Brokers

Getting There Faster

Brokers use social media and other digital channels to grow their businesses.
By: | March 3, 2014 • 8 min read

It has been an uphill climb for the insurance industry to incorporate faster and more efficient technology into its systems. And perhaps no segment of the industry is under more pressure to get this challenge right than agents and brokers.

“What we are finding out is that brokers, agents, wholesalers and insurers are all in this race to utilize technology better,” said Kabir Syed, CEO of Greenwich, Conn.-based RiskMatch.

But Syed said the different sectors are too siloed.

Advertisement




“Our industry is not very efficient at integrating multiple systems together,” said Syed, who was managing director, strategy and operations for Marsh’s U.S. global risk management business prior to launching RiskMatch two years ago.
RiskMatch was founded as an analytics firm delivering a suite of web-based solutions for insurance brokers and underwriters throughout the United States.

The brokerages, as hard as they are working to get it right, agree that their industry in general is not a leader in the area of using technology to serve customers.

“At a high level, this industry has lagged behind other industries that are more data and information rich in realizing some of the technology opportunities,” said Patrick Donnelly, the Chicago-based chief broking officer of the Financial Services and Professional Group at Aon Risk Solutions.

Cyber Shopping

Certain sectors of the industry have found it easier to keep pace with technology. Many small businesses are now able to buy their commercial insurance direct online. It was probably only a matter of time — personal lines such as auto have been sold directly for many years.

“Small business owners in particular are more savvy. They understand their business better than anyone.”

— Tom Kavanaugh, partner, PricewaterhouseCoopers

“We’re seeing more of a propensity, especially in small commercial businesses, for a willingness not only to shop around more but to use a direct channel versus historically what was much more driven by agent and broker activity,” said Tom Kavanaugh, Chicago-based partner, Financial Services Practice at PricewaterhouseCoopers (PwC). “Small commercial is beginning to act more and more like individual consumers.”

Overall, there’s much more information available online and through digital channels, and financial IQs are growing, so there’s more willingness to have a more self-directed shopping experience than in the past, Kavanaugh said.

“You’re beginning to see more and more activity, particularly at the early stages of the process in terms of the research component,” said Kavanaugh.
“Small business owners in particular are more savvy. They understand their business better than anyone,” he said.

Hiscox USA was the U.S. pioneer in direct online sales of insurance policies to business. New York-based Kevin Kerridge, the company’s head of small business insurance set up and ran Hiscox’s direct-to-business operation in the U.K. for 10 years before taking on the challenge of establishing a similar enterprise in the United States in 2010.

Advertisement




“Ninety percent of the policies we sell through our online service are first-time buyers of business insurance,” said Kerridge. “And I know the reason for that. If you’re a small business and suddenly you figure out you need, say, errors and omissions coverage or general liability, today most of these people are so plugged into online technology that the first thing they’ll do is Google the subject rather than go through an agent who does their car or their home insurance.”

Half of Hiscox USA’s first-time business goes through a digital channel without touching a human being, Kerridge said.

“Within 20 minutes, they get their policy document online. Through other channels, that could take a week to accomplish,” he noted.

Google is obviously key for Kerridge’s business. “We want to be highly rated on natural search rather than through ads. Anybody can buy an ad,” he said.

But agents aren’t excluded from this approach, far from it.

In the last year, Kerridge said, his firm has started to leverage its direct sales technology by giving agents instant access to the same products consumers can buy on its website.

“Outside agents are selling hundreds of Hiscox policies each week through Hiscox online wholesale portals,” he said.

The Social Channel

Social media is another area where some brokers are getting it right.

Just last month, Risk & Insurance® gave a Power Broker® award to Denton Christner, a vice president with BayRisk Insurance Brokers, who founded insuremyfoodtruck.com in mid-2012.

Nine months into 2013, the site had more than 7,000 unique visitors. The site receives between 60 and 125 quote requests per month and is serving 400 mobile food vendors in multiple states, he said.

