By John Maes
InsuranceNoodle executives are (left to right, seated) Kathryn S. Emmerson, managing director; Don Urbanciz, chief executive officer; (standing) Richard E. Madock, vice chairman and co-founder, and Robert M. Rudy, chairman and co-founder.
InsuranceNoodle is like the new kid on the block who is out to make friends. The Chicago-based firm (www.insurancenoodle.com) is quickly establishing itself as one of the premier mechanisms for placement of small business owner's coverages, a market that Noodle executives say has long been overlooked and underserved.
Noodle is currently operational in 38 states as a market for workers comp, businessowners, commercial auto and umbrella liability for small shop owners, professional service firms, wholesalers, light manufacturing businesses, trade contractors, and self-employeds. And it's gaining favor among insurance agents. Hundreds of independent agents now have relationships for placing business through Noodle. Agents receive a share of commission in return for placing an account.
Noodle considers itself ideal for agents who serve the small and mid-sized commercial lines accounts but who don't have the time to cultivate the small business sector. Personal lines agents who'd like to do some commercial lines but who don't have the expertise can use Noodle as well, says Robert Rudy, chairman and co-founder. "Our objective is to assist agents in placing small commercial risks with the major carriers in the most streamlined way possible, without agents having to meet insurer volume requirements," says Rudy.
Larger agencies can also benefit from using InsuranceNoodle, says Don Urbanciz, CEO. With its focus on small business insurance needs, Noodle has developed expertise and system efficiencies that would be too costly and time-consuming for agents to grow on their own. "Agents find themselves, if not losing money, making very little margin because they use the same business processes to handle this business as they do with the larger risks," Urbanciz says. "InsuranceNoodle offers a technology-enabled way of handling it.
"The value proposition in working with us is that agencies now can have the depth and breadth of five or six markets for placing a piece of business," explains Urbanciz. "Whereas on their own, the agent might not be able to access as many markets."
How does InsuranceNoodle work? The firm uses a proprietary software setup and electronic linkages with six carriers: AIG, CNA Surety, Kemper, St. Paul, The Hartford and Zurich to search for coverage availability in a given area.
Once the agent enters basic underwriting information, the system searches insurer appetites according to ZIP codes and Standard Industry Classification (SIC) codes. Noodle strives to return a quote or declination within 24 hours. "We provide a single point of entry for underwriting data and routing the risk to the appropriate market," according to Rudy. "There's no capital investment for the agent, and it's all browser based."
How do they manage such quick turnaround on quotes? "We've re-engineered the whole application process," explains Rudy. "We ask only relevant underwriting questions of carriers that have an appetite for the particular risk." So elaborate is the software logic that it parcels out individual risks in search of insurance company takers, he says. An InsuranceNoodle proposal often returns with one carrier taking the work comp risk, another the businessowners portion, with still another accepting the auto risk. "Each risk is routed to the appropriate market," says Rudy.
Returned quotes, delivered over the Internet, include a summary of coverage, pricing and bullet points of marketing information from the carriers about product features, according to Rudy. Coverage can be bound online with the agent as a co-broker (receiving a portion of the commission) and InsuranceNoodle as agent of record. The agent, however, still closes the sale, services the account and "owns the relationship."
With Noodle, the need for an agent to upload submissions separately to multiple carriers is eliminated, Urbanciz notes. "It's frustrating to spend a lot of time uploading all this information. With us, the agent does it once and we get back to them within 24 hours, telling them what carriers will write what lines," he says.
Noodle executives also point to their 24-person customer service department (which includes licensed insurance agents) as one of its strengths. Customer service representatives assemble quotes but are also available from 7 a.m. to 11 p.m. central time (via phone or online chat), seven days per week for questions, policy endorsements or information. "We want the process to be as seamless as possible," says Rudy.
