Web Services Turns Hit Ratios Upside Down for Surplus Lines MGA.

Sponsored Content By | June 30, 2015

Dallas, TX, June 30 2015–To use a baseball metaphor, Texas All Risk General Agency (TAR) is batting .725 with Atlantic Casualty Insurance Company at the mid-year point.

According to TAR VP David Day, “With the All Star Game approaching our top performers deserve recognition. Year to date, our greatest number of TARGET Rater uploads goes to ACIC. And the 72.5% bound rate definitely earns a spot in the starting line-up! Of those not bound, 18% were declined by us for underwriting reasons.”

ACIC was one of the earliest adopters of Web Service solutions in the Surplus Lines space; as was Texas All Risk. The MGA created The TARGET Rater: An agent accessible proprietary platform with built-in underwriting guidelines for all of Texas All Risk’s carriers and all binding authority class codes – Commercial and Personal Lines. Retail agents use the platform for fully developed instantaneous quotes and presentations. TAR’s underwriters get involved after the agent requests to bind. “Our idea from the beginning was to turn our binding ratio upside down and we’ve done it” says Day.

They developed the idea in 2009 and hired I-Engineering to start building it to specification in 2010. Its design is also integrated across their agency management system for maximum efficiency.

Day says, “ACIC has tremendous presence in an active construction state like Texas. We are lucky to have 5 outstanding binding authority partners, and thanks to our technology our binding percentages are roughly the same for everyone. ACIC excels in the GL classes. And combining their appetite with our TARGET Rater platform has made smaller premiums faster and more efficient for the retailer – which in turn makes them more profitable for the MGA and retailer alike.”

Unlike most MGAs, TAR isn’t just giving an online indication. The company believes that an indication minus underwriting is not a real quote; “it’s just an extra step and an aggravation for the retailer.” Their system provides the retailer with web-service interactivity in real time. The underwriting happens upfront when the retailer enters the data. The risk is pre-qualified before the data call from TAR to carrier ever takes place. Thus, the retail agent, in just minutes, gets multiple quotes from multiple carriers. In addition to Atlantic Casualty, other binding carriers represented are Cap Specialty, Catlin Specialty, Nautilus and Penn-America.

When asked how much of the company’s premium is written through the TARGET Rater, President Kelly Davis says, “It’s been steadily growing and right now it’s just under 80%.” She is also quick to point out that good underwriting is still good underwriting – and the TARGET Rater in no way diminishes her company’s efficacy at protecting her carriers. “We underwrite more closely, more strictly now than ever. That’s the beauty of this design. When the upload gets to us, the agent already has a buyer. Now we can look at each risk even harder. The old accepted MGA model had us quoting 100 submissions to bind 25. Now we underwrite 100 pre-qualified bind requests and we end up binding 72% of them. We usually reject about 20% for underwriting reasons and the rest end up being the inevitable retailer or insured issues.”

Like Atlantic Casualty, Texas All Risk had the foresight to modernize. As David Day says, “5 years ago we could see the game was going to speed up. We wanted to give the agents the tools we knew they’d want in the 2nd decade of the 21st century. And frankly, we firmly believe it’s the MGA’s responsibility to modernize their value-added proposition to both carrier and retailer alike. I think it’s a scary thing for a lot of MGAs. Systems like ours are tough to build and it takes a long time, but that’s our job! We signed on to deliver the carrier’s product down the wholesale pipeline to a retail agent…and if every aspect of that retail agent’s commercial world can be handled online except his or hers surplus lines policies, well, it doesn’t take an Eastman-Kodak executive to see where that road leads.”

(Texas All Risk General Agency, Inc. founded in 1983 is a surplus lines MGA serving Texas, Louisiana and Oklahoma.)

Press Contact
David Day
Senior Vice President
Texas All Risk General Agency, Inc.
Select General Agency, LLC.
TARGA Premium Finance Company
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