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Technology
Underwriting 2.0
FirstBest Systems enhances agent/carrier electronic collaboration for commercial lines
By Nancy Doucette
If you told your kids (or grandkids) that when they spend time on Facebook they’re actually collaborating with their friends using Web 2.0, they’d give you “that look.” But that’s what social media applications like Facebook offer—interactive information sharing via the Internet.
What does interactive information sharing via the Internet have to do with insurance? It’s the basis for what FirstBest® Systems, Inc., is bringing to the marketplace with its Underwriting Management Systems™ (UMS)—a commercial lines electronic underwriting solution.
“It’s a collaborative business system,” explains Meira Primes, vice president of marketing for FirstBest. “So rather than making agents and underwriters follow a tightly scripted sequence of screens and pre-ordained content, an Underwriting 2.0 approach such as our UMS encourages genuine interactivity, a nonlinear workflow, as well as the ability to add your own content.”
Additionally, with an Underwriting 2.0 approach, producers, CSRs, and underwriters can all work together on a shared process—in real time. “We do this by providing a ‘virtual room’ where the carrier and the agent can work together on a piece of business,” she continues. “Let’s suppose that the agent has a couple of questions about sections of the carrier’s supplemental application. The agent and the underwriter can each access the system from wherever they are and have the application open at the same time. It eliminates the back and forth phone calls or e-mails.”
ACORD and IASA have applauded the efforts of FirstBest and honored them with the Innovative Implementation Award and the Technology Achievement Award, respectively.
That FirstBest has achieved these accolades in relatively short order shouldn’t come as a surprise, Primes notes. She explains that FirstBest was founded in 2006 with a mission to “transform the commercial lines electronic underwriting process.
“A lot of organizations have tried to apply technology to the underwriting process, but their efforts usually focus strictly on the carrier workflow or the agency workflow,” she points out. “FirstBest is focused on the commercial underwriting process in a more holistic way.”
Before the company was even formed, Primes says, the founders did extensive research. They were aware that the commercial lines underwriting process had too many manual, redundant procedures and too few effective tools for communication between underwriters and agents.
“Over a two-year period they did about 100 ‘magic wand’ exercises with representatives from large and small agencies, carriers, and industry consultants,” she says. “They would ask: ‘If you had a magic wand and you could create an underwriting or collaborative system that could do anything you wanted, what would it look like?’” (As a side note, Primes indicates that FirstBest still conducts these magic wand exercises with customers in an effort to continuously improve the product suite.)
The result is a fully managed offering that enables real time collaboration between agents and underwriters. “It allows complete visibility into any part of the submission process at any time,” Primes explains. Additionally, the FirstBest UMS collaboration tools include notes that flow directly into the online workspace and point to the item needing clarification. And the UMS can be customized and branded to a specific carrier.
FirstBest preconfigures the UMS, she says, so it includes the carrier’s risk appetite, along with the pre-qualification questions and supplemental questions. “There is clarity around what kind of business the carrier is looking for. The agent knows he’s not wasting his time by submitting a risk that will be declined.”
The product is sold to carriers, Primes says, but because it leverages ACORD XML standards to push and pull data from an agent’s desktop into the UMS, it benefits both carriers and agents by reducing duplicate entry.
Streamlining processes
FirstBest’s first customer was ICW Group Insurance Companies, a San Diego-based super regional representing a group of multiline property and casualty insurance companies providing workers compensation, surety, earthquake and personal and business auto insurance. According to Paul Zamora, vice president in charge of underwriting for the Workers Compensation Division, improved workflows couldn’t be implemented quickly enough.
Soon after he joined ICW Group in mid-2006, he began to familiarize himself with the carrier’s processes and technology, and how the carrier did business with its agents. He was discouraged to discover that his division was using four separate systems to log in the business, quote it, track it, and issue it. “We were extremely inefficient because none of the systems spoke to each other,” Zamora states. “We had to have a lot of labor to process our business. It was expensive and it was slow.”
