It seems commonsensical to suppose that property and casualty insurers would prefer to insure risks that aren’t risky — so they don’t have to pay premiums. On this project, we learned that this is not the case. When they’re making a lot of money on investments, precise calculations of risk aren’t even that important — a carrier can lose money on underwriting and still make lots of money on investments.
But when the economy is like it is now, the most successful underwriting strategy is get agents to bring in new risks — even risky risks — that are profitable because you know how to price them — after all, companies in industries like mining and forest products need insurance, too, and they understand why they have to pay a premium premium to get it.
Property and Casualty insurers, we learned, have no end of systems designed to collect, store, and aggregate information, but none of these systems fills the bill when it comes to making it easy for underwriters and agents write more commercial policies within the insurer’s “risk appetite” (new term to us).
FirstBest was started by a handful of entrepreneurs to fill this software niche (the name refers to the propensity of insurance agents to accept the “first best” quote they get from carriers rather than wait for the lowest price).
The FirstBest offering is a Rich Internet Application with a very spiffy interface (written in Flash) that combines collaborative tools to eliminate communication bottlenecks, and analytical tools that make it easier for the agent to bring in just the business the carrier wants.
The First-Best 2-Minute Explainer was introduced last week at the industry trade show (ACORD/LOMA), where FirstBest’s software took the Innovative Implementation Award.
Here’s the FirstBest 2-Minute Explainer