SME quote and bind special

Daniel: [00:00:32] Welcome to Insurance Business TV. I’m Danny Wood, news editor of Insurance Business Australia. We’re about to explore the latest innovations hitting the SME packages and commercial motor market with what insurance company Vero describe as an all new revolutionary broker experience in electronic delivery and placement. They say it gives brokers the ability to quote and bind business insurance, removing almost all insurer referrals and access to clearer and more accurate risk appetite. We’re here with Vero’s expert panel to look at what could be an SME game changer. Anthony Pagano is Vero’s head of distribution for commercial insurance. Michael Cooke or Cooke is Executive Manager for Vero’s Intermediated Packages Portfolio. Shelley Turner is Senior Business Development Manager at Vero. And for the broker perspective, Michael Huxley, he’s principal of LHB Insurance Services. Well, let’s start by looking at how the market has shifted in terms of SME quote and bind pegs from the insurer perspective. What are your thoughts there? 

Anthony: [00:01:44] Look, I think, Danny, over the last two decades, the SME market has changed considerably from an insurer. And from our perspective, brokers and insurers who are old enough understand how the SME market went from being very manual to very electronic driven, and now to become very data driven. And what we need to do right now is utilize our data to get a speedy response and make sure that our brokers spend more time with their customers. And in that regard, what we’ve seen is new insurers coming into the marketplace to disrupt what was once was a very closed shop, now with new aggregated platform models and new sort of insured things coming through, but also seeing broker behavior change where brokers are looking at speed and the time they want to spend waiting for a response back from insurers. So with all this, in terms of the changes from a broker, from an insurer point of view, and we’re really excited with the recent launch of SME on very wageful packages and it’s going onto the market is going to deliver an even better broker experience. 

Daniel: [00:02:49] And Michael Huxley, let’s go straight to the broker view. How do you see things in terms of how they’ve changed?  

Michael H.: [00:02:56] Yeah. We’ve certainly been experiencing many years now of hardening, hardening SME market changing guidelines from insurers, which is really pushing us into re-marketing our portfolio more heavily than we have in the past. Yeah. And certainly we’ve increased online or distribution models being HTTP and the like. Yeah. The game for brokers has changed a lot. 

Daniel: [00:03:25] And so Cooke, what were the challenges Vero was facing in this space? 

Michael C.: [00:03:29] Challenges. Michael, Sorry, Danny. We’re largely technological. As Anthony has said, modern technology has enabled a lot of new players to come into the market. Also, for brokers and insurers, a lot like efficiency and servicing customers is paramount. And the way we looked at it is that the old way of doing things and the technology that we had was actually causing brokers pain and causing our underwriters pain as well. And as an example, I mean for every referral that we triggered into our underwriting centre, we only down 4% of those and that means frustration for brokers, frustration for customers and frustration for underwriters. So we had to solve that and we’ve been able to use digital to do so. Now the Vero has gone live with our new system. We’ll be able to evolve that the broker experience, the pricing and also the underwriting appetite over time with broker feedback. 

Daniel: [00:04:19] Michael, were you seeing some of this pain? What was your experience as a broker? 

Michael H.: [00:04:24] Yeah, very much. Referrals, referral numbers on our systems was heavy. Response times was certainly delayed.  And really, we’re in the process of if we were referring things, we’d have to follow it up with a phone call to try and get it pushed through. Yeah. So it’s certainly what Cooke explained. It’s certainly what we’ve been experiencing over recent years. 

Daniel: [00:04:50] So what improvements is Vero making in this space? Pags, let’s start with you on that. 

