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Electronic Chat with Sharmila Ray, Head of Carrier Strategy, Solutions and Go-To-Market, Vertafore

Sharmila Ray is an executive with fintech product strategy, design, and go-to-market experience, including more than 10 years at McKinsey. In her current position at insurtech distribution provider Vertafore, she is responsible for growing the company’s carrier business, shaping its carrier strategy and value proposition, and developing relationships with customers.

 

What does the current competitive landscape look like for carriers?

The competitive race to digitize among carriers is not as tight as it may seem on the surface. While carriers are universally working to become more digital, automated and data-driven, relatively few have pulled significantly ahead of the competition. That means there is still plenty of opportunity for carriers to evolve their distribution strategy and gain a competitive edge. As advances in modernizing the agent experience, harnessing the power of data and analytics, and optimizing distribution management become more prominent in the next few years, the gap between those who implement these innovations now will have a strong head-start against those who do not.

What do you see as the top issues for carriers in the comparative rating space?

The challenge for carriers is that there is no comparative rating platform for commercial insurance that has scaled to provide broad market access to the independent agency channel. Instead, most agents still need to visit multiple carrier websites individually, often re-entering the same data in each, to gather quotes for commercial insurance. The one-by-one, manual data entry approach is inefficient, repetitive, and doesn’t leverage data in the agents’ agency management system.

These inefficiencies for agents have impacts for carriers, as well. Gathering quotes one-by-one limits opportunities for carriers. Whether or not they see a new piece of business depends on where the carrier ranks on an agents’ list. My prior research on the industry shows that agents typically invest in collecting just three to four quotes due to the time constraints of the current application process. If a carrier isn’t in the top three for that particular type of business, they don’t get a look. In some instances, it is an appetite awareness issue; agents simply don’t have the carrier top-of-mind when placing a specific risk. In other cases, carriers aren’t considered because agents default to the carrier sites they are most comfortable with or consider a particular carrier’s online application process to be cumbersome.

How can carriers prepare for an industry-wide commercial lines rating system?

Insurtech providers are getting traction on solving this long-standing problem, and carriers should be setting up the connectivity foundation to position themselves for success for when a market leader emerges.

Two ways carriers can prepare now is by investing in appetite, quote and bind APIs and by engaging with multiple insurtech comparative rating solutions. Investing in APIs such as automated quoting reduces the burden on the agent of having to go to multiple carrier websites and increases the probability that more carriers will get a look at every submission. Engaging with multiple rating vendors will also put an innovative carrier ahead of the game when one ultimately becomes the top provider.

What other innovations will help carriers in the competitive landscape?

Distribution is a prime area for the application of data-driven insights to drive better outcomes.  Carriers can use distribution data to benchmark their pricing and commissions (especially in commercial lines), be strategic about selecting new distribution partners, and identify new market and product opportunities. For example, through data analysis a carrier may find they can price up and still be competitive. That said, the success of data analytics depends on posing the right use cases and creating an infrastructure that properly collects, stores, analyzes, and applies data.

Creating wholesale partnerships with MGAs is another area of investment worth considering. As the global economy changes, news risks emerge that require protection, such as data privacy. Carriers often turn to MGA wholesalers for these niche markets. However, connectivity is even further behind for MGAs.

Insurtechs can and should connect MGAs as wholesalers, and as underwriters, into emerging commercial lines rating platforms. Doing so would create a more complete and self-contained digital ecosystem that supports more lines of business and delivers more value to all stakeholders.

What is your biggest piece of advice moving into the next quarter?

The race to provide an overall better experience for agents and insureds is well underway, but moving slowly. In the next quarter, carriers should accelerate their investments in APIs and solidify partnerships with distribution insurtechs. Carriers already in the race will pull ahead and those just starting will still have an opportunity to close the gap.
 

 

 


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