“Looking for a professional agent in the Chicago area who is in good financial shape, wants a long-term relationship, and is seriously into habitational risks. Must be Cubs fan.”
Welcome to match.com for the property/casualty insurance industry. The insurance data wallflower IVANS is emerging from the shadows of the industry, rolling out services that promise to more efficiently match compatible agencies and carriers, based largely on the type and location of commercial lines business they covet.
IVANS thinks its new data-driven “digital distribution capabilities” can help carriers meet new agents and help agents better appreciate carriers and their changing appetites. The new products potentially give agencies and brokers of all sizes tools like ones that the very largest brokers already enjoy.
The rollout of this suite of products signals a new era for IVANS, which has been one of the industry’s biggest secrets.
“It’s always interesting to go into rooms and ask people if they’ve ever heard of IVANS. There’s a pretty decent percentage that say no. Then, if you ask them how their information shows up in their agency management system, they know that happens, but they have no clue who actually does it,” said Matt Foran, vice president and general manager in charge of the new IVANS digital offerings.
“It’s pretty incredible if you think of that story in terms of it is the most connected organization in the industry. It’s gone so well that people don’t think about it. Because of that, over the last two years, there’s really been a push to think about how an organization like IVANS can deliver greater value as a strategic part of distribution.”
Its new digital distribution package has three modules:
- Market Appetite- lets agents find the best markets for their accounts, including carriers they may not now do business with and might decide they want to.
- Market Manager- lets carriers identify and potentially appoint agencies that have business interests that match their own.
- Market Insights- reports based on a proprietary database of premium renewal data that shows what is actually happening with premiums in various classes of business.
Unlike other digital distribution tools, neither Market Appetite nor Market Manager is a digital path between policyholders and insurers. Instead, the aim is to strengthen and increase the connections between carriers and agents.
“Our tool is meant to be enabling,” Matt Foran, vice president and general manager of IVANS Market Appetite, told Carrier Management and Insurance Journal, referring to the release of Market Manager, which is an expansion of the earlier-released Market Appetite.
“If you think about the methods by which this industry works through routing of risks, it’s very much experiential, which is why your greatest tenured brokers are very valuable. They know where to send things, and they have the relationship and trust to get to answers quickly,” he said.
But they are a very small percentage. For the most part, remaining agents and brokers are using a “shotgun method”—sending submissions out to carriers they think might have interest and hoping for the best.
Foran said that is why the declination rate for carriers is somewhere around 60 percent, quoting a figure from EvoSure, the builder of Market Appetite, which IVANS acquired in 2015. Foran said that he believes this percentage of declinations is true from his own prior experience working for insurer Zurich and broker Marsh. He remembers carrier marketing reps showing up with bagels and doughnuts to describe their underwriting targets.
“They could really only tell you about two or three things with limited depth and leave a business card behind that you’d hope to take a note or two on. So when you had that next manufacturing firm come across your desk, you would dig through 1,500 business cards and hope to find the one that said manufacturing on the back,” he said.
This routine is costly for both agencies and carriers.
“Agents, who very much want to do the right thing by their carriers, don’t have a good mechanism to understand at the level of detail that’s appropriate what to send their partners,” he said.
For carriers, the cost of distribution management can be substantial, especially when they are doing state expansions or new industry expansions, according to Foran.
He displayed a sample screenshot of the Market Manager tool for a carrier looking to grow with agencies writing BOP for doctors’ offices in the state of Alabama. The screenshot showed a list of 16 agency names associated with “SIC Code 8011-Offices and Clinics of Doctors of Medicine-BOP-AL,” ranking them based on 19 points of an algorithm. Agencies having greater “density in the space”—measures for which include a higher volume of premium and policies—appear at the top.
“Knowing who to go talk to, especially if it’s a new state, is a very time-consuming, expensive adventure of basically going door‑to‑door and trying to drum up a good conversation,” Foran said.
The Market Manager tool grew out of a good conversation with a carrier looking to grow in a particular segment and state—habitational in Pennsylvania—but not having the best information to proceed. IVANS was able to show the carrier the agencies that were tops in writing habitational in the state.
IVANS developers then asked the carrier, “What is the value of a new appointed agency in three years?” The answer they got back was sizable: $1.5 million in premium.
A single agency appointment won’t produce that much for every carrier. But, according to Foran, a process like Market Appetite designed to deliver up-to-the-minute descriptions of underwriting appetites to agency partners will cut carrier costs associated with unquoted submissions, costs which can range from $100 to $200 each.
For carriers, the high level of “out-of-appetite submissions” is not only an expense issue.
“It also means that [if] these carriers micro-segment their business and become far more intelligent in terms of where their sweet spots are for driving profitable growth, [that] it is nearly impossible for them to use their current methods to drive that message effectively and efficiently to their distribution base,” he said.
The products are meant to simplify how people connect but they are not designed to actually accept submissions or transact business. IVANS will help match up the parties but they’ve got to go on the date themselves.
