Customer-Centric Web System Makes Specialty Insurers,Agents More Efficient

The chances that specialty insurers orproducers would ask staff members to spend time keying informationinto their computers for accounts they've lost are slim and none.But imagine if such information could be captured with no extraeffort?

“There's a wealth of information contained in applications onpolicies they don't write,” according to Taylor Smith, director ofsales for ePolicy Solutions, a provider of Web-based technology forinsurance carriers and producers based in Torrance, Calif.

During a demonstration of a generic version of one of ePolicySolutions' Web-based rate-quote-bind-and-issue systems (RQBI) forNational Underwriter, he pointed out the“customer-centric” nature of the process, explaining how itcaptures information thats usually discarded.

Unlike traditional systems, which are organized around policynumbers, ePolicy Solutions customized RQBI systems, known as“RightRisk” systems, are organized around the customer, Mr. Smithexplained. Clicking onto the MGA home page of the three-tiered demosystem linking insurers, managing general agents and retailsub-producers, he created an account for a new customer.

After the MGA creates the account profile, the system generatesan account page. Once created, any subsequent application forinsurance and any policy written for this new customer could beaccessed from the same page, along with profile information, Mr.Smith said.

“You can see how multiple policies and multiple applications canbe involved in a given timeframe, including those applications thathave been denied,” Mr. Smith observed. “Thats a very importantdata-mining feature for users of the system, who may or may nothave a record of whether they worked with that customer, and if so,what happened to the last application. It simply gives a betterview of the customer and what they're buying,” he added.

Last year, ePolicy Solutions (then known as Insurance TechnologySolutions) announced that it had developed a customized system forInterstate Insurance Group's physicians liability business. Mr.Smith and Rick Ulmer, senior vice president of sales, explainedthat a central component of the system is a “private-label Website” that ePolicy Systems created for Interstate based on itsRightRisk technology.

Mr. Ulmer explained that the term “private label” means thatePolicy Solutions “creates a site for the carrier, for the MGA,[or] for the broker–and we brand it” for them. In other words,Interstates private label site–iProNet–has Interstates “look andfeel,” he said. Although only Interstate underwriters and its MGAscan get into Interstates site, Mr. Ulmer said that ePolicySolutions can also create sites that give selected sub-producersaccess to customized carrier systems.

While an Interstate representative declined to take part in aninterview about its system as a matter of company policy, Mr. Ulmersaid that Interstate (ePolicy Solutions' largest client withroughly $800 million business) sought to lower its operating costsby Web-enabling its MGA plants. In particular, it removed thefrictional costs involved in re-keying application and clientinformation, he said, noting there's a complimentary reduced costbenefit for the MGAs as well.

In a statement, ePolicy Solutions and Interstate also said thesite could potentially improve loss ratios by standardizingunderwriting. This could increase growth opportunities because ofthe speed it brings to quoting and issuing processes.

Although the buyer of RQBI solution, in this case, was aspecialty insurer, insurers arent ePolicy Solutions only potentialclients, Mr. Ulmer made clear. In November, ePolicy Solutionsacquired Star Solutions, a provider of desktop software solutionsfor MGAs. As a result of the acquisition, ePolicy Solutions isdeveloping a Web-based version of a Star product that would allowan MGA to get multiple physician or dental quotes “in real-timefrom one application,” he told NU.

Typically, Mr. Ulmer noted, ePolicy Solutions sets up Web sitesfor carriers and provides a monthly subscription service to theMGA. But “we really do have two separate client bases. We couldwork with an MGA that has the pen on a program. We could justautomate that program, or automate all their programs and thenprovide data feedback to the carrier,” he said.

If it sounds like ePolicy Solutions is still searching for whereits systems fit in, the firms history reveals several years ofexperimentation.

“We really started as a retail insurance brokerage operation,online, in 31 jurisdictions, selling mainly professional liability”directly to potential insureds three years ago, Mr. Ulmer said,referring to the technology firm's parent company, ePolicy.com.“Then we expanded into the property-casualty commercial space,” butstill as an online retailer, he said.

