Introduction:
Typically when a carrier wants to improve the agents’ experience, the automatic go-to response is to reduce the number of submission questions or pre-fill the submission forms. However, just reducing the data input does not necessarily improve the agents’ experience.
In this case study, we will discuss how a leading commercial carrier took a different approach to improving the agents’ experience by focusing on reducing the processing time from days to minutes and improving the decision-making quality, turnover time and number of interactions between agents and underwriters.
This leading property and casualty carrier has over 30 years of experience providing commercial and personal insurance products to businesses throughout the United States.
Its primary lines of coverage include workers’ compensation, business owners’ policies (BOP), commercial auto, commercial umbrella, professional liability and homeowners. Its products are available through contracted independent agents and brokers.
The Situation
As part of the carrier’s ongoing efforts to enhance its strong relationships with agents and provide the best fit for its customers’ needs, the carrier was looking for ways to improve the agents’ experience by streamlining the submission-to-quote process. In order to do so, the carrier had to dramatically reduce the time from submission to quote by eliminating the manual underwriters’ work on potentially low-risk submissions. This initiative would allow the carrier to optimize its underwriting process, thus generating better and faster quotes for the agent.
The insights provided by Planck allowed the carrier’s underwriters to focus on quoting and underwriting the right risks, rather than spending time finding, gathering, cleansing and organizing data. This reduced and simplified the submission process, resulting in a better user experience for the agents.
By implementing accurate third-party data, the carrier was able to achieve a better agent experience as well as increase gross written premiums, reduce underwriting expense ratios and overall loss ratios.
The Challenges
The carrier’s agents had been complaining that the submission process was often too complicated and time consuming. The underwriters would only respond after hours, or even days, while spending precious time manually validating the information. This could also affect the business owner and lead them to turn to a competing carrier who could provide an offer more quickly.
The reasons behind such delays are often related to issues experienced by the underwriter in the data validation process, as described below.
The submission process:
- The agent fills in a policy application and the request gets added to the underwriting queue on a first-come-first-serve basis. It could take up to six hours from submission to underwriting review.
- Using the information filled in by the agent, the carrier’s underwriter opens the submission on their system. The majority of requests get processed within a few hours; however, there are cases when requests reach an underwriter only after two days or possibly more. If another agent has already begun a submission for the same business, meaning it’s already an active submission, the new request needs to be closed.
- The underwriter then spends up to 25 minutes or more on each submission in order to validate the information and better estimate the risk. This is due to two main reasons:
- Over 20% of businesses have no web presence, and the underwriter cannot approve or quote them without getting additional information from the agent. If data is missing, the underwriter needs to request additional information from the agent, which can take up to a couple of weeks. These cases often end without a policy issuance, with precious time having already been invested by the underwriter.
- Some of the data elements that the underwriter is required to validate cannot be found in public data sources, and the underwriter is required to estimate them.
- Finally, the underwriter decides whether to approve or decline the submission. In the case of approval, they will send a packaged quote to the agent. If declined, the underwriter will send a form-based email to the agent, explaining the reason/s for the rejection.
In addition, the overall quoting conversion rate of 14% (from a new submission opportunity to a quote) was relatively low.
In terms of underwriting accuracy, 5% of the approved submissions should have been declined due to one or more unacceptable risks, while 8% of the declined submissions should have been approved, if the submission data had been evaluated correctly.
Each of the underwriting team members typically reviews over 250 submissions a month and spends an average of 25 minutes for each initial review and validation of a new submission.
Furthermore, 38% of the requests required additional information from the agent, which decreased the conversion rate.
The Solution
After evaluating various data providers for insights on small and medium businesses, the carrier chose to work with Planck thanks to its high coverage and accuracy (over 90% in both parameters) as well as Planck’s ability to configure insights that are valuable to the carrier’s specific models. Part of these insights include risk related factors that are not available “as-is” in any other data source, and can be produced at a very high accuracy due to Planck’s machine-learning algorithms.
Planck’s artificial intelligence creates accurate underwriting insights based on all data available online and offline, through its proprietary technology. With only a business name and an address as inputs, insurers can obtain the information necessary to evaluate the right risks and profitably grow and maintain their portfolio.
With Planck, the carrier automated the eligibility process by automatically declining ineligible businesses and approving submissions based on the carrier’s underwriting guidelines, actuarial models and appetite. The agents are able to receive quotes for lower-risk submissions in real time, while the underwriters can focus on higher-risk ones. Planck is also able to defer the decision to the underwriters when the level of confidence isn’t high enough to automatically approve or decline. In such cases, the fields in question are highlighted for the underwriter, allowing them to focus on the right questions and quickly catch contradicting/missing information.
The Results
1. Improved Agent Collaboration
- The agent-underwriter back-and-forth process of required clarifications and requests for additional data was reduced from over 30% to less than 14%.
- The turnaround time was reduced from days to less than two hours.
2. Complete and Accurate Intake Data
- All the relevant data is automatically pulled with over 90% accuracy and coverage. Now, there’s no need to collect data manually or wait for submitted data from agents.
3. Improved Underwriting Operating Model
- Underwriting efficiency was dramatically improved. The process was reduced from about 25 minutes to less than 8 minutes. This allows underwriters to spend most of their time on risk assessment, building agent relationships, marketing and portfolio offerings.
- A structured decision-support model allows for highly objective underwriter decision making.
- Processing time reduced and productivity increased.
By making use of the actual value of its insights, Planck continues to expand the segments where its API is integrated. The company regularly adds new underwriting insights that haven’t been asked for before and that have a high correlation to the risk, thus reducing loss ratios without further increasing friction with agents.
“Incomplete submissions were part of our day-to-day, which forced us to search for answers manually, having back-and-forth discussions with agents regarding a chunk of the submissions, making the turnover time to quote days and sometimes even weeks. With Planck, we managed to reduce turnover time to minutes in the easier cases and to a few hours in more complex cases.” – Chief Underwriting Officer
Planck is an AI-powered dynamic data platform for commercial insurance.
Planck provides the most accurate data insights on small and medium businesses to commercial carriers, using an artificial-intelligence-driven data platform. Leveraging deep industry expertise and breakthrough data science, Planck streamlines the commercial underwriting process by aggregating small and medium businesses’ digital footprints to help insurers acquire a comprehensive understanding of customer risk.
For more information, visit https://planckdata.com.
Contact us at info@planckdata.com.
