Dallas, TX, December 9, 2015- 2015 has been a big year for mergers and acquisitions in our industry. You read consolidation news everyday…Willis to buy Towers Watson…Confie acquires another broker…Gen Star purchases All Web Leads…All Web Leads purchases Bankrate’s Insurancequotes.com…it’s an ongoing story.
News of innovations, economies of scale, exciting new platforms; and the focus always seems to be on admitted markets.
Yet the surplus lines market continues to offer healthy commission checks to lots of retail agents! The non-admitted market doesn’t grab many headlines, but maybe it should. In some cases the technological improvements of MGAs are a giant leap forward for retailers. We’re talking about major advancements in transactional times – big reductions in the number of touches – whole new scales of efficiency on small and medium sized commercial risks.
Web Services is the key. You can forget the old axiom about Surplus Lines carriers being 10 years behind the admitted market. Some of the best surplus carriers are rapidly closing that gap! But not many MGAs are taking full advantage yet, and retailers remain tied to the older model mainly because very, very few wholesalers have invested in the tools required to modernize surplus lines.
One MGA stands out as the prototype for future Wholesale operations. Texas All Risk General Agency, Inc. (TARGA) has created Do-It-Yourself retail solutions for surplus lines that were unimaginable a few short years ago. Their TARGET Rater – fully integrated with respect to underwriting, workflow, accounting and issuance – is designed to give real-time, fully underwritten, bindable quotes from multiple carriers simultaneously – while protecting the carrier more efficiently than ever before. By using web services data for all their binding classes, Texas All Risk improved their quoting speed by 80% while double-underwriting everything they bind. Thus they’ve radically improved services to both retailer and carrier. This is an excellent example of modernizing surplus lines.
For all their carriers, the first layer of underwriting occurs during the retail quoting process. The MGA created software to incorporate all the binding carrier ‘s guidelines for all binding authority classes. The retailer enters the data. If it doesn’t fit, it’s weeded out right up front. If an agent sells a quote, the subsequent online application features redundancies in gathering risk details – this additional info is used in the second layer of underwriting as it is compared and verified against the original. Proper classification, accurate premium basis, recent projects, and loss history are some of the considerations TAR underwriters make before signing off on a policy.
For most retailers, Do It Yourself commercial quoting – in real time – is still a novelty in the surplus market. But it shouldn’t be. General Agents like TAR are offering a brave new world of surplus lines access. In the old model, if retailers want 5 non-admitted quotes, they would submit 5 sets of Acord forms to 5 MGAs and hope against hope that all 5 returned a quote within a few days! That’s they way it’s always been. But as Texas All Risk has proven, it doesn’t have to be that way going forward!
Retail agents are often looking to improve their bottom line through cluster arrangements, aggregators, comparative quote models; yet the best tools for efficiency and profitability just might come from their regional MGA. 2016 promises to see even greater technological improvements in the insurance space. But if you’re waiting for surplus lines to modernize, take a look at the TARGET Rater and you’ll find it already has.
Texas All Risk TARGET Rater is a proprietary system, designed in-house and built by I-Engineering.
The TARGET Rater offers Commercial GL, Commercial Package, Homeowner’s and Manufactured Homes. Commercial Carriers featured are Atlantic Casualty, XL Catlin, Cap Specialty, Nautilus Insurance and Penn-America.
Topics Carriers Texas Agencies Excess Surplus Underwriting Insurance Wholesale
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