Anthony: [00:04:55] We’ve gone back to the basics of speaking to our brokers and asking them what they once were. So we’ve asked and I like to say that we’ve listened to their feedback, and with that we’ve gone back to the spirit of which quote is put out there again to a broker, the time it actually takes for a thorough, if submitted in being responsive, but also most important about the clarity of the risk appetite that we actually want to get into the programmatic. We’ve been hearing from brokers a lot of insurers have gone in with a very common sort of appetite. But what is the business that you actually want to be riding in the first game of this, me and business insurance commercial. You need to be really nimble, really flexible. So what we’ve gone out there with is a, quote, experience that gives brokers the ability that as they go into the system, they’ll know straight away that in the after course that we want to be writing, whether it’s going to be acceptable or not, the scope of which we will take on that sort of acceptability, i.e., and this is the covers, but also there’s some insurers and the type of risk that we will tack on to. But we also go and go into a little bit more detail in terms of the application search bringing in excluded activity. So we can give absolute clarity to a broker that that when they are placing business with Vero, they do so with confidence. And so these are some of the small changes, but the biggest change now is the removal of almost all insurer referrals at the moment. And what is so important is because now if you’ve referred back to multiple books, so the commentary before about the 4% strike that we have for the business that does refer, that’s not a model that was working for us nor for the broker. So we had to make some fundamental change. And so those sort of changes that we’ve made in terms of giving brokers the power to get quotes instantly without having to refer if the price was not going to be competitive or not, and making sure they get that clarity of capitals, but also the confidence that when they’re placed business with Vero, then exactly what they bought. 

Daniel: [00:06:59] Cooke, would you like to add anything to that? 

Michael C.: [00:07:01] The key has been to enable everything Anthony just said is using digital technology. And what we truly believe is that enabling a broker to come into Vero and get an immediate response, whether it be an accept for a quote or decline. And the system will talk to the broker through their own appetite in real time. That’s the key change here. And it enables brokers when they need to talk to an underwriter to make sure that we’ve understood the risk properly. They can do so. At the moment, we’ve tied our underwriters up in knots and they’re not able to respond to brokers queries quickly enough, but offering them up to do so, and also enabling brokers to understand Vero’s appetite in real time, we believe will free both underwriters and brokers up service customers. 

Daniel: [00:07:39] Well, let’s talk about now how you developed a solution that’s fit for market. Pegs, Let’s start with you. Can you tell us about your voice of customer surveys and the sort of feedback you were getting on that from brokers? 

Anthony: [00:07:51] Well, we send that to our brokers quite regularly. The the experiences that they have with Vero across a number of products, a number of areas. And one of the things I think frustrated brokers was all this feedback that was provided, they didn’t know where it actually went. And sometimes the first person to go to the effort and time to submitting their thoughts, their frustration, or sharing the positivity of the experiences, but they never heard actually what was the outcome of all that? And we’ve been working with brokers for a number of years now in the last 12 to 18 months, particularly about the SME experiences amongst all the other process that they would work with us. And when we actually heard from the voice of customer in our mind the customer being the broker in this example or that they were getting the frustration and the frequency of payments pain, the referral turnaround times, the lack of clarity with risk appetite, and also the speed in which it took for the quote to be completed from the very inception. And so when we actually talk back to pricing, if you were to prioritize, if you were to create a system, is what would actually alleviate all of these concerns, what would look like? And we’d like to think that we’ve got to almost that end game position. Is there work to sort of absolutely enter the technology in data.? They’ll never be a perfect end game. But what we think we’ve developed right now is very different. I use some of the words you said rather. I think it will revolutionize the way insurers and brokers will approach the practice and commission market and I think is going to be game changer. Game changer because once upon a time we used to do business a certain way and now we done very different. We’re very much giving the power back to the brokers and give them the time back to the brokers, spend more time with their clients and giving them that certainty and confidence. And when placing higher volume business such as commission matter that do with accuracy and speed. 

Daniel: [00:09:44] Shelley Turner, let’s bring you in here. How did you approach this issue of developing a fit for market solution? 

Shelley: [00:09:51] Danny, we had a very broad and consultative phase over a number of years, the last couple of years. We ran a number of broker experience workshops to talk to our brokers about, as Anthony and Cooke have mentioned previously, what were their pain points? What what were on their wish lists? What were they? What were their blue sky items that they wanted in a broker system? We also then followed that up with a number of broker focus groups nationally, where we tested our philosophy and strategy with with a number of broker groups to say that we were on the right track. Was there anything else that we needed to capture and just gain buying and feedback from them generally as well as that as we move forward to implementation or to getting our systems where we wanted them to be. We also engaged a number of retired brokers who had many years of experience, along with LMI, to make sure that the the wider occupations we were looking at the question sets that we were going to be asking and also the direction we were heading in, that we were on the right track. 

