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Furtado: Quest for the Holy Grail in Workers' Comp

By Karen Furtado

Thursday, November 15, 2018 | 336 | 0 | min read

Quotes from only five data points, or even fewer? Name your number, and you can find an insurer looking to transform the sales experience to match.

Karen Furtado

Karen Furtado

We have seen a great deal of this momentum in personal lines with increasing attention in small commercial lines. And the line of business delivering today is workers’ comp.

Insurers writing workers’ comp — including insurtech startups — are innovating in many areas, including quoting, servicing, claims and the overall customer experience. There is high potential for emerging technologies, including artificial intelligence and wearable devices, to enable these advancements and tremendous benefits to be gained from external data sources as well as the untapped data already within an insurer’s systems.

Together, these circumstances have created fertile ground for innovation.

Both established and greenfield insurers are taking advantage of the possibilities that advanced technologies bring to the workers’ comp sector. This year’s SMA Innovation in Action Awards gave us two excellent examples of how both types of companies are approaching these new opportunities — in the digital MGAs Cake Insure, which was incubated by Pinnacol Assurance, and Pie Insurance, a greenfield venture. They demonstrate two different approaches to the same goal: leveraging new technologies and external data to create a seamless digital experience for customers.

Pinnacol Assurance is a workers’ comp insurer that is more than 100 years old. It wanted to reinvent the purchasing experience for workers’ comp by emphasizing digital and leveraging new technologies such as AI to condense the entire process into five minutes or less. Cake Insure, a digital MGA, is the result.

Cake’s online platform gives consumers a responsive, mobile-friendly experience that requires only a few data points to generate a quote. An AI-driven policy classification engine uses natural language processing and machine learning to enable straight-through processing for more than 90% of new policies.

This technology enables Cake customers to simply enter a description of their business in their own words to get a quote, with no industry jargon or class codes required. Certificates of insurance can be generated and shared immediately via the Cake client portal or email. Cake’s success demonstrates how an established insurance company can embrace greenfield thinking and reinvent the customer experience.

Greenfield insurers and MGAs are also pursuing the transformational possibilities of workers’ comp. Pie Insurance is a full-stack digital MGA for Sirius Group that set out to change the workers’ comp market for small businesses, an underserved and often overcharged business segment.

Pie uses predictive analytics and high-quality data sets in real time to give small business owners a seamless, mobile-friendly way to find the coverage they need at the right price.

According to Pie’s proprietary data, 80% of small businesses overpay for workers’ comp, often by as much as 30%. The company provides consumers with a detailed breakdown of the coverage and pricing that is appropriate to their risk and offers an online quoting experience that is as easy as getting an online quote for personal lines insurance. The savvy use of third-party data combined with predictive analytics gives Pie the ability to quote a new workers’ comp policy in minutes.

These companies are simply two examples of how the workers’ comp market is transforming. Both established and greenfield insurers and MGAs are making headway in this area. We can expect further changes to come as insurers find even more ways to bring new technologies to bear on the customer experience. So, stay tuned.

Karen Furtado is a partner at SMA. his blog post is reprinted by permission from InsuranceThoughtLeadership.com.

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