Though personal lines innovation gets a lot of attention, other lines of business are ripe for digital transformation as well. That's what John Swigart is counting on at his new company, Pie Insurance.

Swigart, the former CMO for Esurance, decided to take on the worker's compensation insurance sector with an eye toward helping small-business owners who want to be able to purchase the coverage digitally.

John Swigart of Pie Insurance introducing his company at Insurtech Connect in Las Vegas Oct. 4, 2017.
John Swigart of Pie Insurance introducing his company at Insurtech Connect in Las Vegas Oct. 4, 2017.

"Small businesses are overcharged in worker's comp relative to their risk profile," Swigart said in an interview after announcing the company at Insuretech Connect in Las Vegas. "The core of our customer base will be those that pay less than $5,000 per year for workers comp -- that's most small offices up to about 15 employees.

Through a partnership with Valen Analytics, Pie will be able to more closely match small businesses' premium to their actual risk, Swigart explains. He says that data shows small businesses have fewer worker's compensation claims when monetized for the size of their payroll, but owners are unable to shop around too much because of the labor-intensive nature of getting the coverage.

"Small businesses have meaningfully lower claims frequency" that emerges from Valen's data, he says. "We think we can deliver them an easy, direct experience. There is essentially no direct distribution for small businesses in commercial lines, but even less so for worker’s comp."

Pie is planning to launch in its first state, Illinois, in March of next year. The company will distribute mostly through a web site, but also through digital partnerships with other organizations and online brokers like AP Intego. To build hype for its launch, the company is already using its data and analytics infrastructure to build a price-predictor tool on that site, which will tell users how low their premium could be if they switch to Pie when it's available.

"Leveraging Valen data and analytics, we’re building our pricing program off that data," he says. "When people go through the predictor it shows them the Pie rate and the market rate, and customers can fill out a form to contact them when we are in their state."

Pie's core system environment is built on Insurity's platform. Insurity acquired Valen earlier this year.

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