Dallas, TX, July 28 2015-Texas All Risk General Agency, Inc. is celebrating single digit mid year loss ratio trends with all 5 of their commercial binding carriers. The company attributes its continued success to their TARGET Rater platform.
CEO Kelly Davis says, “This isn’t new for us. We’ve been steadily producing outstanding results and the current numbers further demonstrate the strength of our underwriting model.”
A closer look shows about 95% of all their GL is uploaded by their retailers on the TARGET Rater. Carrier executives might have initially worried this would be a comparative rater and that such a comparative Rate/Quote/Bind system would be ripe for abuse-the type of abuse that could amount to loose underwriting which in turn could lead to bad results. Instead, they are finding the opposite is true.
As Davis points out, “First of all, this is not a comparative rater. It’s a comprehensive rating tool. We’re not just showing premium. We’re showing Forms, Rates, Limits, Payment Plans…we even show every sub coverage breakdown of every carrier present. Our comparative focus is on coverage, not price. Secondly, in our case, we’re essentially double underwriting every binder – and we’re doing it even more efficiently than we did under the old model. That’s the beauty of it. As the retail agent inputs the data, it’s being filtered through a highly dependable E-Underwriting matrix in which we’ve accounted for all our carrier’s guidelines as well as our own underwriting requirements…so the initial questions are dynamic by classification and by carrier” says Davis.
Texas All Risk TARGET Rater is designed as a complex logic tree (built to their spec by I-Engineering) accounting for all class codes and guidelines across all carriers. This acts as frontline underwriting. Risks are winnowed down as the retailer enters the information. Maybe one answer turns that risk into a submit for one carrier, while another adds a surcharge or knocks out a particular carrier whose guidelines don’t allow that specific condition, or maybe the risk is rejected right up front. Regardless, for the retailer, within just 2 minutes they see a customized presentation from every TAR carrier who will write the risk.
Okay, then how does that lead to lower loss ratios?
“That’s easy” says Davis, “the agent already knows their quote is rock solid. So if they sell it they don’t mind completing the online app section to get to the upload step. Once they upload – which means they are requesting binding – our underwriters review and compare the frontline quote answers with the backend app section. Then they use that info to be sure the risk fits the carriers appetite. They look for misclassifications and conflicting data. They use public information. Basically, they underwrite the risk for the second time. And remember, these risks have already been vetted and they’ve already been ‘sold’. So our underwriters are spending quality time and energy working on a request we are definitely going to bind unless there is an issue.”
So, in addition to lower loss ratios do you also have higher hit ratios?
“Better than that, we’ve turned the traditional mix upside down! It used to take about 100 quotes worked off an Acord submission just to reach 25 binders. Now we work 100 uploads with no Acord and reject 17. All the rest can be bound.”
This independent MGA is consistently proving it is possible for a wholesaler to create technology solutions to enhance the retailers experience while improving both carrier profitability and their own labor efficiency. So why don’t more MGAs do it?
“Because it’s hard!” Says Davis. “A lot of operators are waiting for carriers to do it for them, and that’s a really bad idea for wholesale distribution. Look, we worked on this for 3 years prior to launch. We started way before most MGAs even thought about it. We even started before most of our carriers offered web services! We knew they would have to offer the data at some point, and now almost all of them do. Atlantic Casualty was the pioneer and they still excel. Nautilus is so good now you would think they invented it. Penn-America came late to the game a few years ago and yet they do everything right at this point. Plus they are constantly improving processes to help the wholesaler with integration. Cap Specialty is also plowing ahead with new web service features and Catlin is developing the services needed for folks like us to offer real quotes with real rates in real time. Thats what the retail agent needs today. It isn’t just convenience, it’s a matter of survival.”
As for turnkey solutions or off the shelf systems, Davis hasn’t seen any yet that deliver web service interface, easy retail interaction and tight underwriting controls. For this type of platform the MGA will have to put in a great deal of hard work and planning.
Press Contact
David Day
Senior Vice President
Texas All Risk General Agency, Inc.
Select General Agency, LLC.
TARGA Premium Finance Company
DDay@allriskga.com
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