Previous efforts at transactional streamlining have largely failed, according to Foran.
(The LexisNexis Insurance Exchange was one such attempt at streamlining transactions between brokers and carriers. The Insurance Exchange was shuttered in February, 2013, just three years after it launched as a collaborative effort with Lexis Nexis, The Council of Insurance Agents & Brokers and Marketcore Inc. The attempt came after decades of talk and trials throughout the industry about the need for workable a single-entry platform.)
“[T]here have been many plays at submission platforms. I would argue that all of them have failed sadly. There’s always that rainbow that people are excited about. As a former broker, I can tell you, if you put more work in front of me to get a deal done for a client, I’m not going to do it,” he said.
“What you have to do is create a lot of value with very little effort. It has to be immediately understood. There can’t be training time. It has to be kept up to date and accurate. There has be something in there that the broker doesn’t know. That has been our starting point of creating value on both the carrier and the agency side,” said the IVANS executive, adding that users can, however, expect that these features will become “more and more integrated” into the actual workflows and agency management systems.
“It will more effectively inform the submission process but it will be our goal to not add a lot of weight to that process,” he said.
Market Appetite is free to the 30,000 agents using other IVANS products. To date, 3,500 have already signed up to use Market Appetite.
Foran said IVANS has rights to certain data sets through user agreements that allow it to use information about what’s truly been bound. IVANS has also purchased outside data that gives “actual view of what’s happening versus an inferred view,” he said.
“So our system, on Day 1 when we turned it on, had 1,400 markets available for agents to search,” he said, explaining that some of the nearly 400 carriers represented have multiple operating companies showing up on the system.
The “historical data-driven appetites,” Foran said, “are imperfect…but very powerful.” The power of the tool lies partly in the fact “it’s more up to date” than what they’d get at those occasional bagel or doughnut breakfasts because IVANS runs its algorithms every single day.
A screenshot of the Market Appetite results for “NAICS Code 531110 Lessors of Residential Buildings and Dwellings”—63 markets in total—showed:
- Those markets with a history of binding that type of risk but that haven’t specifically paid to provide appetite descriptions, with a small icon indicating that the risk is within its “historical appetite” derived from transactional data.
- Markets that paid to submit appetite details displayed with a “thumbs-up” or “in-appetite” icon, positioned above the “historical appetite” group on the list.
- Carriers with which the agencies have appointments positioned ahead of carriers they are not contracted to represent in both the stated and historical appetite sections.
Agents can also click further on a market with a stated appetite to see “custom content” that carriers pay to provide, articulating exactly what they want to a greater degree—sometimes with links to portals or to marketing materials and email contacts. One sample carrier in the Market Appetite demo clarified that apartment buildings, garden-style apartments, and 1-4 unit dwellings, as well as assisted living and independent living locations, are within its “residential real estate and habitational” BOP appetite, as are office buildings, industrial parks and self-storage facilities, among other locations.
Foran said agency carriers have not objected to non-contracted carriers showing up when agents look for underwriting appetites that jive with their client accounts.
“We’ve built this as enabling tool, not a disruptive tool,” Foran said. “We feel this is a big step change forward in terms of improving the distribution relationships across the industry, in a good way for both sides.”
He said the point is to empower people so they can go and have the right conversations —agents, in terms of who they send their submissions to, and carriers, in terms of who they should would with to the best distribution footprint for the lines they want to write.
Applied Systems acquired IVANS in 2013, and while Epic, Applied’s cloud-based agency management system, is the easiest to integrate the new tools with, Market Appetite has been integrated in nine agency management systems already. In addition to Applied’s Epic and TAM, it’s also integrated with HawkSoft, Xanatek, eVo, and NASA, for example.
For agencies with systems that don’t have an integrated option, it is available for free through ivansinsurance.com.
Foran acknowledges that the IVANS approach is not totally unique, with a company called RiskMatch and large brokers Aon, Marsh and Willis having built similar systems in recent years. IVANS is clearly targeting the top 5,000 agencies in the country—except the very biggest. These top 5,000 represent about 85 percent of the commercial lines business, according to Foran.
In conjunction with the introduction of Market Manager, IVANs also introduced a tool known as Market Insights, which is an index of data on renewal premium changes. It looks at the same exact policy, year over year, to see how much it moved up or down.
Foran showed two views of the data from this product—one, a line graph showing the percentage rate change for commercial auto policies for each of the last six months (single-digit increases in August through January, with the highest coming in the last two months), and the other a bar chart indicating the distribution of rate changes a single month (a flat renewal for January, in this case, was popular—for 24 percent of the policies tracked).
Both are meant to encourage agents to have better discussions with their clients 90-to-120 days out, he said, imagining an agent messaging that the average industry renewal is 2-3 percent and that anything above 7 percent is outside the norm, and should prompt action to move the business.
Foran believes the index will also give carriers a good idea of what’s happening in the industry in terms of pricing and, like the other tools, drive better discussions between agents and underwriters.
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