not going to be able to do this with paper.” Jade is partner and head of innovation at SolePro; Hannah is vice president, business development.
“So we started to build a system to collect and process the data, and a process that used to take days or weeks now can be completed in as little as 30 minutes,” Valentine notes.
Saving time by streamlining the process is at the heart of the SolePro system, Valentine notes. “We want to give agents and their small business clients something they can’t get anywhere else. We want to give them something that makes sense in terms of speed of processing.”
Hannah and Jade also wanted to give the SolePro audience something less tangible but equally valuable: simplicity.
“Jade and I come from a marketing and design background,” Hannah Sullivan says, “so we weren’t as familiar with insurance jargon. In designing the SolePro platform, we used straightforward language and told users what they needed to know without bombarding them with extraneous information.”
“It has taken quite some time to create a platform that fully functions in the best way possible for us, SolePro, and the agents who use our site,” adds Jade Sullivan. “Finding the right developers really helped to make our dream a reality. Easy small comp? Instant quotes? No lag time from start to finish? What’s not to love?”
It’s well known that in recent years the overall combined ratio for workers comp has been below 90%, thanks in large part to advances in technology that are reducing accident frequency and severity. As the broader property/casualty market begins to harden, are rates also starting to rise for comp?
“In 2019, Virginia took a 10% decrease, and this year it filed for minus 20.2%,” Love responds. “On the other hand, some states are raising rates. It’s like a yo-yo. Some states have decreased rates by as much as 50%. In these states it’s impossible for insurers to make money. While rates generally are continuing to go down, insurers are starting to report higher losses. We know, for instance, that in Virginia the combined ratio is over 100% even though the state has filed for a 20.2% rate decrease. The problem is that rate filings invariably lag underwriting results.”
When premiums are as low as they are with small business workers comp, profitability depends on volume. Thanks to its streamlined platform, SolePro can handle high volumes of submissions in a short amount of time and therefore can make a profit on what historically has been an unprofitable segment of the workers comp market.
That said, the SolePro team scrutinizes each prospective client’s operation before submitting the risk to its pool of insurers.
“In regard to Solo X and Solo I, we need to make sure we understand each applicant’s situation with respect to the use of day laborers and subcontractors,” Love explains. “We need our agents and their insureds to give us accurate information. That’s the key to everything.”
Hannah interjects: “After all, time is money. The more you have to touch a piece of business, the less money you’re making. We created this system to streamline and automate as much of the process as possible. The agent can make more money, be more efficient, and have more time to write business. For us, not having to perform all of the manual work in the background gives us more time and energy as well as more space to write additional business with agents and MGAs, plus the time to develop new partnerships with larger MGAs and other carriers.”
When Love and Valentine consulted with agents who were using their system to get their thoughts on how the platform was functioning, they were told:
“It’s fine to develop a system to speed the processing of this business, but our biggest stumbling block is handling renewals. To collect all this paperwork at renewal time, I have to track down my insured. That’s not the best use of my time because in the universe of one-person operations, how often do they renew instead of going elsewhere or letting their insurance lapse?”
Responding to this concern, Love says, “We created a simple automated renewal system that starts notifying agents 90 days out that they have a renewal coming up. The system gives them everything they need: the quote and all the documents they need to sign. They sign the documents, and as long as they pay the premium before the renewal date, the coverage is continued.”
Based on its success in stream-lining the small business workers comp workflow, SolePro is keenly focused on the future. It has begun to offer general liability and BOP products and is in the process of integrating with a carrier to provide instant quotes for these lines of business.
As a guide for its agents and insurers, SolePro has created a “Success List” of the small business classifications it has had success in underwriting.
The Success List should be considered dynamic rather than static in nature, Valentine explains.
“If an agent wants us to consider adding a classification, it’s as simple as picking up the phone or shooting us an email,” Valentine says. “We can usually get back with the agent on the same business day.” Once the classification has been approved, he continues, “in less than five minutes we can add the classification, add a premium, add a state—whatever we need to do—and push that out to the site.”
SolePro is gaining wide recognition for its efficient, user-friendly platform, to the point that a major Midwestern trucking MGA wants to customize the SolePro platform with its own products and carriers.
“This is a key benefit of SolePro,” Hannah asserts. “We’ve developed custom and proprietary products with our carriers that can’t be accessed anywhere else. We can custom build a platform that would be co-branded with the MGA. When it comes to speed, efficiency, and flexibility, we can do it all.”
That’s a wrap. Henry, can I get a bark?
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