But that was just the tip of the iceberg, he learned. In conversations with agents he learned that the carrier wasn’t even responding to many agents when they submitted quote requests.
He met with his staff and was dismayed to learn that about 40% of the workers comp quote requests that came in sat in stacks on people’s desks and were never looked at. “We definitely weren’t meeting the customer service standards that we’d set for ourselves,” Zamora admits.
After meeting with the president of ICW Group to discuss his findings, Zamora got the go-ahead to research solutions. It was a short list of vendors, he recalls, and FirstBest got the business, based on their ability to tailor the product, their pricing, and their ability to quickly implement the UMS, he says.
“The other vendors we looked at didn’t offer the level of configuration that FirstBest offered and they couldn’t get the system up and running as quickly either. Now that the system is in place, we can make changes ourselves using the business analyst workstation that is built in. Speed to market is within our control,” Zamora says.
ICW Group rebranded the FirstBest UMS as “Snap,” he explains. It handles workers comp and difference in conditions lines of business for the carrier. “Once an agency gets its logins and passwords for Snap, their staff can submit business using this agent portal. The agency has a home page within Snap that shows the status of all the agency’s workers comp or DIC policies with us. Snap will notify individual agency reps of any changes to these policies. Snap is a one-stop way for agencies to do business with ICW Group. It’s a huge competitive advantage when we talk with agents about ease of doing business,” Zamora notes.
He continues: “Too often carriers develop solutions that resolve their pain points but in the process, they create pain points for their agents. We didn’t want to create a system that passes the work along to the agent. We wanted a solution that would allow our agents as well as our staff to save time by reducing duplicate entry of data. FirstBest was very good at figuring out that solution.”
ICW Group surveyed its agents in a type of magic wand exercise. Zamora reports that the agents’ top priorities are addressed by Snap. He says agents indicated that they wanted easy access to their underwriter—better collaboration. Agents were also interested in real time inquiries—they didn’t want to deal with voice mail or e-mail. They also made fewer keystrokes a priority—they wanted a greater ease of doing business when it came to submissions.
Zamora estimates that about 80% of ICW Group’s agents use either an Applied or Vertafore agency management system. Once an agency rep has entered data into the agency management system he or she can use the “upload” feature and instantly bring the data into Snap via Transformation Station or TransactNOW®. “They don’t have to rekey the data,” he says. “And that data represents between 70% and 80% of what we need.”
FirstBest’s Meira Primes adds: “Not only do we support the upload capability of Applied Systems and Vertafore but FirstBest can also help agencies that have another management system or don’t have one at all. Our Application Forms Reader takes any ACORD form, jpg or PDF—basically any image—and translates it into XML and uploads it directly from the agent’s desktop into the carrier systems. It is part of our UMS but it is also available as a stand-alone product.”
She notes that as of late 2009, more than 3,500 agencies are using FirstBest products and more than $1.8 billion in premium is being processed annually through FirstBest Systems.
Vast improvement
ICW Group’s Zamora has been keeping a close eye on the numbers since the carrier launched Snap in January 2008. When we spoke with him, he had just completed a comparison of January through September 2008 with the same period for 2009. “The number of accounts we get through the door is up 93%, which confirms for us that agents do appreciate ease of doing business. Our quote count is up 80%, and our bind ratio is up 28%.”
Zamora sounds proudest when he notes: “Everything that comes in gets touched. Nothing just sits on a desk anymore.”
He says he’s also tracking how agencies are submitting their business. As of October 2009, about 70% of the business comes in via Snap rather than by fax or e-mail. “That’s a huge turnaround in terms of how we get our business,” Zamora says.
Eric Ehrenfeld, president of The Michael Ehrenfeld Company, headquartered in San Diego, says his agency has had a 35-year relationship with ICW Group. Since the predominantly commercial, 55-person agency began using Snap in late 2008, he says they’re sending more business to ICW Group, thanks to the improved workflow.