Christner connects with his customers via social media outlets such as Facebook, Twitter and Instagram to get to know them personally and find out more about their businesses.

“Social media is a way to build word of mouth, to capitalize on positive reviews from people who have used us.”

— Kevin Kerridge, head of small business insurance, Hiscox.

Some carriers are also employing social media to bolster their marketing efforts.

“Social media is a way to build word of mouth, to capitalize on positive reviews from people who have used us,” said Hiscox USA’s Kerridge.

“I have a dedicated social media person on my team. We took a gamble early on with social media — Facebook, Twitter and LinkedIn — to monitor and influence conversations about our company and our products.”

Education and Branding

Added PwC’s Kavanaugh, “You’re seeing agents leverage technology more and more across the entire customer lifecycle. You’re seeing agents use social media platforms for prospecting and customer acquisition.”

Advertisement




Sites like YouTube are being utilized for different educational components, Kavanaugh added.

“Certainly, the individual branding component comes into play in a big way and you’re even seeing agents using quick-quote or direct-quote functionality on their individual websites in order to cater to people going further and further into the shopping process.”

At Aon, gathering social media data is part of a multi-channel marketing strategy, said Donnelly.

“This campaign will also include some traditional media channels —some of the industry publications, there might even be some broadcast and there could also be trade events included,” he said.

“The beauty of a multi-platform approach is that we can track engagement with prospects across all those channels, with the goal of converting that client or prospect with a solution that is tailored to them,” Donnelly added.

Putting Big Data to Work

Big brokers are going after bigger clients and have been investing for years to get there.

The Aon Global Risk Insight Program (GRIP) employs an automated approach to serving clients around the world.

The platform was developed in 2008 to aggregate and analyze Aon’s insurance placement activity, from submissions to quotes to binding.

The tool allows Aon brokers to tap into the universe of GRIP placement data to benchmark clients against their peers with respect to limits, exposures, premium spend and rate, said Donnelly.

It also enables Aon brokers to select specific views of marketplace developments such as pricing trends and forecasts and carrier quoting behavior.

With a team of 100 colleagues, the Aon Centre for Innovations and Analytics, based in Dublin, analyzes millions of data points captured by Aon GRIP to help clients make more informed strategic decisions related to risk and insurance, said New York-based Robert Stein, U.S. middle market chief broking officer with Aon Risk Solutions.

“By capturing information about the broking process as it is unfolding, Aon arrives at early insights into developing trends,” Stein said.

At the same time Aon is pushing hard on the technology front, however, Stein underscored that the industry should not lose sight of the human side of the business.

“I think it’s important to note that brokerage is a people business, but while there’s no substitute for strong personal relationships, our goal is to make our products more business-minded so we can make more fact-based decisions that allow us to problem solve in a better way,” Stein said.

In Chicago, Ted Devine, former president of Aon Risk Services and one of the driving forces behind the creation of Aon GRIP, has created a new set of insurance services around Insureon, which counts Edgar Bronfman as a major investor.

Insureon, an insurance delivery platform for small-business owners, earlier this year announced an agreement to acquire Insurance Noodle, an online wholesale insurance broker. Insurance Noodle was a subsidiary of Willis Group Holdings.

“The combination of Insureon’s top-tier online strategy with Noodle’s geographically diverse network of brokers and agents is a key component of our long-term strategy for growth,” said Devine.

Advertisement




“We’re expanding our web presence via web pages, digital advertising, social media, blogs, eBooks and other digital attributes so that when small-business owners search for information about protecting their business, regardless of industry, they find it via an Insureon property,” said an Insureon spokesperson.

Broker-Carrier Relationships

When it comes to enhancing broker-carrier relations, ACE Risk Management has developed several technology-driven programs.

“Every piece of ACE Risk Management business that we can make electronic, we’re going to do that,” said Matt Merna, New York-based division president of ACE Risk Management.

