How quote and bind tech platforms are tackling new SME risks

“I probably see the challenges in the quote and bind space mirrored by the challenges that SMEs themselves have been facing over the last few years,” said Polglase during the IB Talk podcast.

Polglase said natural disasters, COVID-19 business disruptions, cyber attacks and now inflationary pressures and the looming threat of recession are some of complex exposures threatening today’s SMEs.

BZI’s chief underwriting officer said that while mainstream quoting platforms are largely designed to cater for simple and similar types of risks, the SME space requires more nuanced insurance offerings.

“The technology and the products offered online need to continually evolve to meet the new and changing demands of SME businesses that are increasingly becoming more complex,” he said.

Listen next: How brokers can adapt to meet new SME customer needs

“The technology itself in the quote and bind space really needs to evolve and represent the growing challenges that that SME businesses themselves face, which is probably not what they were set up originally to tackle,” he said.

In recent years, Polglase said increasing numbers of brokers have been connecting to mainstream quote and bind platforms.

“More insurers, such as Blue Zebra, have been supporting these platforms,” he said. “So, there’s an increasingly accessible marketplace online for SME insurance.”

Polglase said brokers can use these platforms to obtain quotes from a range of insurers for a particular insurance offering.

“This gives them [brokers] more quote options, giving them efficiency gains and consistency in the terms and conditions,” he said.

From the insurance and underwriting side of quoting and binding, Polglase said new technologies have provided access to larger pools of data outside firms’ own data sets. However, he suggested that this new data has led to some SMEs finding it more difficult to secure insurance coverage.

“[This] has enabled us to better segment and better target our risk selection process,” he said. “Insurers now are becoming far more binary about risk selection, which potentially leaves many markets and segments that have been traditionally unprofitable not able to be addressed on these online platforms.”

Polglase said the challenge now is to evolve these quote and bind platforms using technology so they can effectively tackle the new and emerging risk exposures faced by SMEs.

“At Blue Zebra, we’ve developed our own end to end policy administration system,” he said. “That allows brokers to quote and bind SME and several other products online.”

Polglase said their technology’s ‘modular architecture’ is one of its advantages.

“What that creates is an incredibly efficient product development lifecycle,” he said. “We can literally create new products from concept to production within weeks, not months or years, such as the case for many older legacy systems.”

He said BZI is about to release the latest version of this technology platform, called Blue Leopard, which is a complete rebuild of the original platform that was first launched about two years ago.

“That rebuild’s been based on broker feedback on the usability of some of the functions and features that we’ve currently got into market,” said Polglase during the podcast.

He said existing features are now expanded, including the use of publicly available third-party data.

“We use that third party data to pre-populate quote questions and our rating algorithms,” said Polglase. “This makes the process really efficient and consistent for the brokers that use the platform.”

The new platform has also enhanced the dynamic questions feature.

“We only offer questions for the broker to answer if they are meaningful to the risk in question, and we use that particular response to the question for acceptance and rating,” said Polglase.

He said this is “a little different” to some other broker platform offerings which are more hard coded.

Read next: Blue Zebra rolls out cyber insurance in Australian broker market

Other new features in BZI’s platform include the ability to enter multiple occupations into the system for small businesses.

“It’s very common now for businesses to diversify into additional activities,” he said. “This has probably been expediated during COVID as businesses have pivoted their models to survive and this has also created a major source of referrals for us.”

However, Polglase explained during the podcast that this new feature is also designed to minimise interventions or what his firm calls “friction with brokers.”

“We’re making sure that brokers have a quick, efficient and consistent experience with this,” he said. “We’re trying to minimize the referrals wherever possible [and] we believe this will be a real feature of the new system.”

Polglase said each day more than 1,400 brokers use their platform to make business transactions, including with SMEs.

For more details on the challenges in the SME quote and bind space and how BZI’s new technology can help brokers address them, listen to the podcast interview with Mark Polglase.