Recently, ITC President Laird Rixford received an important question in an online forum. The question, 'Who decides the questions used to quote a personal lines risk? The carrier or the comparative rating vendor?' For the answer, I first need to give a little background.
Comparative rating systems have been in existence since the early 1980s. Long before carriers offered agent portals, comparative raters calculated insurance rates for multiple carriers. While most carriers now provide online quotes, agents still want to get multiple quotes.
Not only does this process increase the agency's efficiency, it does much more. It reduces data entry errors, provides a consistent quoting process, and consolidates quote data. Agents have better insight on quoting behaviors and risk profiles when they store data in one place. Also, one database ensures that a client's personally identifiable information is adequately protected.
To create a comparative rater, we reviewed each carrier's rating criteria. Based on this assessment, we created one interface. The interface includes the most common questions carriers require to rate a risk.
The insurance industry is evolving. Carriers want to offer competitive yet profitable rates. So they expand and fine tune their rating requirements. We monitor rating regulations and trends. Based on how the industry evolves, we then add fields to our quote workflow.
This is how we decided to convert TurboRater from a desktop- to a web-based system. A web-based platform lets us push out updates, daily if needed. These automatic updates mean agents don't have to do manual updates. This also ensures accurate rates based on the carrier's latest rating requirements.
Our challenge is keeping the questions in our comparative rating system relevant and up-to-date for agents. In designing the interface, we have to think of our agents and create a product that is helpful to them.
Okay, back to the question at hand. Who decides which questions to ask? It is a two-way conversation between us and the carriers we work with. Carriers have their own requirements. But we also have specific rating expertise. Over the 30-plus year history of TurboRater, we have worked with thousands of carriers.
A carrier begins the process of adding its rates to our comparative rater by working with a carrier relations director. Each of our directors has been a successful independent agency owner at one point in his career. This condition ensures our agents' needs and desires are part of the process.
The director interviews the carrier to find out its target market, risk appetite, value proposition,
Once the interview process has concluded, we request several documents from the carrier. One such document is their rating specifications or specs. Carriers provide these specs to every rating vendor they're interested in working with. The specs will outline information like product offering, field descriptions, acceptable field values, mandatory fields, optional and state mandated, required legal disclosures, discounts and surcharges available, pay plans available, and more. These are the same guidelines you have to follow.
Armed with this information, we begin the development process working directly with the carrier. Our number one goal is to provide accurate rates to our agents. We know firsthand how critical it is to get accurate rates. We also know the importance of getting competitive rates quickly.
Once development is complete, we assign the carrier to a quality assurance person. He or she tests rate accuracy and speed, discounts and surcharges, and underwriting rules. Like our carrier relations directors, many were prior insurance agents. They have experience selling insurance and understand the day-to-day operations and workflows of agents.
When our testing is complete, we then require carriers to test the rates themselves. To do so, the carriers get access to our comparative rating system. Their testing involves going through the exact process an agent would to get a rate in TurboRater. This way the carrier is aware of the questions asked and available selections.
After everyone signs off, we release the rates to the field. But, our job is not done.
Our technical support staff is available six days a week to our agents. We also track the speed to return the rates. This helps us ensure agents are operating at the level today's insurance consumer demands. Our carrier relations directors also reach out to their carriers on a regular basis.
All in all, the process of choosing the questions used to quote a risk involves many people. Both the carrier and our team know the process and have the agents' best interests at heart.
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About the Author
AnMarie Bozick, CIC, manages ITC’s rating products, including TurboRater and TurboRater for Websites. She has more than 20 years of property and casualty insurance experience, including owning her own agency and serving as president of the Alliance of Insurance Agents of Texas. She joined ITC in 2008.More Content by AnMarie Bozick, CIC