“About 40% of our business is in workers comp. Anything that reduces duplicate entry is going to be our workflow of first choice,” Ehrenfeld declares. “From a management standpoint, duplicate data entry is a waste of a quality CSR’s time. You don’t want to see someone who is highly trained and skilled in insurance keying in the same information over and over.”
The agency uses AMS 360 as its management system, he says. “We use TransactNOW to connect to Snap. The data is automatically moved from the ACORD app on our desktop to ICW Group. This decreases the data entry by as much as 90%. Sometimes there’s almost no additional information that we need to add.
“Using the real time interface capabilities of our agency management system and Snap, our CSRs can easily provide additional underwriting information such as loss runs or narratives,” he adds. “There is also a live chat—instant messaging—function within Snap so the CSR and underwriter can collaborate. IM is real time; e-mail isn’t,” Ehrenfeld observes.
Snap can also issue an alert to inform the CSR or the underwriter that there is a message waiting in the system and provides a link to the note which updates the account. “Perhaps the underwriter answered the CSR’s question. The link will pop you into the area where the underwriter has responded,” he explains.
Ehrenfeld notes that increasing numbers of carriers are offering commercial lines upload from the agency management system, which agencies certainly find helpful but, he concludes, “Snap has more collaboration capabilities than any other carrier solution I’ve seen.”
Talk to your carriers
According to an IVANS online survey conducted in January 2010, 93% of the responding property/casualty insurance carriers plan on increasing their investment in automation technologies to improve operational efficiency. The survey indicates that adoption of technologies that streamline transactions between insurance carriers and agents will continue to grow in 2010, as carriers look for ways to maintain profitability in a sluggish economy.
With that in mind, now might be a good time to sit down with one of your carrier representatives to discuss Underwriting 2.0 and how it can enhance ease of doing business. “Certainly price is king in a lot of situations,” says Meira Primes of FirstBest. “But if a carrier makes it easier for the agent to do business with them, it will help that carrier win in a tie.”
Cover Agents Weigh In On Carrier Portals
FirstBest Systems, Inc., created an online survey to learn how Rough Notes cover agencies use carrier portals for their commercial lines business. A brief summary of the results follows.
• The majority of agencies responding to the survey write more than
$10 million in premium. They ranked workers comp, commercial multi-peril and commercial auto as the top three most significant commercial lines in their agencies and see the greatest growth opportunity in workers comp in the next three years.
• More than three-fourths of the Rough Notes cover agencies responding say they regularly utilize five or more agent portals/carrier Web sites. They estimate that their commercial lines CSRs save between one hour and several hours each day by using real time carrier sites.
• For those carriers that aren’t seeing agencies using their portals, the respondents recommend that the carrier allow upload of data from the agency management system. Twenty-four percent say none of their commercial lines submission activity is done via upload, while 54% say that less than half of their commercial lines submissions are transacted using upload.
• When portals are not available, agents say they have to wait more than two weeks for quotes for workers comp, BOP or commercial auto.
• In terms of what the Rough Notes cover agencies value most in an agent portal, real time quoting topped the list. The ability to check a submission’s status in real time came in second, and instant messaging/real time communication with underwriters came in third.
• Real time collaboration between agents and carriers is not the norm, the responding cover agencies note. In fact, fewer than 25% of the carriers represented by Rough Notes cover agencies offer visibility/collaboration into the commercial submission process.
• Half of the agents responding say while they don’t currently use an agent-carrier exchange, they would be interested in one in addition to carrier portals. Eleven percent indicate they are not interested in carrier portals but would be interested solely in an agent-carrier exchange. |
For more information:
FirstBest Systems, Inc.
Web site: www.firstbest.com
Editor's note: At press time FirstBest Systems, Inc., announced that their technology solution has been selected to power the LexisNexis-CIAB Exchange which will start pilot programs for selected lines later this year. The Council of Insurance Agents & Brokers established a partnership with LexisNexis in late 2009 to create an insurance exchange that would reduce duplicate entry and costs for the independent agency distribution system. |
