When insurance underwriting cycles turn sour, as they inevitably do, industry experts are quick to criticize the industry for not following strict underwriting guidelines. The easiest solution for insurers to turn a "soft" market around is to raise premium rates, but some carriers, such as Fireman's Fund Insurance Co., are revamping their underwriting systems to improve underwriting consistency and discipline.As part of a broad initiative that includes reorganizing its field force of independent agents and developing an enterprisewide approach to IT systems to support a cohesive distribution strategy, the Novato, Calif.-based carrier will implement the Accenture Underwriting Components Solution. The Web-based platform uses diagnostics and rules-based technology to help improve underwriting efficiencies.

The goal of the underwriting initiative is to streamline the process and make it consistent across all lines of Fireman's book of business, which includes personal, commercial and specialty business. The company intends to complete implementation for commercial lines in mid-2005 before moving on to the other lines.

Agent input

"We want to make sure that agents can submit information quickly and consistently, and that we can process it and rate it quickly," says Fred Matteson, Fireman's CIO. "We're looking at workflow and rules to make sure that as we define our risk appetite, we can write the business consistently across our 14 enterprise distribution regions and we can present the information back to agents consistently and quickly."

Fireman's will be testing its reconfigured systems and workflow with selected agents. "We're establishing agent model offices so that we can define what information will be transferred from agency management systems to Fireman's Fund, and help define the rough spots in agents' workflow," Matteson says.

Coherent experience

Gail McGiffin, a partner in Accenture's insurance industry group, says that Fireman's Fund is seeking to simplify technology for agents so that they have a "coherent" experience when interacting with the carrier through call centers, agency management systems or through Web sites.

It's the same approach that Fireman's is extending to underwriters. "Having a single underwriting front end for rate, quote and issue across all lines of business is very advantageous," she says.

Fireman's wants its agents to understand the breadth and depth of a customer's relationship with the carrier. To that end, Accenture's technology will provide an integrated underwriting "folder," a centralized repository of information that McGiffin says should assist cross-sell capabilities.

The solution should also help Fireman's Fund segment and evaluate risk more effectively.

"We hope to achieve higher quality premium and more premium," Matteson explains. "It will help (agents) understand the risks that we're interested in writing."

Ultimately, Matteson says, Fire-man's Fund hopes its broad initiative will lower its expense ratios. "We will conduct an overhead value analysis to determine if something adds value, and if it doesn't we'll eliminate it," he explains.

"There also are some consolidation opportunities where we can move some regional operating and processing centers to centralized locations. And, by consolidating and re-engineering our systems, we hope to achieve best-of-breed operational capabilities in our back office, which will provide a long-term payoff."

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