The insurance policy life cycle has become exponentially more digital since 2020, with consumers and agents pushing for automation, real-time transactions, and more self-service options. Today, commercial insurance clients expect a buying experience that more closely mirrors how they get their personal lines coverage.
Lessons from personal lines comparative raters
Carriers have been here before with personal lines rating platforms and can benefit from that experience to prepare for commercial comparative raters. The current solutions are still in their early days, but the history of personal lines suggests we'll see a gradual usage ramp-up, followed by rapid widespread adoption.
As commercial raters start to gain traction among agents, the sweet spot for insurers joining these platforms is going to be gathering enough information to appropriately rate risks and confidently identify declines, while giving
How carriers can prepare
1.Think like an agent
For carriers, prepping for commercial lines raters starts with focusing on the agent experience. An agent's objective is to get an accurate quote and to have a clear path to close the business. Keeping that perspective top of mind is essential to streamline the quoting workflow so it can be standardized in a rating platform. In practice, that might mean:
- Determining how to get to an accurate quote with the fewest questions.
- Identifying which questions are required for an indication versus a full binding premium.
- Ensuring agents know the status of a quote up front. Is it available or declined? Can the agent issue it on the spot or does it need an underwriter to review?
2. Evaluate your underwriting processes
The carriers that are most successful in generating business through real-time rating platforms share two commonalities.
First, successful carriers are willing to have some flexibility in the language of their questions. Insurers often ask for similar information, but in slightly different ways or terms. As carriers connect to emerging commercial lines raters, being open to some standardization in their questions and language can make it easier and faster to get onboard (with the added benefit of improving the agent experience).
Second, they identify the minimum viable list of questions and data elements needed to yield the most accurate underwriting eligibility. That means right-sizing the questions by putting forth ones that are truly essential to get to a decline, indication, or a full-binding premium versus those that are just nice to have.
Getting there is an optimization exercise on your underwriting needs:
- Look at the data elements collected to define which elements align to rating and which align to underwriting rules (and some are both).
- Prioritize the data elements that bring the most value in your underwriting process. Which yield the highest percentage of declines? Which triggers your underwriting rules the most? What do you need to get the most accurate quote?
- The overlap of those elements provides the balance to help create a right-sized list of questions to deliver the best possible user experience—targeting 90-95% premium and underwriting eligibility after initial collection of data from the agent.
On paper it sounds straightforward, but it takes time—and the right leadership and team—to get there.
3. Assemble an internal 'dream team'
In my previous role at a National Insurance Carrier, we curated a cross-functional team made up of the necessary roles to define the process and execute the strategy. The team consisted of actuarial underwriting, underwriting, analytics and data, strategy development, product, and finance.
The roles you pull in should be able to think broadly about the goal of the independent agent while supporting the profitability and integrity of the brand. Define a timeline for developing and rolling out your strategy. Then regularly monitor the type of risks coming through and transaction volume so you can make necessary tweaks to your process.
Simpler workflows for carriers and agents
These three steps set the stage for easier connectivity to the tech platforms agents are asking for to quote commercial insurance. But the benefits aren't for agents alone.
Looking back at personal lines raters, insurers on rating platforms often have an opportunity for real growth by getting in front of new agents, while positioning themselves as a carrier of choice for their existing partners. And the exercise of prepping to join a comparative rater can benefit a carrier's proprietary portal, as well as lay a foundation for easier tech integration to access more points of distribution.
Finally, by getting involved early with the tech providers that are creating commercial lines raters, insurers of all sizes can play a part in influencing the direction of those platforms. They can lead rather than simply being forced to get on board when these techs go mainstream. And they'll reap the benefits of delivering a better, more connected customer experience and more accurate quoting that drives growth, profits, and a healthier bottom line.
