Until recently, the homeowners’ insurance underwriting process at CIO 100 honoree Bankers Financial was relatively rudimentary. A potential customer called an agent. The agent asked seemingly endless, sometimes odd questions (“Does your dog bark? Is it ferocious?”) to get a picture of the individual, the property and the potential risk.
Working with multiple applications, the agent arrived at a quote, which might or might not be competitive. Assuming the potential customer liked what he heard, the business went to underwriting, where, after all that, it might be declined for failing to meet risk guidelines.
Then came a new insurance group president, a new CIO, and a new vice president of business intelligence and analytics, all of whom were convinced that advanced data analysis could transform the way Bankers Financial approached its homeowners’ insurance business. The company could deliver better customer experience and better prices—not to mention better margins—if it had better analytics, says CIO Jim Albert.
Indeed, there was a better way.
IT collected internal and external data on every home in Florida, where the company is headquartered. Using analytics tools, the team created a system for predicting potential losses from catastrophic and non-catastrophic events on a specific property, cross-referencing that with the profit margin Bankers Financial seeks and coming up with a premium. For the first time, agents could access one-click, pre-underwritten quotes.
“All the agent had to do was ask for the address,” says Sai Giridharan, vice president of business intelligence and analytics. Not only is it fast, but the software predicts whether a price is competitive enough for the prospect to take.
The system also gets better over time. “In the past, [the underwriting and quote processes] were only as good as what had happened over five or 10 years,” says Giridharan. The new system “is constantly recalibrating based on each risk that comes in.”
Winning Over Skeptics
At first, the new system wasn’t welcome. “We had a few champions early on and lots and lots of skeptics,” says Albert. IT worked with pilot agents in certain counties. As they became comfortable using the system, the marketing group launched communication programs and set up meetings to discuss the experience.
Ultimately, it was the results the pilot agents talked about that won over the others. Then everyone wanted it. “It took proof, not just persuasion, to have this take off like wildfire,” says Albert.
A year in, the system has proven highly accurate, according to Albert. Bankers Financial has seen a 300 percent increase in quotes for homeowners’ insurance. IT is now developing models for other states. Then they’ll move on to other product lines, he says, like the more complex commercial business. “We’re a small example of the power of big data,” says Albert.
As analytics usage expands, the company’s philosophy will be the same, says Giridharan: “To predict more accurately that every single bit of business coming in the door is profitable.”