RiskWrite 4.0: an insurance product builder’s perspective

RiskWrite’s product build capabilities have been considerably extended in version 4.0, allowing more complex insurance products to be developed, and with more features to help support the quotation process.  This significantly extends the scope of products our carriers and MGAs can build and assists their brokers with distribution via a greatly enhanced user experience.  The following are just 3 examples of the many new features I can use:

  • Tables allow repeating data sets to be captured for a product, for example, multi-vehicle or other multi-asset based products.  Tables can be configured to display in a number of different ways, and tables can contain other tables to ‘n’ levels, e.g. a Vehicles table can contain a table for vehicle modifications.
  • Action buttons and hyperlinks can be embedded in a product’s question set, e.g. to perform an address lookup or display a Key Facts document as part of the quote process.
  • Dynamic fields allow real-time calculation on-screen as part of the quote process.  This can be used for indicative premium calculation based on answers given by an underwriter or broker user.

5 barriers to effective underwriter/broker collaboration

Balancing different commercial agendas between intermediaries and carriers will always make working together to achieve win-win terms a challenge.  Understanding and allowing your counterpart’s business objectives and limitations to influence your negotiations can, in turn, be used to drive your own objectives. What else enables an easy profitable and efficient working relationship? Here are a few things that have been brought to my attention…

1.            Info exchange

Broker submissions

Supporting information of the appropriate detail, length or format is still top of underwriters’ agendas. The London Market Group is enabling this process to be more uniform as part of the Market Reform Contract (MRC) to support broker and underwriter information sharing. Here’s what they say about the standard form of submissions, in their own words:

‘It offers a clear structure and means that brokers present contracts in a consistent manner. This in turn adds clarity to the broker/underwriter discussion and thus enhances the efficiency of the placing process… ensuring the content was aligned with the needs of contract certainty.’

Too little or messy information makes a valid underwriting judgement harder to achieve as well as increasing the risk of non-disclosure of material fact. On top of that reducing requests for further information, drawing out the process, benefits both parties.

Carrier service improved

Regular face-to-face meetings or phone calls, I’m told, are still the best way of maintaining good service levels and ensuring your incoming broker proposals are actually the business you write. That and up to date appetite lists are expected but not always delivered. The real benefit in maintaining these standards is the time freed up for carrier admin teams – when they are not wading through and logging unnecessary emails and proposals they can provide more support elsewhere.

2.            ACORD know how

At the April ACORD club, presentations were made by messaging champions from ACE, ACORD, Lloyd’s and Morning Data. They outlined the need for the market to improve the electronic exchange of structured data between brokers and underwriters. The best way for the market to do this? Full engagement from underwriters AND brokers with ACORD standard messaging.

Lloyd’s commissioned a proof of concept for messaging with the LMA (London Market Association) for their MRC (Market Reform Contract). Despite Lloyd’s working with a software provider and a number of brokers to develop a prototype, (North American Property MRC, Marine MRC and a MRCE), and it being established it could be successfully used in practice –  the London Market Modernisation Activity report  states there needs to be a market ‘pull’ and greater broker appetite for further investment.

Benefits of ACORD standard messaging:

  • Structured ACORD compliant data is automatically produced
  • The broker’s output is a PDF or Word version and an XML file containing the data
  • Human error is eliminated as broker and underwriter systems communicate directly
  • Time is saved on both sides by preventing the need for re-keying
  • If the broker changes any of the details, the underlying data will be updated and reflected in a new version

3. Market initiatives?

The commercially dynamic nature of the market brings huge advantages from free competition, diversity and innovation but is a major disadvantage when trying to address areas of common carrier and broker interest i.e. efficient collaboration.

Higher transactional costs come from DIY local methods of working which are continually resorted to after the failure of what is supposed to be ‘The Next Big Thing’. For example the “Darwin’s” “EPS’s” and “Blue Mountain’s” that inevitably make businesses sceptical about what truly is innovation and what is an expensive idea lacking in long term benefit or buy-in.

4. Solution to ‘sticking plaster’ systems

Poor systems selection based on historic requirements rather than future needs and poor systems integration with legacy systems are top pitfalls to avoid for future broker/ underwriter communication quality. Being blindsided by one new feature when the system doesn’t have the ability to support new distribution channels traps companies in the past –making it difficult to switch capital to new products, lines or geographies to ‘balance the books’ and create profit.

Attempts to expand into new classes or creating new or different products often result in ‘sticking plaster’ systems.

If you look at the retail industry, for example, those who remain profitable are forward looking with highly integrated systems strategies with flexible distribution channels to market. Those who have failed to bring together all of the operational and technology threads and ignore future channels are ending up with the liquidator.

Replicating a retail model for insurance would mean a fully integrated system that handles delegated authority, subscription and remote web-based products through an integrated broker portal.

This would make document, communications and policy details accessible for carriers and brokers to refer to, preventing unnecessary disputes and slowing of work. Reduced data transit time means more time to underwrite and broke deals.  The other benefit is all downstream activities premiums, claims and accounts are joined up in straight through processing.

