Best’s News & Research Service - October 20, 2004 12:00 PM (EDT)
New York Central Mutual Receives E-Fusion Award for Underwriting Management
BALTIMORE //BestWire// - New York Central Mutual Fire Insurance Co. has been named recipient of the 2004 A.M.Best Co. E-Fusion Award for Underwriting Management for its proprietary implementation of ISO's HomeValue system. The application allows homeowners underwriters, agents and third-party partners to access residential replacement valuations through a single Web-based interface.
The award was presented to Katherine Bell, New York Central Mutual vice president, underwriting; Albert Pylinski Jr., executive vice president, chief financial officer and treasurer; Stephen Cembrinski, senior vice president, information and technology services, and Mark VanDewerker, assistant vice president for finance, at the A.M. Best Co. Insurance and Technology conference, E-Fusion 2004, in Baltimore Oct. 19.
"The E-Fusion Award validates everything we've been doing to pull together all types of technology into underwriting, claims, accounting and other areas," said Pylinski. Entering the award competition was a natural extension of attending the A.M. Best conference, which Pylinski has been doing for the past 15 years, he said. This was the company's first entry, but possibly not the last.
"We hope to expand our use of HomeValue to include other tools and additional types of homes," Bell said.
The HomeValue system is prefilled with actual property characteristics for individual properties, so entering an address provides an instant estimate of replacement value in most cases. New York Central Mutual users can also automatically access ISO A-Plus reports, providing seamless access to claims data for underwriting decision making. Another important capability is integration of key underwriting information.
The HomeValue system has increased New York Central Mutual's underwriting efficiency and reduced the possibility of inaccurate valuations due to error or data manipulation. By improving the accuracy of residential replacement valuations, the company is able to charge appropriate premiums. "Underwriting revenues are starting to rise without raising rates," Bell said. Policyholders, meanwhile, have the coverage they need to rebuild and avoid actual cash value loss settlements. Bell and George Davis, actuarial consultant for AIR Worldwide, which worked with ISO to develop HomeValue, presented the system at the conference.
The following underwriting technologies and companies were finalists for the award:
INSpeed: Electronic Application and Automated Underwriting Technology, developed by Baltimore Life Cos. partnering with NaviSys, improves underwriting and issue efficiency by using a call center, electronic application, automated underwriting and voice-recognition signature technology. Baltimore Life uses INSpeed to enroll simplified issue whole life policies for customers between the ages of 40 and 80. A contracted call center completes the application with clients and agents or with clients only when Baltimore Life uses a direct marketing approach. The use of the call center helps avoid market conduct issues because a disinterested third party is asking questions of the potential policyholder, said Gary Voith, Baltimore Life's assistant vice president and director of distribution technology and marketing, who presented the system at the conference. Approximately 80% of the applications are approved at the point of enrollment, using the automated underwriting process. The voice recognition technology makes the transaction paperless.
INSpeed provides a business advantage for Baltimore Life by offering agents and clients an efficient way to enroll, which means faster decisions and quicker commissions. It also reduces policy acquisition costs.
Bristol West Insurance Group's OneStep is a Web-based point-of-sale underwriting system that allows producers to underwrite, quote, issue and service private passenger automobile insurance policies. OneStep reduces policy servicing costs by completing the new business transaction at the point of sale. The system accesses the applicant's driving records, additional drivers in the household and other verifiable underwriting data in real time in order to instantly generate a firm quotation. Upon acceptance, it produces all required documents, such as the policy, identification cards and policy declaration page. OneStep also allows "what if" scenarios by rating different limit and deductible combinations before generating the quote.
OneStep provides lower costs through once-and-done underwriting, improved customer retention and fewer cancellations caused by an increase in rates because of the discovery of new facts. Since the implementation of OneStep, policy renewal percentage has risen to 72% from 66% and cancellation percentage has dropped from 52% to below 40%, said Robert Sadler, senior vice president, marketing. Sadler and George Christensen, senior vice president, product integration, presented the system at the conference. Bristol West developed OneStep in cooperation with OneShield.
