A former agency owner once explained wholesale to me as “plaque." If you eat, you develop plaque. You have to go to the dentist to get rid of the plaque, but no one likes going to the dentist. We go because we have to. Similarly, no one likes placing excess & surplus business. But they have to use the market when a client needs a solution.
Today, E&S might be more important than ever given market conditions, the growing complexity of business and risk, climate change and the continued growth of economies around the world. More plaque. Fortunately, many of these challenges can be addressed with thoughtful technology solutions.
Owners, producers, customer service representatives (CSRs), underwriters, and account managers tell us that the lack of digitization and connectivity has been holding carriers, agencies and customers back—and that there is room to improve on the high costs and inefficiencies endemic in the typical E&S transaction model.
An E&S submission email might get ping-ponged around several different desks at a wholesaler before it gets to the right person to work on quoting it with even one carrier. Meanwhile, the agent sits and waits to hear back.
Conversely, in a model where these carriers are connected and accessible, the process is reduced to a single submission with a transparent and clear response on the next steps. Technology doesn't just centralize access, it can make the entire process easier and more transparent.
While most of the E&S market will move online, connectivity and user experience innovation are really taking hold. Binding authority and the efficiency it offers from a process and staffing perspective is not a new phenomenon. However, because it's the part of the market that the carrier has traditionally set up to delegate or outsource underwriting to an intermediary, it's also primed for algorithmic underwriting. This gives wholesalers the control to craft intuitive and easy-to-use technology, which offers both agents and carriers more visibility, control and data on transactions.
Binding authorities are moving toward following centralized guidelines, focusing more on differentiation in distribution, user experience and aligning coverage with client needs. Underwriting guidelines are essentially rules-based algorithms that can be put into software to allow agents and wholesalers to receive pricing and coverage options in real-time.
Agents get an efficient, dynamic interface to run through those rules, giving them a fully digital experience. Changes can be tested, implemented and deployed quickly.
Using the software, submitting E&S accounts can be a simple and transparent process. Forms can be auto-generated without tedious, repetitive data entry. Quotes can be accessed instantly upon completion of a simple online application. And, even if a particular risk can't be automatically quoted, agents can instantly find out if carriers will refer or decline the risk. This type of approach will help agents navigate the E&S market and better leverage it when clients need non-admitted or specialty options.
Ultimately, this is pretty simple: Technology reduces the time spent processing E&S accounts while also making it easier to close and service. In other words, it gets rid of that plaque as effortlessly as possible so you can get on with your day.
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