When comparing small carriers with international giants, onecommon competitive edge ascribed to the big guys is their advantagein the technology realm: They have the economies of scale to makesubstantial investments in sophisticated technology, such asadvanced predictive- modeling tools.

But vendors argue that the benefits of cutting-edge technologyare not reserved for those with deep pockets. They are accessibleto everyone, and third-party companies are available to help smallcarriers “put data through the press,” says Marty Ellingsworth,president of ISO Innovative Analytics.

“We are able to package what we learn into a set of products,building an industry solution to get around the obstacle [ofcost],” Ellingsworth adds.

The cost is less than paying one full-time predictive modeler,he says, adding that ISO has been successful in convincing chieffinancial officers, information technology professionals and legalcounsel that “they can save money by buying a solution off theshelf that works, and it's built at a price point to sell.”

“If we can go in and confidently say, 'We're giving you abetter, more accurate rate,' they listen,” Ellingsworth adds.

Falls Church, Va.-based CSC also provides customized technologysolutions that it says enables smaller insurers to enjoy the samebenefits as larger companies, with products that make it possiblefor smaller insurers to focus their efforts on underwriting—andoutsource the rest.

“With various deployment options, small/regional insurers canramp up quickly and take advantage of robust software withaffordable, pay-per-use models,” says Susan Hunter, vice presidentin CSC's property and casualty insurance division.

Pay-per-use models, and the growing use of cloud-computingoptions, also work in the favor of smaller players—because theywould have a far more difficult time recovering from a bad,in-house technology investment than their largercompetitors. 

“They don't have unlimited resources to call for a do-over,”notes Chuck Chamness, president and chief executive of the NationalAssociation of Mutual Insurance Cos.