E-Commerce Capabilities Becoming Critical Industry Tool

As wholesalers and managing general agents (MGA’s), we often serve our insurance retailers by offering contract programs where we have been “given the pen” and are allowed to underwrite and bind business on behalf of a carrier. We also serve our retailers as wholesale brokers, accessing markets the retailer otherwise cannot approach.

Under either scenario, e-commerce is paving the way for wholesalers and MGA’s to write more business with the same staff, with better loss experience for carriers represented, and with more ease of doing business for the retailers.

Today, most all wholesalers and MGA’s have access to the Web and many have launched their own Web pages. Additionally, many prospective insureds also have Web pages that can supply extensive information for underwriters.

Applicants’ Web pages may include the number of employees, number of locations, garaging addresses, or the type of construction a contractor may be doing. Active links to industry Web pages such as: www.cslb.ca.gov or www.safersys.org have given underwriters the tools necessary to research the current status of an applicant as well.

Web pages done by wholesalers and MGA’s can promote the MGA’s corporate image, while providing the added value of “ease of doing business” for their insurance retailers. If there is a current advertising campaign in place it can dovetail its image with the Web page so that a familiar corporate image is presented to the viewers. Advertising on the Web page also allows wholesalers and MGA’s to publish updated lists of current classes recently written, their account size and premium size. It allows the ability to banner-advertise a particular line of business the agency is trying to emphasize.

Broadcast e-mails linking the retailer back to the Web page for more information or to a live contact at the wholesaler or MGA are also great tools currently being used by many agencies.

Even though we’re currently in a firm (if not hard) marketplace, it is taking more than price to sell an account. Quality of the policy form and the financial strength of the carrier are also important, as is the ease of business that is created between the wholesaler or MGA and their insurance retailer.

Many markets require their completed applications to be used. Rather than an insurance retailer having to wait for a wholesaler or MGA customer service representative to fax them a smaller, more difficult to read application, insurance retailers can now go to the wholesaler’s or MGA’s Web page and download a PDF or Word formatted original of any application required. The wholesaler MGA representative can also e-mail the retailer a direct link to a specific application.

For many standardized programs, retailers can now download premium indications online.

Subjectivities must be in place to protect the wholesalers and MGA’s from offering terms their carrier contracts do not support. If care is not taken to put these protections in place, an errors and omissions exposure to the wholesaler or MGA could exist. If the premium indication online allows underwriting staff to review the data input, and approve or decline the indication without bindability being assumed by the retailer, then online quoting can actually help both the retailer by providing quick turnaround, and the underwriter by screening obvious declinations, and pre-underwriting and pricing acceptable risks.

The underwriter can also benefit because important underwriting and rating information is in a form field format application that the retailer would use to obtain their indication. If certain information is not there then the indication request would be denied. This allows the underwriters to receive complete applications. Necessary attachments can be inserted from the retailers as well. The underwriter at this point can now actually e-mail the retailer back a response, i.e. another subjectivity, approval or denial.

Although not all wholesalers or MGA’s are technologically at this point yet, the ability for them to provide this level of automation exists.

As important as technology has become in our business and as efficient as it allows us to get we still need to remember that in any marketplace, hard or soft, the relationships with the retailers and carriers is the bottom line. There must be a way anybody accessing a Web page can quickly and easily abort a function and place a call for assistance. Web pages will not replace employees.

Web-based software combined with agency management systems already can and will grow towards a new infrastructure for our business. Clearly, wholesalers and MGA’s having e-commerce capabilities will become a critical tool for the service, underwriting and delivery of insurance products in the very near future.

Mark Maucere is executive vice president/COO for London American General Agency.

Topics Underwriting Insurance Wholesale