How Can Underwriters Improve at Marketing? With Underwriting Tools.

Posted by Ivan Maddox on Aug 12, 2015, 7:00:00 AM

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I recently wrote a blog about how the future of underwriting software is now, exploring this AM Best video. One of the things that stood out was that underwriters are going to be more responsible for building and managing their sales pipeline. This is particularly prescient for those underwriting non-NFIP flood insurance because of the impending rush into that market – building strong portfolios will be extremely important because those portfolios will represent an insurer’s initial position in the market. As early adopters turn into the full industry’s arrival, competition will be fierce* for good risks. Differentiation will be necessary for success. (* it will probably be fierce, but not necessarily…but that’s another blog).

The main source of differentiation for an insurer is going to be the flood risk analytics they use. Ideally, those analytics will be based on their own experience, data, and expertise because when everyone uses the same models it is more difficult to differentiate. Quality of the insurance coverage will also quickly distinguish the players.

Maybe not as obvious will be the marketing aspect – the foundational marketing work that defines positioning, target markets; and not the flashy commercials and snazzy advertising. It will be important for underwriters to know where they want to target their flood products, because flood risk varies widely across the country. Plus there is plenty to choose from based on variables such as appetite, expertise with certain regions, quotas/targets, different types of flood, etc.Target Markets, Insurance Tools

Once a carrier has the analytics to understand the risk (ideally by location, and not by zip code or something silly) and how they want to enter the market, they will need to know where the properties are that match their overall product strategy. It is not marketing tools that will tell them where those properties are: it is underwriting software that can deliver these answers.

With a flood coverage product defined, and the risk assessment tools within an underwriting system honed, underwriters can begin to determine where they should leverage their marketing resources. Not only will they be pre-analyzing risks based on where they perceive their strengths to be, but they will look for geographical soft spots where their competition might be weakest (based on whatever info they can scrape together). Turning areas that match a specific risk profile into lists of addresses is now possible, and what better use of marketing budget than targeting specific properties that an underwriter knows in advance will fit nicely into their portfolio.

To do this, underwriters will need systems that are highly adaptable and efficient at combining different types of data into answers they can use. With this type of technology, underwriting software really can drive profitable business for their organizations. As underwriters are expected to take on these newer types of responsibilities, the software they use should be able to handle it, too.

Topics: Floods, Flood Insurance, Insurance Software

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