5 Opportunities Small Business Insurers Should Embrace

A new LexisNexis Risk Solutions report explains how small commercial business insurance carriers can turn their top challenges into competitive advantages.  
By: | February 13, 2019 • 4 min read

The gist: Commercial insurance carriers insuring small businesses face significant challenges, yet there are ample opportunities to maintain profitability while also meeting customers’ increasingly high expectations.

A new Lexis Nexis Risk Solutions report, A Time of Change in Small Commercial Insurance, highlights the perspectives of more than 400 insurance professionals on five key topics: automation, data assets, predictive modeling, customer experience and market trends.

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What stood out? For starters, automation is underutilized. The vast majority of professionals surveyed agree that automation is valuable for small accounts. But only about half are actually doing it, and 89 percent of respondents reported the need to manually re-evaluate insurance applications.

It’s notable that the needle hasn’t moved much on automation in the past few years, comparing the current report to a 2016 LexisNexis study on automation.

Unfortunately that amounts to profits left on the table. With automation, carriers can minimize issues related to incomplete or error-ridden applications, minimize labor-intensive busywork for underwriters and enhance the customer experience. Those that fully leverage automation will have a substantial competitive advantage.

Also, data is inconsistently leveraged. Respondents reported using a wide range of data assets with public records and Internet search results as the most widely used. The data assets carriers value the most are consumer and commercial credit records. Yet around 40 percent of carriers have not integrated these specific data assets into their standard workflow. The most-used data assets — public records and Internet search results —are even less likely to be part of a standardized process, with 50 percent or fewer respondents reporting

So is predictive modeling. 81 percent of commercial carrier respondents agree that predictive modeling is important to their commercial underwriting, pricing and rating. They also believe predictive modeling can improve risk assessment and support consistency decision-making. Yet only a third use it consistently, while 45 percent are using it on a case-by-case basis.

By leveraging predictive modeling consistently, carriers can improve risk assessment and scoring data, and support more efficient decision-making. In the bigger picture, they can build on that knowledge to adopt predictive modeling as a consistent business practice.

The customer experience has room for improvement. According to a 2017 PricewaterhouseCoopers survey of small business owners, 70 percent of those who purchased personal insurance online would like to be able to purchase their business insurance online as well. However, commercial carriers would likely fall short in providing the level of customer-centric service those customers have come to expect in personal lines.

Commercial insurance carriers surveyed identified faster turnaround times (90 percent) and accuracy of customer data (85 percent) as integral to a positive customer experience. Notably, around 80 percent also identified those issues as areas where they could be doing better.

However, automation can help achieve faster turnaround time, and predictive modeling and a streamlined process to standardize how policies are written — all of which can go a long way toward boosting customer satisfaction.

Carriers risk falling behind. According to respondents, telematics, Internet of things (IoT), data breaches, sharing platforms and artificial intelligence are perceived as the most likely trends to impact their business. But fewer than half are actively making strategic changes in response to them, and 11 percent don’t plan to make any strategic changes at all.

Taking a wait-and-see approach to emerging strategies and trends is a luxury carriers can no longer afford. It’s important to remember that customers are also aware of market trends and how new capabilities being offered can benefit their businesses and enhance their purchasing experience. Buyers will gravitate toward carriers that can give them the experience they demand, while complacent carriers will fall behind.

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“It can be overwhelming for commercial insurers to know where to begin in order to keep up and gain a competitive edge. But the good news is that the carriers who identify the gaps and act now can make meaningful progress towards attaining 2019 and future goals,” said Mathew Stordy, Senior Director of Commercial Insurance at LexisNexis Risk Solutions.

A little more from the source:  Stordy says that one of the most promising areas of digital automation for commercial insurance can be found in data prefill solutions. Using data prefill as part of the standard workflow can help commercial carriers to support faceless transactions, develop direct-to-consumer products, and access new customer segments, among other new opportunities, Stordy explains. &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]

4 Companies That Rocked It by Treating Injured Workers as Equals; Not Adversaries

The 2018 Teddy Award winners built their programs around people, not claims, and offer proof that a worker-centric approach is a smarter way to operate.
By: | October 30, 2018 • 3 min read

Across the workers’ compensation industry, the concept of a worker advocacy model has been around for a while, but has only seen notable adoption in recent years.

Even among those not adopting a formal advocacy approach, mindsets are shifting. Formerly claims-centric programs are becoming worker-centric and it’s a win all around: better outcomes; greater productivity; safer, healthier employees and a stronger bottom line.

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That’s what you’ll see in this month’s issue of Risk & Insurance® when you read the profiles of the four recipients of the 2018 Theodore Roosevelt Workers’ Compensation and Disability Management Award, sponsored by PMA Companies. These four programs put workers front and center in everything they do.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top,” said Steve Legg, director of risk management for Starbucks.

Starbucks put claims reporting in the hands of its partners, an exemplary act of trust. The coffee company also put itself in workers’ shoes to identify and remove points of friction.

That led to a call center run by Starbucks’ TPA and a dedicated telephonic case management team so that partners can speak to a live person without the frustration of ‘phone tag’ and unanswered questions.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top.” — Steve Legg, director of risk management, Starbucks

Starbucks also implemented direct deposit for lost-time pay, eliminating stressful wait times for injured partners, and allowing them to focus on healing.

For Starbucks, as for all of the 2018 Teddy Award winners, the approach is netting measurable results. With higher partner satisfaction, it has seen a 50 percent decrease in litigation.

Teddy winner Main Line Health (MLH) adopted worker advocacy in a way that goes far beyond claims.

Employees who identify and report safety hazards can take credit for their actions by sending out a formal “Employee Safety Message” to nearly 11,000 mailboxes across the organization.

“The recognition is pretty cool,” said Steve Besack, system director, claims management and workers’ compensation for the health system.

MLH also takes a non-adversarial approach to workers with repeat injuries, seeing them as a resource for identifying areas of improvement.

“When you look at ‘repeat offenders’ in an unconventional way, they’re a great asset to the program, not a liability,” said Mike Miller, manager, workers’ compensation and employee safety for MLH.

Teddy winner Monmouth County, N.J. utilizes high-tech motion capture technology to reduce the chance of placing new hires in jobs that are likely to hurt them.

Monmouth County also adopted numerous wellness initiatives that help workers manage their weight and improve their wellbeing overall.

“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better. We’ve had people lose 30 and 40 pounds,” said William McGuane, the county’s manager of benefits and workers’ compensation.

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Do these sound like minor program elements? The math says otherwise: Claims severity has plunged from $5.5 million in 2009 to $1.3 million in 2017.

At the University of Pennsylvania, putting workers first means getting out from behind the desk and finding out what each one of them is tasked with, day in, day out — and looking for ways to make each of those tasks safer.

Regular observations across the sprawling campus have resulted in a phenomenal number of process and equipment changes that seem simple on their own, but in combination have created a substantially safer, healthier campus and improved employee morale.

UPenn’s workers’ comp costs, in the seven-digit figures in 2009, have been virtually cut in half.

Risk & Insurance® is proud to honor the work of these four organizations. We hope their stories inspire other organizations to be true partners with the employees they depend on. &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]