Vendors Automate Processing Tasks

Like managing general agencies and wholesale brokers, there are a growing number of Web-based companies situated between retail agents and property-casualty insurance carriers.

But companies like singleentry.com and Insurity.com arent contracting with specialty insurers to provide markets for retail agents looking for hard-to-place specialty coverages.

Instead, for the technology firms who count specialty insurers and MGAs among their clients, ideas about Web-enabling insurers and agents, and about automating parts of their underwriting and rating processes, are the missions that put them in business.

“We have always been [operating] in the segment between agents, brokers and underwriters, instead of going down to the consumer level,” said Jake Hampton, chief executive officer of Austin, Texas-based singleentry.com. But “we dont act as an online MGA. We act strictly as a conduit so carriers and brokers can communicate better,” he said.

The basic product singleentry.com offers is a Web-based data collection, submission and filtering insurance platform. According to Mr. Hampton, that means that singleentry.com “gives brokers, agents, MGAs, and carriers the ability to collect the data online, to run the data through a system of filters or business rules, and then direct the data where it needs to go.”

Carriers and MGA underwriters “only receive the types of risks they want to receive” and they receive information on those risks in the form they want it in. They dont have to key in information again, he said.

Mr. Hampton, a former underwriter and agent, said he launched the company, referred to on its Web site as a “process service provider,” along with partner Jay Menna in 1999, “out of frustration.”

“The process of procuring insurance was extraordinarily inefficient,” he said. “We thought we could come up with a better way of processing insurance.”

He said singleentry.com operates through three business groups. One of them, the Small Business Solutions Group, creates specialty template-type programs, allowing retailers and MGAs to input information, to get quotes back instantly, and to bind risks online.

One technology the group developed is called Fast, Leading edge, Automated, singleentry, Hyperlinked underwriting module. FLASH allows MGAs to Web-enable any insurance program.

“Agents can pull up an application, fill it out, hit the submit button and [the system] writes it up and instantly sends it to an [MGA] underwriter,” Mr. Hampton said. The underwriter, then, has several different options–request more information, decline the risk, or quote it instantly and send it right back.

“Instead of going through the normal processes of filling out paper, its all hyperlinked,” he said, noting that by clicking on a link, the agent gets an instant response back as to what the MGA will do.

Mr. Hampton said singleentry.coms Workload Business Process Group builds the automated filtering processes that direct work flowthe technologies that determine, for example, if applications get sent to a Chubb or an AIG, by matching application information with different insurers underwriting criteria.

In July, singleentry.com announced that Los Angeles-based MGA Anderson & Murison Web-enabled two of its insurance programs using singleentry.coms technology–commercial casualty and personal umbrella. Both programs use filtering mechanisms to compare risks to the MGAs underwriting guidelines. The umbrella program also allows agents to have password-controlled access to the MGAs Web site and to receive real-time quotes on applications for acceptable risks.

“The last thing were working on, that were most excited about, is a specialty marketplace for financial products,” Mr. Hampton said. The Directors and Officers Market Exchange will eliminate the need for agents to go to multiple Web sites to get quotes for D&O and other financial products coverage, he said.

“We give [agents] the ability to go to one place and fill out the information one time.” Then, “we deliver the data” to however many carriers the agents are contracted with– in the format in which those carriers want to receive it, he said.

DOME is scheduled to launch on December 1, he said.

Mr. Hampton said several different issues factor into the cost of doing business with singleentry.com. “We can build a custom application and charge an annual license fee” to companies or insurers. “Or we can participate in the amount of volume that runs through” the systemcollecting a percentage of that revenue.

In that case, “we would ask for a small amount of payment up front, so that we can build” a system, he said.

What “we like to stress most is that we have been agents and we have been underwriters. Our customers are agents and underwriters and we dont change the process so much as we make it more efficient,” Mr. Hampton said.

“With the filtering system that we have developed, underwriters can reduce workflow by as much as 40-55 percent. They can process a whole lot more information on better risks that fit their profile[s], rather than weeding through a bunch of stuff that doesnt fit,” he said.

Another business process and technology firm serving the needs of commercial insurers, MGAs, and retail agents is San Antonio-based Insurity.com, a division of Choicepoint.

“MGAs typically have many of the same requirements a carrier might have–underwriting, rating and issuing insurance policies,” said Clyde Owen, Insuritys chief executive officer. Those processes are “really the core of our functionality,” he said.

Underwriting, rating, and issuing functions, he said, are at the heart of Insuritys two main products, Commercial Intellisys and Producer Intellisys.

Mr. Owen described Commercial Intellisys, an underwriting and policy-processing system for commercial insurers, as a “mainstream rating operation that would be used inside the carriers environment by internal [company] underwriters and adjusters,” he said.

Moving to the MGA and retail agent communities, Mr. Owen said that Insuritys products help producers communicate with carriers, instead of supporting internal brokerage environments.

“Producer Intellisys takes that same functionality”the workings of a carriers internal underwriting and rating system–and allows the carrier to extend that functionality to its producers, either agents or brokers, he said.

“Its a way for carriers to extend their work to agents and brokers in a more controlled fashion [by] providing a Web-interfaced functionality.” He also said that the system enables carriers “to limit that functionality to what they might choose.”

For example, an underwriter might issue a $4 million policy internally for a thousand vehicles. While an agent might be able to log onto the system to quote and bind commercial auto policies also, the agent might only be able to produce a quote for a much smaller subset of business, he said.

Software costs vary by organization size, complexity of the installation, and number of users, he said, citing a range from $50,000 to more than $1 million.

Mr. Owen believes Insuritys success lies in the fact that it has “a broad enough set of tools [to] appeal to almost all of the commercial insurance space. MGAs, wholesalers and carriers can fit some piece of our products into whatever their strategy may be with respect to ratings and policy” issuance, he said.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, September 10, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.

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