Working with over a dozen carrier partners, ePolicy.com allowedusers to come to the retail site, fill out applications, get rates,manipulate deductibles, and ultimately view, bind and receivepolicies, Mr. Ulmer explained. But, he said, “the underwriters wewere talking to from a retail perspective kept asking, Why dont youtalk to us about selling us the technology?”

So after Web-enabling over 300 products on the ePolicy.comsite”practicing on ourselves”–the firm launched a subsidiary,Insurance Technology Solutions, a non-licensed purely insurancetechnology company, Mr. Ulmer said.

Recently, ePolicy.com stopped accepting new applications forinsurance and ITS was renamed ePolicy Solutions.

“Selling online is a slow build. The technologys there. Thecapabilitys there. The buyers arent,” Mr. Ulmer said.

On the other hand, theres a real need for the technology inagents offices, the two men said. In some cases, MGA policyprocessing has become “dramatically inefficient,” Mr. Smith said.He related a story about an MGA using four RQBI systems that itaccumulated over the years. Because the operating systems wereincompatible (some were DOS-based and others operated on Windows95), and because of their size, the agency was in the process ofputting two computer terminals on every desk to access thedifferent systems, he said.

“There's something somewhat perverse about technology takingover like that,” Mr. Smith observed. “And the goal, of course, isto allow technology to make things easier, not harder.”

MGAs and carriers “share one common goal–customer service,” Mr.Smith continued. “Both recognize that speed and efficiency make forbetter customer service,” he said.

He demonstrated the efficiency of the current RQBI system bypulling information from an application and from the carrierdirectly into a quote letter going to a sub-producer.

Without the system, people would “take the information out ofthe system, print it off, walk over to the word processor, type itall in again, print that again, and then they'd go mail it or faxit,” Mr. Smith said.

Additional features allow the MGA to make online referrals tothe carrier during the application process and to create mid-termpolicy endorsements.

“This really creates one-stop processing. And thats really theultimate goal no matter where you sit in the food chain,” Mr. Smithsaid.

Another feature of the system is that it keeps track of policiescoming up for renewal (perhaps in a 30 to 120-day timeframe), basedeither on rules identified by the carrier, the MGA, or statutoryregulations in a certain state, Mr. Smith said. With “potentiallyhundreds of policies” to keep track of, agents can sort policies inmultiple ways, he said, noting that they can be managed by businessline, renewal date or status of referral.

Mr. Ulmer added that ePolicy Solutions RQBI systems “are realtime, on time, live. Were seeing lots of people talk about that.But in reality, [in their systems, the user has] to go offline tofinish a transaction. They can do rate and quote, but they cantissue. Or they can rate and quote, but they cant quick quote,” hesaid.

Mr. Smith demonstrated the “quick-quote” feature, which allowsan MGA to “get a real good solid number based on filling out fewerdata fields” on an application. In a physicians liability demo,only 12 questions had to be answered.

“MGAs dont want to fill out a complete application just to seeif theyre in the carriers ballpark on price,” Mr. Smith noted.

Mr. Ulmer said that while MGAs will be filling out the onlineapplications initially, he believes that sub-producers willeventually do some of that work.

“We think theres going to be a migration over the nextthree-to-five years, as MGAs get comfortable being back in thebusiness of managing producers and sub-producers, and being contentand product experts rather than process experts,” said Mr. Ulmer,adding that MGA shops are probably too focused on manual processesof “getting the right forms.”

While competitors offer RQBI systems, Mr. Smith noted that somealternative systems are completely internal rather thanWeb-enabled. ePolicy Solutions Web-enabled systems, he said, are“accessible to multiple users at the same time” and are “scalable.”In other words, they can be sized so that multiple users dontcreate “horrible processing slowdowns or a complete inability toget on” them, Mr. Smith said.

An ePolicy Solutions system can be up and running in 90 to 120days, once the firm gets the go-ahead to create one, Mr. Ulmersaid. He added that the company is “within days” of announcing thatit will be setting up a private label Web site for another insurerwith a $2 billion book of business.

Reproduced from National Underwriter Property &Casualty/Risk & Benefits Management Edition, June 10, 2002.Copyright 2002 by The National Underwriter Company in the serialpublication. All rights reserved.Copyright in this article as anindependent work may be held by the author.