RiskWrite features

RiskWrite case studies

5.            Doorstep advantage

From what I’ve experienced the ease of socialising with people in the London Market is taken as a given. Whether you started out with a stamp on the trading floor or have grown used to the culture sliding over from another industry, the proximity, as we all know, is a unique competitive feature.

London Market locality, however, increases the competition on your doorstep as well as your opportunity to take advantage of it. Are you making the most of networking with NEW people? Introducing yourself to people outside of your existing outlook contacts? I’m pretty new to insurance, so I want to translate face-to-face opportunities into potential long term commercial relationships/friendships.

My new goal? To follow up introductions more effectively off and online. For example, that interesting conversation I had with X at BIBA results in them as a new LinkedIn connection, someone I listen to on Twitter, invite to events and maybe, just maybe, them remembering Sabrefish when they need a new eInsurance system…

To arrange a demonstration or find out more, call 01923 312 366 or email info@sabrefish.com

New eInsurance Client Executive and Nexus go-live with RiskWrite

Like when you’re waiting for a bus and then two turn up together, we’ve made two announcements recently regarding our eInsurance practice and our multi channel insurance solution, RiskWrite.

First up, was the arrival of Neil Hodges who joined us in the new role of Client Executive with the aim of helping to grow our eInsurance business and to continue to develop RiskWrite.  He will also be contributing to Upstream on Insurance industry topics.

Commenting on his new role at Salmon, Neil said, “I am very pleased to be given the opportunity to help Salmon’s clients grow their business across multiple product lines, distribution channels and regions. RiskWrite is a highly regarded insurance solution and I am looking forward to helping shape the future roadmap.”

Chris Harvey, Chairman of Salmon said, “Neil brings with him extensive experience of the insurance and IT services industry meaning he is well placed to support the ongoing growth of our eInsurance business. He joins us at an exciting stage in the development of RiskWrite, our multi channel insurance solution. Neil’s experience will help us capitalise on the opportunities within the UK and international markets and continue to help our clients respond to the ongoing challenges and opportunities within the insurance market.”

Neil has 30 years’ experience of the insurance industry, having started his career as a Lloyd’s underwriter before moving into the insurance technology and services sector working for companies like Xchanging and Tri Systems.  He is based in our London office and can be contacted on +44 (0)203 170 8546.

This was closely followed by the announcement that Nexus Underwriting Management (Nexus) have gone live on RiskWrite.

Nexus Underwriting Management

Nexus launched its new Lloyd’s Managing General Agency, Nexus Professional Risks (NPR),  earlier this year and approached Salmon to supply a new insurance solution to service and grow the business. Salmon configured and implemented RiskWrite to provide NPR with a full insurance underwriting solution, including policy administration and broker portal. Following initial planning, the project was delivered in just two months.

NPR depends upon reliability and service delivery for its underwriters and 1,800 broker portal users. They needed a smooth, fast transition and are very happy with the outcome.

Colin Thompson, CEO of Nexus Group said “Our partnership with Salmon was created to help achieve our key objective – going live quickly and easily so the service to our underwriters and brokers wasn’t disrupted. The migration process itself started on a Friday and was completed by the following Monday. Ensuring a smooth and fast transition was absolutely key to the success of the Novae acquisition. RiskWrite™ will allow us to respond quickly to rate and market changes and to communicate with agents and brokers across all our channels – so much so that we are considering adopting it in other areas of our business.”

In a troubled global economy, how are brokers and underwriters responding to the threats and opportunities in 2012?

On 22nd May 2012 senior executives from the likes of Novae, Axis, Chartis, Hiscox, Markel, Mitsui, Torus, Liberty, Marsh, Cooper Gay, and Allied World Insurance attended an Executive Briefing on the theme of ‘In a troubled global economy, how are brokers and underwriters responding to the threats and opportunities in 2012?’.

Feedback from attendees was very positive so I thought I’d summarise a few of the key points here.  If you want to read more about RiskWrite, Salmon’s multi channel insurance software here.

Peter Montanaro, Head of Delegated Authorities at Lloyd’s addressed the question of  ”The number of MGAs has grown rapidly in the last two years – is this the quickest route to leveraging global opportunities?”

Peter started by saying ‘No they haven’t and yes, so thank you very much’, proceeding to mock leave the podium. Luckily for us he was joking, and returned to go on ‘I don’t know maybe the number of MGAs have grown, but in Lloyd’s our numbers have stayed stable.’  Peter was challenging the common perception of rapid growth of MGAs and coverholders and shared the losses they’ve experienced as well as the growth; “Since 2007 the total number of coverholders has gone up by 275, but only by 31 in the last 2 years”. He acknowledged the growth and market presence of the ‘coverholder model’ but emphasised Lloyd’s growth rate is steady, with losses.

Peter then gave examples of what Lloyd’s reps thought when asked  whether coverholders are ‘the quickest route to leveraging global opportunities’ in their territories. The Italian rep said MGAs represent the best gateway to the market through technology, good market access and efficiency. By contrast, the German rep, thought it may be the quickest route but questioned the sustainability, profit long term and quality.

