Towers Perrin Integrates Powerful Tech Tools Into P&C Carrier's Critical CAT Underwriting, Claims
After all, severe CAT loses over the past several years have become the most imposing threats to solvency, much less profitability, for property and casualty carriers.
Considering that scenario, it's no surprise that the folks at United Fire Group (UFG), a successful multiline carrier based in Cedar Rapids, Iowa, are extremely positive about two recent additions to their decision-making arsenal--CATographyTM Underwriter and Claims, part of a spatial analysis suite from Towers Perrin risk and financial services.
The risk and financial services experts at Towers Perrin, the global professional services firm based in Stamford, Conn., provide reinsurance brokerage, consulting and software solutions to help clients improve business performance and create value from risk. UFG protects policyholders subject to loss from hurricane, severe convective storm and earthquake. As a result, the two companies have formed a successful partnership in understanding and managing the risk UFG (unitedfiregroup.com) faces in its book of business.
The CATography platform was developed by Towers Perrin through a third-party developer, Localligence, a business intelligence and data visualization company, but it also included detailed input from UFG and other clients regarding the functionality that was needed to meet the most pressing P&C business objectives.
"The customized implementation with UFG was based on a true collaborative effort," says David Langdon, principal, Towers Perrin Reinsurance Brokerage. "CATography Claims and Underwriting will be used by UFG as part of a comprehensive catastrophe risk management plan. One of our primary goals was to build a product that moved mapping capabilities from a centralized department out to the end user so that the benefits of interactive maps could be more fully realized."
According to Al Sorensen, Vice President, Corporate Underwriting, at UFG, CATography Underwriter is being integrated into UFG's policy processing system, saving time and providing consistency in the application of underwriting guidelines. Simply, CATography Underwriter provides underwriters with information critical to catastrophic risk evaluation at a location, including results from a leading catastrophe model and additional hazard data.
"We especially like the inclusion of intuitive maps and scorecard reports," Sorensen says. "Our underwriters now can quickly evaluate whether a risk complies with underwriting guidelines or whether additional research is necessary for a particular hazard. It's a very effective tool to manage catastrophic property exposures at time of quote and/or policy issuance."
Sorensen explains that CATography Underwriter is not an "out-of-the-box" product to which client companies must adapt. Rather, Towers Perrin customized its software to interface/integrate with UFG's policy processing systems and purchased hazard databases.
"That means no required re-entry of captured location information," he says.
In addition, Towers Perrin developed an innovative dashboard screen that provides underwriters with a hazard exposure summary, an average annual loss estimate, mapping of the subject location and surrounding exposures insured under other policies, and various modes of aerial imagery.
"Our business rules have been incorporated into the hazard analysis display in the form of a stop light (red, yellow and green), alerting underwriters to specific hazards that require further review and/or supervisor review," Sorensen says, adding that this was more efficient than previous analyses done manually. For example, reports for hazard analysis of location addresses were done individually via re-entry of data on a vendor's Web site.
Sorensen says one of CATography Underwriter's strongest features is it provides an underwriter with all the tools necessary for analyzing property exposures at a street address level.
"It really increases underwriter productivity, allowing underwriters to focus their attention on those buildings or locations that model poorly from a catastrophe standpoint, or exhibit high-risk hazards as defined by management," he says. "Accordingly, price, terms and conditions can be adjusted or the risk can be declined."
Moving to the claims side of the house, Tom Lanz, AVP-Director of Claims Administration, says that CATography Claims will provide claims managers with the tools they need to better manage claims in the wake of a natural or man-made disaster.
"The user will be able to view real-time updates of information for an event overlaid on maps showing existing policyholders," Lanz says. "This will enable the claims manager to determine the number of adjusters that are needed and assign adjusters to policyholder or geographic regions based on expertise."
Prior to CATography Claims, UFG was using in-house ZIP code runs to determine policy locations and exposures in a given ZIP code. "It was not very efficient," Lanz says.
According to Lanz, CATography Claims' main advantage is the ability to use it as a Web-based application, allow adjusters, supervisors, managers and CAT coordinators to access policy information from virtually any location. As noted, CATography Claims also gives UFG claims a way to focus on claim assignments to a specific area, delivering more efficient use of the adjusting staff.
"We can model exposures as a potential hurricane approaches, which means we can advance plan on where we will deploy our staff to work on the storm claims immediately after the event," he says.
So far, Lanz says UFG's work with CATography Claims shows the product to be "very intuitive," and that the implementation, which was combined with CATography Underwriter, was carefully designed to assure a smooth transition.
"In a highly competitive market, any tool that helps us improve our adjusting efficiency means we can stay ahead of the competition," Lanz says. "Plus, the sooner we can get into a storm area, the better we can service the needs of our policyholders."
Lanz notes that while the dollar savings are hard to quantify, UFG believes CATography Claims gives the company a significant competitive advantage in claim handling of storm losses and delivering service to policyholders.
"The earlier we have the opportunity to inspect and adjust claims, generally these claims are settled at a more reasonable level," he explains. "We also can get our insured started sooner on repairs, thus stopping further damage from occurring due to unusually long delays in making emergency and final repairs."
Lanz emphasizes that determining how many adjusters to commit to a storm area has always been tricky.
"It's always been frustrating to a CAT coordinator to make sure each individual adjuster's assignments were within the same relative geographic area," he says. "This allows us to concentrate each adjuster's assignments to a specific area, cutting down redundant or inefficient travel between claims." For example, if an adjuster is on one building and knows that the building next door is also insured with UFG, it is a simple matter to handle both claims at the same time rather than possibly having to make two trips or have two separate adjusters on two separate but side-by-side loss locations.
According to Towers Perrin's Langdon, CATography Underwriter and CATography Claims give UFG the power to implement spatial analyses throughout its organization, helping end users--from risk managers to underwriters to claim adjusters--to fully appreciate how their decisions impact both customer and the company bottom line.
On the technology front, Langdon says, the CATography suite of applications is made up of Web-based tools that use the latest .NET Framework, along with a number of Web 2.0 (AJAX) type controls. The mapping and geocoding engine is provided by Microsoft Bing Enterprise (previously known as Virtual Earth.)
"We have had a successful long-term relationship with Towers Perrin," says UFG's Sorensen. "They originally provided us with a product called CATography Risk Manager that worked well for us. CATography Claims and CATography Underwriter are natural innovations created from that product."
For more information on how CATography can help your company, contact David Langdon, (860) 843-7006.
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October 7, 2009
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