Toward that end, the company has introduced ACE Worldview, an online tool that allows its brokers and clients to access their electronically held documents in one web-based portal.

“It makes it very easy for clients to access policies, endorsements, contracts, legal agreements and collateral — everything that can be stored and accessed electronically,” said Philadelphia-based Gary Kramer, senior vice president, ACE Global Services.

After consulting with its brokers and clients, the company also developed ACE Accelerator, which is for automotive selection forms. “As a client you have to choose your coverage selections and this previously was a very difficult practice in which a client would have to fill out 300 pages of forms,” Kramer said.

Now, instead of having each form signed and dated individually, ACE Risk Management asks overarching questions about the desired coverage. The responses are then mapped to the forms, and everything is electronically signed with one click of the button.

“So what used to take probably three business days now takes less than 20 minutes for the client,” Merna said.

Steve Yahn was a freelance writer based in New York. He had more than 40 years of financial reporting and editing experience. Comments can be directed to [email protected]

More from Risk & Insurance

More from Risk & Insurance

Property

Insurers Take to the Skies

This year’s hurricane season sees the use of drones and other aerial intelligence gathering systems as insurers seek to estimate claims costs.
By: | November 1, 2017 • 6 min read

For Southern communities, current recovery efforts in the wake of Hurricane Harvey will recall the painful devastation of 2005, when Katrina and Wilma struck. But those who look skyward will notice one conspicuous difference this time around: drones.

Advertisement




Much has changed since Katrina and Wilma, both economically and technologically. The insurance industry evolved as well. Drones and other visual intelligence systems (VIS) are set to play an increasing role in loss assessment, claims handling and underwriting.

Farmers Insurance, which announced in August it launched a fleet of drones to enhance weather-related property damage claim assessment, confirmed it deployed its fleet in the aftermath of Harvey.

“The pent-up demand for drones, particularly from a claims-processing standpoint, has been accumulating for almost two years now,” said George Mathew, CEO of Kespry, Farmers’ drone and aerial intelligence platform provider partner.

“The current wind and hail damage season that we are entering is when many of the insurance carriers are switching from proof of concept work to full production rollout.”

 According to Mathew, Farmers’ fleet focused on wind damage in and around Corpus Christi, Texas, at the time of this writing. “Additional work is already underway in the greater Houston area and will expand in the coming weeks and months,” he added.

No doubt other carriers have fleets in the air. AIG, for example, occupied the forefront of VIS since winning its drone operation license in 2015. It deployed drones to inspections sites in the U.S. and abroad, including stadiums, hotels, office buildings, private homes, construction sites and energy plants.

Claims Response

At present, insurers are primarily using VIS for CAT loss assessment. After a catastrophe, access is often prohibited or impossible. Drones allow access for assessing damage over potentially vast areas in a more cost-effective and time-sensitive manner than sending human inspectors with clipboards and cameras.

“Drones improve risk analysis by providing a more efficient alternative to capturing aerial photos from a sky-view. They allow insurers to rapidly assess the scope of damages and provide access that may not otherwise be available,” explained Chris Luck, national practice leader of Advocacy at JLT Specialty USA.

“The pent-up demand for drones, particularly from a claims-processing standpoint, has been accumulating for almost two years now.” — George Mathew, CEO, Kespry

“In our experience, competitive advantage is gained mostly by claims departments and third-party administrators. Having the capability to provide exact measurements and details from photos taken by drones allows insurers to expedite the claim processing time,” he added.

Indeed, as tech becomes more disruptive, insurers will increasingly seek to take advantage of VIS technologies to help them provide faster, more accurate and more efficient insurance solutions.

Duncan Ellis, U.S. property practice leader, Marsh

One way Farmers is differentiating its drone program is by employing its own FAA-licensed drone operators, who are also Farmers-trained claim representatives.