“I think at the moment automation is still a choice for each stakeholder but it will become a necessity’’

Peter recounted a scenario when an Hawaiian coverholder had been approved by Lloyd’s and told him they were going to have a party, a bemused Peter remarked on their excitability only to discover they had been ‘waiting’ a year and a half to be approved. The Lloyd’s Performance Management Directorate (PMD) is committed to the market as Lloyd’s turn approvals round in five weeks as long as they’ve received the necessary documents – it turned out the application had been sat with the broker all that time. Peter emphasised their punctuality and flexibility on a case by case basis; welcoming feedback on the compliance questions Lloyd’s ask on MGA/coverholder applications.

The role of technology as a competitive tool emerged as Peter emphasised the need for automation; how it is still a choice in the current market but soon will be a necessity as technology is becoming part of the decision making process when people select a broker, MGA or underwriter as a partner.

 

Simon Wilson, Director of International Development at Markel tackled ‘Distribution strategy for specialty insurers”

Simon marvelled at the unique nature of London market geography compared to its international counterparts. When working for Lloyd’s Asia he recalled his surprise when during a business trip he not only had to walk what he thought would be a ‘a couple of blocks’ to visit the Canadian coverholder; but travel 45 minutes. BY CAR.

Simon mapped the levels of risk complexity and premium size associated with different parts of the Insurance market (left hand slide). Simon noted that mass market retailers (low size and low complexity risks), motor, home owner and personal lines for example, are attempting to move into ever more complex lines.

He positions ‘classic London market play’ as high complexity and high size risks that are coming under pressure from two new groups – regional wholesale markets and specialist SME suppliers. Not only is the ‘classic London play’ coming under pressure from different types of insurance companies but international ‘regional hubs’ too are posing a threat, as they are underwriting more and more of the  large, complex risks in Singapore, Miami and Zurich.

Simon perceives segregating parts of your business into these four categories may, operationally, be more fruitful.  If you try to sell wholesale products through an international network of offices, for example, you may meet unnecessary internal discrepancies.

Simon emphasised this competitive landscape as ‘never still’ and questioned the avoidance of silos, where they are beneficial; however it seemed the stand out trend was a desire to increase the complexity of risks underwritten therefore increasing the mark up per policy.

 

 

Simon shared his experience of financing small MGAs and coverholders with niche propositions, particular products to particular markets, and that their fixed cost base is usually a minimum of two million dollars.  When operating these global entity MGAs and coverholders in a different territory he suggested that they need to write to a 35% loss ratio just to break even.

Simon drew similarities between supermarket retailers and underwriters in making a profit; considering overheads and getting the most out of suppliers.

For me, these were the key points from the event:

  • MGAs are the quickest route to market if effective systems and processes are in place
  • Speed should not be the only focus for coverholders; quality and sustainability should also be considered
  • The BRICS countries present huge growth and penetration opportunities in life, car and home insurance
  • Companies that have invested in developing in house systems can be opposed to new technologies and change
  • The traditional method of spreadsheets doesn’t do it anymore; systems are needed to cope with the demands of modern regulation

Salmon to develop pan-European underwriting platform

We have just announced a deal with DUAL International (part of the Hyperion Insurance Group), to develop and implement a new pan-European web-based underwriting platform.

Having successfully completed an initial strategic consulting phase, Salmon will now configure and implement RiskWrite™ to support DUAL International’s multi-lingual and multi-company operations in Spain, Germany and Italy, on a single instance of the web- based solution.

To read more about the project and Dual, as well as see our other clients in the Insurance sector click here.

Novae Underwriting get revamp by Salmon

A great new announcement was made this week:

Online Underwriting for Motor Fleet line-of-business

The announcement reflects our delight helping Novae launch its Motor Fleet line-of-business on RiskWrite, extending the web-based platform implemented originally back in 2004, to cater for a range of new productsto be marketed quickly and efficiently.  (You can read the announcement we made when we first started working with Novae here and get a complete case study here).

Steve Fookes, IT Director Novae said; “The introduction of Novae’s Motor Fleet Underwriting Service is an opportunity to strengthen our market position. We needed a completely integrated IT infrastructure that could be aligned across the business which was cost effective and would support ongoing growth.”

Designed as a series of fully reusable and customisable components that allow insurance companies to quickly leverage a truly open IT architecture; RiskWrite provides Novae greater visibility of the insured, policies and claims throughout the life cycle; encompassing such activities as quotations, placement of orders, policy production, financial management, document generation, management information and regulatory requirements.

For those not in the know (I am assuming everyone isn’t an expert in online insurance underwriting, thankfully Salmon are) this is a big deal.  The web-based system we have developed ensures that paper-based inefficiencies are a thing of the past and help Novae provide a high level of customer service to its brokers (such as providing online quotes and offering “acceptance” immediately, together with instant documentation).  Motor Fleet Underwriting is a complex business, and as part of the project Salmon has interfaced with third party systems likes the Motor Insurance Database, however, Salmon was still able to ensure Novae hit the go-live deadline and enabled Novae to commence trading on schedule.

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What a great end to the working week….