Daniel: [00:11:05] And so overall, what particular insights did the brokers give you? 

Shelley: [00:11:09] So they were very excited about having a straight through, quote and bind system. Their referral times were one of the biggest pain points. So anything we could do to alleviate that and enable them to get a, quote, accept or decline in real time was going to be, as Anthony mentioned, a game changer for them. They were really happy that we were moving towards broader occupations that would enable them to find a really probably more succinct fit for their clients activities. 

Daniel: [00:11:44] Michael Huxley, the broker sitting right here, let’s put the pressure on. Was that your experience? 

Michael H.: [00:11:50] To be involved in broker focus groups and work, work together explaining where the hurdles we do encounter around trying to to support Vero and their products. Yeah. And to really to be able to have very open and honest discussions that Yeah. That really felt they were listened to. And, and I think this system has come a really long way to supporting many of those, if not all of those issues that we’ve had. 

Daniel: [00:12:22] Cooke, let’s come back to you again. Can you give us some examples of brokers using your Vero edge quote and bind offering and how it’s adapted to their needs? 

Michael C.: [00:12:32] Yeah, so so we’re actually running a pilot with some brokers now who are testing the system for a study. And one of the things that they’ve been really pleased about is the way the system actually notifies them of our appetite on the way through a quote. So whereas in the past they go all the way through a quote, maybe the systems trigger a referral into our underwriting team and the underwriting team’s having to come back to them for more information and things like that. The system itself is now actually coaching the brokers through our appetite, whether it be around occupation, whether it be around the levels of cover we’re willing to give or able to give. So they know up front whether this particular customer is going to be fit for Vero’s appetite or not. And I think and Shelley may laugh, but one of the brokers told us that they were stoked. That was the actual comment they gave us and the feedback around the fact that we actually declined to risk that it was up front and very very quick. But what we’re also seeing is a lot more quotes going straight through the system than ever. So in the pilot, we’re getting something like between 80 and 90% of the quotes going straight through the system. And where we are deploying the broker understands why upfront and that’s enabling them. When they’ve triggering referrals themselves or queries into underwriters, the underwriters are able to respond within a couple of hours and they’re doing so on all occasions, whereas at the moment it can take a lot longer than that. 

Daniel: [00:13:45] Michael Huxley were you stoked and what are some more examples you can add? 

Michael H.: [00:13:49] Yeah, absolutely. We’ve had a number of examples in the pilot program where we’ve gone through the system. The occupation was very clear. Competing programs were not as clear and required referrals through the occupation. You explained here how how clear it shows the appetite, but from a principle, it clearly shows what’s acceptable and what other activities for this insured are included. And it gives you a lot of confidence that your team. Yeah. Well supported around the activities that they choose and the fact that the occupations have been broadened substantially is excellent. And I’ve had examples, just the speed in that it is instant. And yeah, I’ve disclosed to, to potential new clients here’s some terms that I’ve got these aren’t approved. These aren’t approved. I need to go through an approval process. But these terms from Vero are approved, are clear, do support your needs. And. Yeah. Speed is speed is power at the moment. And a lot of these clients come to us, rightly or wrongly, on the day they need it and in the end this system is supporting that really, really well. And, and yeah, we’ve been successful in a couple of experiences like that. 

Daniel: [00:15:08] Pags, let’s bring this back to you. What are some other benefits of the new system? 