Businessowners WEB Quote/Issue, developed by Columbia Insurance Group with support from TANNIN Technology Ltd. and Key Management Group, allows an agent to quote and then submit a policy for issue without having to refer to rating or underwriting manuals. The application uses rules-based underwriting and referral intelligence to quote and issue, recommend or refer a risk to underwriting. The initial rollout was for Retail business owners policies, to be followed by Contractors and Garage BOP. Once submitted, the application is automatically loaded into Columbia's policy processing system. If there are no underwriting referrals or recommendations, the policy can be automatically posted to the production system and a declaration page with all required schedules and attachments can be printed for distribution. "Turnaround time has gone from five days to one. We've had an 8% increase in our quote-to-issue ratio," said Robert O'Reilly, vice president and branch manager for Columbia. O'Reilly and Victoria Schamberger, application services manager, presented the system at the conference.
Businessowners WEB Quote/Issue will improve the long-term profitability of Columbia's BOP products by establishing a uniform corporate underwriting approach to this line. It also reduces corporate expenses by automating the risk selection process and minimizing underwriting involvement.
IMT Insurance Co.'s U-Assist is an automated underwriting system that enables agents to quote and issue new automobile policies as well as changes to existing automobile policies. If applications submitted through IMT Online do not meet initial guidelines, they are sent to the U-Assist system for underwriter review. The review process is typically completed within a few hours and the application is submitted. This allows for all types of auto policy transactions and streamlines the communication process between IMT and the agent. The system is built to dynamically generate additional underwriting questions based on the type of application.
IMT receives 100% of its personal auto new business and amendments via IMT Online, which has had a significant impact on its personal lines underwriting department. The company has increased personal auto direct written premium per employee by 20.5%, while allowing fewer underwriters to handle more premium. "We've reduced our underwriting staff by 12%, reduced overtime and achieved consistent analysis of risk exposures," said Jeff Wilson, operations manager for IMT. Wilson and Ann West, senior manager for systems development, presented the system at the conference.
Developed by RLI Insurance Co., eSubmissions is an intranet application for field underwriters to clear submissions; quote, rate and bind new and renewal business, and perform subsequent policy activity such as endorsements and cancellations for multiple lines of commercial property/casualty business. All of the business coming into the company is processed through this application. Soon after a policy is bound, back-end systems are automatically interfaced and are ready for billing. This translates to immediate cash for the company by collecting the premium earlier than before. The system provides benchmark rates which allow underwriters to target their rates and management to monitor the variance between the benchmark rates and targeted rates.
The company also provides a better correspondence system with brokers, reinsurers and intermediaries via fax or e-mail, which reduces operating costs. Objectives that the application has fulfilled include a single interface, point of entry and source of information; consistency; automated form selection; elimination of redundant entries, and ability to change according to market conditions, said Murali Natarajan, RLI's director of systems development, who presented the system.
The awards were judged by Michael Edwards, chief information officer, American Skyline Insurance Co.; William Jenkins, CPCU and insurance technology consultant; Matthew Josefowicz, manager, Insurance Group, Celent Communications; Robert Litt, partner, KPMG LLP Information Risk Management; Chuck Johnston, director, industry marketing, Callidus Software; Thomas A. Meyers, senior vice president and chief financial officer, New Jersey Manufacturers Insurance Co.; and Philip Roeper, chief information officer and senior vice president, American Re-Insurance Co. In addition, the A.M. Best Co. executives who participated in the judging were Paul C. Tinnirello, executive vice president and E-Fusion conference chairman; Lee McDonald, vice president and E-Fusion program chairman; and vice presidents James Snee and Rita Tedesco.
(By Sally Whitney, Editor, Best's Review: Sally.Whitney@ambest.com)