Keith Daly, E.V.P. and chief claims officer for Farmers Insurance, said when launching the program that this sets Farmers apart from most carriers, who typically engage third-party drone pilots to conduct evaluations.

“In the end, it’s all about the experience for the policyholder who has their claim adjudicated in the most expeditious manner possible,” said Mathew.

“The technology should simply work and just melt away into the background. That’s why we don’t just focus on building an industrial-grade drone, but a complete aerial intelligence platform for — in this case — claims management.”

Insurance Applications

Duncan Ellis, U.S. property practice leader at Marsh, believes that, while currently employed primarily to assess catastrophic damage, VIS will increasingly be employed to inspect standard property damage claims.

However, he admitted that at this stage they are better at identifying binary factors such as the area affected by a peril rather than complex assessments, since VIS cannot look inside structures nor assess their structural integrity.

“If a chemical plant suffers an explosion, it might be difficult to say whether the plant is fully or partially out of operation, for example, which would affect a business interruption claim dramatically.

Advertisement




“But for simpler assessments, such as identifying how many houses or industrial units have been destroyed by a tornado, or how many rental cars in a lot have suffered hail damage from a storm, a VIS drone could do this easily, and the insurer can calculate its estimated losses from there,” he said.

In addition,VIS possess powerful applications for pre-loss risk assessment and underwriting. The high-end drones used by insurers can capture not just visual images, but mapping heat, moisture or 3D topography, among other variables.

This has clear applications in the assessment and completion of claims, but also in potentially mitigating risk before an event happens, and pricing insurance accordingly.

“VIS and drones will play an increasing underwriting support role as they can help underwriters get a better idea of the risk — a picture tells a thousand words and is so much better than a report,” said Ellis.

VIS images allow underwriters to see risks in real time, and to visually spot risk factors that could get overlooked using traditional checks or even mature visual technologies like satellites. For example, VIS could map thermal hotspots that could signal danger or poor maintenance at a chemical plant.

Chris Luck, national practice leader of Advocacy, JLT Specialty USA

“Risk and underwriting are very natural adjacencies, especially when high risk/high value policies are being underwritten,” said Mathew.

“We are in a transformational moment in insurance where claims processing, risk management and underwriting can be reimagined with entirely new sources of data. The drone just happens to be one of most compelling of those sources.”

Ellis added that drones also could be employed to monitor supplies in the marine, agriculture or oil sectors, for example, to ensure shipments, inventories and supply chains are running uninterrupted.

“However, we’re still mainly seeing insurers using VIS drones for loss assessment and estimates, and it’s not even clear how extensively they are using drones for that purpose at this point,” he noted.

“Insurers are experimenting with this technology, but given that some of the laws around drone use are still developing and restrictions are often placed on using drones [after] a CAT event, the extent to which VIS is being used is not made overly public.”

Drone inspections could raise liability risks of their own, particularly if undertaken in busy spaces in which they could cause human injury.

Privacy issues also are a potential stumbling block, so insurers are dipping their toes into the water carefully.

Risk Improvement

There is no doubt, however, that VIS use will increase among insurers.

Advertisement




“Although our clients do not have tremendous experience utilizing drones, this technology is beneficial in many ways, from providing security monitoring of their perimeter to loss control inspections of areas that would otherwise require more costly inspections using heavy equipment or climbers,” said Luck.

In other words, drones could help insurance buyers spot weaknesses, mitigate risk and ultimately win more favorable coverage from their insurers.

“Some risks will see pricing and coverage improvements because the information and data provided by drones will put underwriters at ease and reduce uncertainty,” said Ellis.

The flip-side, he noted, is that there will be fewer places to hide for companies with poor risk management that may have been benefiting from underwriters not being able to access the full picture.

Either way, drones will increasingly help insurers differentiate good risks from bad. In time, they may also help insurance buyers differentiate between carriers, too. &

Antony Ireland is a London-based financial journalist. He can be reached at [email protected]