Harnessing technology to transform executive risk insurance

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Executive liability insurance — management, cyber and professional liability — has historically been difficult for buyers to understand and challenging for brokers to sell. From underwriting to quoting, coverages like D&O and EPLI policies traditionally have resided in complex and time-consuming processes, but emerging technologies are transforming and simplifying these critical lines of commercial insurance.

The executive risk liability market has seen huge swings in premiums and carrier appetite, often making it hard for brokers and clients to know what to expect and where the best options for their insurance programs are. Indeed, the Insurance Office of America has predicted that the 'roller coaster ride of D&O rates may persist' and the Independent Insurance Agents and Brokers of America (Big I) published a report in late 2023 stating, 'The D&O market is dynamic and ever evolving, and independent agents involved in this segment should consider how they can continue to make sure customers have the insurance protection they need.'

All parties in executive liability insurance — insurers, brokers, and buyers – reference the slow and resource-heavy process of transacting these lines. It can take brokers two weeks to receive a quotation. This traditional experience has negative consequences for all: businesses may operate without adequate protection for their everyday risks, agents and brokers incur higher expenses, and underwriters miss opportunities to quote and bind more business.

Anzen Insurance is a technology-enabled wholesaler, specializing in executive risk, including D&O and employment practices liability, that is using technology to transform the purchase and make life easier for clients, brokers, and insurance carriers.

When listening to brokers, clients and insurers, it was clear there were several areas where technology could be brought to bear to make the process simpler, more efficient and quicker.

The pain points we identified with the most opportunity for digital innovation were:

●        The number of separate carriers, wholesalers and systems that brokers need to reach out to.

●        Inconsistency of information and the format of quotations provided.

●        Slow turnaround times due to employee workload.

●        Carriers receiving proposals from brokers/wholesalers that require significant additional work to underwrite them effectively.

●        Not knowing where in the process the quotation is and how long it will take.

By addressing these pain points one by one, we proved it was possible to digitally transform one of the more labor-intensive insurance processes by:

●        Developing a single system that can market risks to A list carriers, returning quotes in under 48 hours and enable brokers to easily bind them.

●        Working with carriers to utilize technology to provide consistent quotation information.

●        Using AI to amplify the productivity and expertise of the human team.

●        Have technology support the pre-underwriting of submissions to reduce the amount of work required by the carrier.

●        Providing transparency, so that brokers can see 24/7 how a quotation is tracking.

The effectiveness and value of this transformation is evidenced by PCF Insurance Services, one of the 20 largest retail brokers in the United States, that handles a significant amount of small and medium business.  PCF tested the digitally transformed process with a few quotes. The speed and quality of the process exceeded PCF's expectations, and the broker now sends nearly all its executive risk submissions to an integrated platform.

Alongside the quote and bind process of insurance itself, I encourage the industry to look beyond traditional insurance-related services to see how they can add more value to clients. Using technology to improve risk management is one area with considerable potential.

In the executive risk space, when a claim is made, some of the first things the lawyers look for are the existence of employee handbooks, policies and procedures, and the validity of contracts. Much of this information exists on different systems, so we need to look at how we can integrate this information. For example, by integrating HR, finance and using some smart AI, it is possible for companies to get an instant overview of their compliance risk. Should a claim happen, this enables details to be provided to lawyers easily and quickly. This task can be enhanced utilizing AI tools to help identify whether contracts are signed and valid in different states.

Technology will not stop evolving and the insurance market needs to harness the potential of improvements like these and then keep working towards making them even better.