The number one request agents have made when the issue of small commercial policies comes up is to find a way to conduct the transaction in a way that’s less expensive for the agents, according to Ralph Blust, executive vice president for Willis Commercial Network.
“It costs a lot of money to handle [small commercial] transactions because there is just as much work [for the agent] on a $1,000 BOP as there is on a $50,000 commercial package policy, yet there is so much less revenue associated with the account,” says Blust. “[Agents] say if there was a way to do less work on the smaller business and yet still provide the level of customer service needed and expected by the client, well, that would be fantastic.”
(For more on carrier/agency technology, check out the interview with Nort Salz of Deep Customer Connections. this interview with Jon Siglar of PacificComp, this interview with Belen Tokarski, and this interview with Dan Driskell of Brower Insurance.)
Technology and the Internet have made ease-of-business possible in virtually every industry, explains Blust, who adds consumers can buy a refrigerator or a car online.
When it comes to insurance, though, carriers have taken it upon themselves to create their own online platforms, points out Blust.
He believes it makes sense for an appointed agent to go on the carrier’s Website and complete an application for that carrier. Such a method is more efficient and faster than for agents to create an ACORD application in their office, email it to an underwriter, and go through the download with the underwriter to receive a quote.
The dilemma for agents comes when an agent is appointed by multiple carriers that all have independent online systems, explains Blust.
“There’s an incredible amount of rekeying and redundancy in [an agent’s] work effort and frankly it’s taken them a step backwards,” he says. “They are doing the same work over and over again for carriers on a direct appointment for a small account.”
The ability to have one hub to be able to connect to multiple carriers through a single application is where Blust and Willis believe the value proposition exists for small business. Willis runs the Insurance Noodle hub and Blust believes it is filling that void.
“There were some levels of integration with carrier systems; however there wasn’t an integrated element of a single-entry, multi-carrier, instant-quoting platform,” he says. “We are finding that in 10 minutes or less an agent can fill an application on the Insurance Noodle site and between a minute-and-a-half and six minutes they receive bindable quotes back from carriers. If you compare that to the way even the Insurance Noodle operated six months ago where it was a 45 minute application and it took a day to three days to get your quotes back, you can see where the efficiency and immediacy mirrors other industries.”
Blust credits the improvement to the Insurance Noodle to fresh thinking. Willis looked at other industries—particularly the telecommunications industry—and what leaders such as Apple’s Steve Jobs have accomplished. With the development of the iPhone, Jobs had determined the cellphone industry was operating on an antiquated model.
“He brought fresh thinking by looking at the iPhone and deciding it will send and receive phone calls, but it will do so much more,” says Blust. “Fast forward five years and you can see everybody has smartphones and that is the new industry standard.”
Willis took that type of fresh thinking and asked what the client wanted and how the brokerage could deliver. From that, Willis realized they needed to partner with outside vendors who would be responsible for the creation of many of these carrier platforms.
“By partnering with SeaPass Solutions, which created and designed this platform with insurance carriers, we were able to build a low-cost and efficient model,” says Blust.
Not finished at that point, Blust explains Willis asked what the next step should be. The Insurance Noodle is focused to be an access point for small, independent insurance agents to work with admitted national carriers, but Blust points out many of those agents have non-admitted business and E&S needs.
“So we partnered with a wholesale broker, the Crump Group, of like mind who was willing to make the investment into a parallel platform with SeaPass to connect the non-admitted insurance company marketplace to the same platform,” says Blust.
By working with a partner who can provide access with the same type of single-entry, multi-carrier quoting platform with the non-admitted marketplace, Blust believes Willis has dramatically changed the retail client’s experience when they have an account.
“If you look at an independent retail agent today, when they take an account in and go to a market, their quote ratio is about 50 percent and their bind ratio is much lower,” he says. “Through this new platform and the professional companies who are disciplined in certain expertise, we are shooting for 90 percent [on quotes].”
Blust believes when you can go to an agent and their chief concern is getting access to solutions for small accounts—other than one or two direct appointments—and offer them a single-entry, multi-carrier quoting platform the ability to access numerous markets in the admitted and non-admitted marketplace and hopefully 90 percent of the time they will receive quotes, that’s a value proposition that’s hard to beat.
“We think people are going to be drawn to the solution and that is evidenced by the first four weeks of the program we have contracted over 1,100 agents,” he says. “There’s specific interest in this platform.”
Blust points out that statistics from Dow Jones show there are 6.6 million businesses in the U.S. and 6.1 million of them have fewer than 15 employees and under $10 million in sales.
“We saw an enormous market opportunity and decided to make the investment,” he says. “We looked at the way the business is currently done and designed a fresh platform as opposed to taking what we had and retooling it.”
Willis has a platform of six insurance companies who Blust claims are of like mind. He adds the agents that have contracted with Willis also are of like mind.
“We encourage agencies to consider it, but we also understand what makes people unique is their different views,” says Blust. “Some may look at this as they looked at the Internet and say it is just a fad, but time has proven that technology is here to stay. Anything that will help people to do more in less time with less work is generally acknowledged over time as a strong business plan.”