AF Group has launched new digital distribution capabilities in collaboration with the insurtech Talage.
The new platform helps agents of its Accident Fund and CompWest units sell more policies to small businesses by streamlining prospect identification and data collection. That market is a target for insurtech innovation because while its participants need strong insurance to withstand the risks of operation, agents are not well equipped to work closely with them and tailor the right products.
"When we were in the process of developing this, we got on the line with many of our agents andtalked about specifically what they're going after and why they're going after the types of business that that they're handling," says Abel Travis, VP of Fundamental Underwriters, an AF Group unit. "And what you quickly came to realize is a lot of those agents have decided not to go after the small business because the customer acquisition cost is too expensive."
The solution, Travis says, was to look at the platform for selling small business insurance and see where automation could smooth the process. Enter Talage, which introduced itself to the AF Group team as a traditional online brokerage. But in the process of working with the carrier, the company decided that rather than insert itself as a distributor, it could license its technology to help existing agents be more efficient. After all, there is still a need for human review of many small-business policies, Travis says.
"While we're making some foundational decisions in regards to the automation in the platform, we still require an independent agent to review and really provide guidance in terms of what that small business policyholder needs," he explains. A big group of small business customers, Travis notes, actually is generally more profitable for agents than a small number of large business customers. "But the only way to effectively grow it is to do it in a digital way that's going to reduce the acquisition costs."
The platform uses a lot of the familiary technology of insurance digital transformation: third-party data calls, APIs, and automation. However, with lots of variation between small business categories, Travis says there's room for AI to enter the mix as well. The company plans to integrate technology from Convr, another insurtech formerly known as DataCubes, to apply AI to some of the initial information taken in from a business in order and identify which of the many underwriting inquiries are most relevant to that business class.
While this project was in development before the coronavirus crisis, Travis says the company is glad to be able to launch it now as restrictions lift and agents will be looking for new revenue in new business classes to replace what was lost during the height of the virus era and while social distancing hangs on.
"Knowing that the percentage of people that were starting their journey digitally: Our focus was never to be a direct organization, we wanted to do was make sure that we support our independent agents through this," he says. "This gives those independent agents that used to really pound the pavement and knock on doors the opportunity to leverage a digital capability to do that acquisition work instead."