Ideally, the entire transaction should take place online. Only minimal contact between Noodle reps and the agent should be necessary. But if needed, the representatives are there to "act as advocates for the agents and to help push things through with the carriers," such as when clarification of an underwriting question is necessary, Rudy explains. A help desk has also been set up to assist agents with technical or operating questions, he says.
Urbanciz says InsuranceNoodle wants to forge solid links with agents.
Ultimately, over 80% of revenues are expected to come from agent-generated business. Other business will be generated from small business owners utilizing the site directly or through partnerships with financial institutions looking to expand into insurance or professional associations interested in offering coverage programs to members.
"We want to partner with someone who already has a relationship with the customer," Urbanciz says. "Our partners will always be the insurance advisors who have a relationship with the end policyholder. We want to help enhance the relationship that already exists with leading-edge products and service."
A team of relationship managers is in place to help Noodle--affiliated agents generate more business from the small business sector, says Rick Madock, president and co-founder. The team is "proactive" in regularly feeding agents information about small business insurance issues, new insurance products and strategies geared toward cultivating that market. "We're supporting behavior that creates sales and helps agents grow their businesses," Madock says.
Off and running
According to Ann Mickey, an agency principal in New Cumberland, Pennsylvania, the Noodle has been a "godsend" in helping find coverage for work comp, auto and liability lines in Pennsylvania where widespread commercial lines cancellations have been taking place. "The market has turned hard here and a lot of classes of business are not being renewed," she says.
Consequently, the agency has either had to scramble for other coverage or take its chances with a two-and-a-half month waiting list for insurance through the Pennsylvania Workers Compensation Fund. Placing coverage through InsuranceNoodle has eliminated that risky waiting period, she says. "We've been using InsuranceNoodle to write these people on an individual basis," says Mickey. She has made about 165 submissions to InsuranceNoodle since December for various coverages. Quotes have come back on 75%, she says.
Currently, Mickey is marketing the availability of small business coverage through InsuranceNoodle in a monthly newsletter and fax program to associations of carpenters and contractors.
She likes the way Noodle allows her to keep track of her accounts online. Record keeping, including tracking her submissions, policies written, and dollar value, along with commissions due and paid can be done on the Web, she says. "Their hours of access are also a nice addition," she says. "It's nice to know that I have someone I can access at 6:30 p.m. when most insurance offices close at 5 p.m. and I'm in a bind and need something in a hurry."
For Rob Macoviak, general manager of Oyer Insurance, a $3 million agency in Boynton Beach, Florida, InsuranceNoodle helped provide a quick entrance to the commercial lines business in the tough Florida market without the hassles of carrier affiliation and volume requirements. "We can get five or six quotes, all with major carriers and it's all in one place," he says.
Macoviak hopes to eventually place up to 50% of his business through the Noodle. "All we have to do is push a button that says 'bind coverage' and it's pretty cut and dried," he notes. "Everything is direct billed so we don't have to worry about that, and we get into markets that we wouldn't be able to reach normally."
Macoviak also likes the way he can remain a "hands-on" agent and service the accounts placed through Noodle. He handles all policy endorsements and insurance counseling of Noodle accounts. "We don't like just giving someone an 800 number because otherwise you're not being an agent, you're just being an order taker," Macoviak says.
At South Florida Commercial Insurance Planners, Angel Castro, president, uses quotes provided by Noodle to "balance out" portfolio presentations to clients. Florida property insurance rates are currently sky-high and coverage is only available in the excess/surplus markets. Consequently, when Noodle quotes for liability lines come in lower than those of his other carriers do, the higher property insurance rate can be partially offset, he says. "When you balance that better rate for liability from the Noodle with what other carriers charge, and with the higher surplus market rate for property, my overall presentation is a better plan," Castro says. "If I can come to them with a better rate for liability it helps when I go to close the account."
The author
John Maes is a Chicago-area free-lance writer.
For more information
Contact: Kathy Emmerson, Managing Director
Phone: (312) 372 1668
E-mail: kathy@insurancenoodle.com
Web site: www.insurancenoodle.com