Anthony: [00:15:12] If I can just pick up on some of the conversations that Michael would have said as a broker, I said, if I’m a broker thinking about occupation search, and sometimes that’s the biggest issue in terms of what is the right occupation and business activities fit. For my client’s purpose, we’ve more than doubled the list of occupation searches that a broker can now find. So they’ll find something that’s within the detail of what the client actually does. The next step of all that is not just about the application of the occupation thing being included in the excluded activities and making it really clear throughout the process as to what’s included and to what’s excluded from a coverage point of view. So with absolute certainty, with contract certainty, point of view, claim time, people know exactly what was the intent of the purchase of the product and at that point in time. So then, so that gives brokers a lot more clarity about what they are getting and why they’re getting it. I think go back to the point about whilst we get the fast turnaround times and the clarity of that receptor and also the speed, I think it’s really important that the insurer that brokers need to ask Vero in terms of how we look at pricing businesses and be very different as to how we price business going forward. So by that I mean we’re looking at now very risk address pricing and that’s going to be specific to clients at their specific address. So in the past, we would quote a postcode or at an area level. We’re not going to be able to quote at a very specific level, taking into account bushfire in other geographical areas. We can now trade specific questions. So you’ll only get asked questions relevant to the occupation that have been put forward. So in the past where we’ve asked questions that we don’t need to ask anymore, we want to ask them if it’s not going to have a pricing impact in historical where we potentially change pricing a few times, you will now be able to change things quite regularly. And what that means is that when a product goes in to get a quote from and what we will use with these data is where we may to refine pricing either up or down on why this sort of market environment is that. Brokers will then be able to say, right, how do I actually make sure that Vero is part of that sort of market environment on the client behalf. So the pricing, the coverage of the clinical activities or reasons both for broker to have a continuous engagement with Vero across the number of platforms. So speaking of platforms, I guess is important for me just to really reinforce that point, I guess, you know, we work with all the major broking groups, cluster groups or the international commercial brokers to make sure that our approach is agnostic as to whether we go through Vero edge or through any other platform that we choose to participate in. That will take some time. I wish I had the magic silver bullet that would switch on a light switch in my new business, my doors and our renewals, my cancellations would all just magically appear. But we have a massive existing wood fire that we need to make sure that we look to nurture and maintain as well as growing our business. And so we have to do this in stages. And the first part is our new business. And then we’ll have to look at looking at the offering, the renewals of the business that we’ve written as new business today and also as existing business today. We’re also working really closely with the cluster groups and national working groups and international about their own bespoke solutions. What we actually want to achieve is to make sure that the harmonization of the business rules, the harmonization of the pricing is as close to and to each other. At the moment we have very different experiences and that’s not a great outcome from a broker or from a customer point of view. So moving forward, we like to see that we’ll give the brokers choice as to which platform of choice they choose to support their clients with, and no matter which platform they choose to go down. The solution to that should look identical from whether it be from A,B, or C. So this is some of the benefits that we look to do. But I think just from a broker experience, also from an insurer experience in terms of maintaining profitability now I think it’s important that we actually we want to be profitable. So we actually have some sustainable pricing rather than the pricing that you will see. And also the in and out of markets based on the lack of appetite in terms of do I want to write this too, I want to write that risk. And that’s I’m sure that some. So from now on, you will see a really clear way as to what we will do, what we don’t want to be writing. Having said that, feedback is always going to be important here. And we’re not just thinking that we’ve got all the answers in day one, but what we have done is taken a lot of feedback and put it as much as we can to when we do go live. It is absolutely as close to what a broker is looking for. But we will make sure that this will be a continual reiteration of what our broker is expecting and looking forward down the track. So at this point we’ve launched and we’ve put our pins down and it’s going to be a continual investment and reinvestment to make sure the broker experience is as best as it can be. 

Daniel: [00:20:25] Cooke, do you have some final thoughts? 

Michael C.: [00:20:28] Yeah, I think I think that’s a really important point that Pags mentioned it’s not only about putting our pins down, know when we finish this, this is about continual improvement. And I come back to the fact that we’ve introduced digital technology here that enables that improvement, whether it be on pricing or whether it be on the underwriting appetite itself and the rules and behind that, or whether it be just on the experience brokers getting the way the system deploys our appetite in the quote process. There are all things that we think we’ve got really, really set up really, really well. But there are also things that we can improve upon with feedback, and we’re getting some wonderful feedback through the broken pilot, and we’re absolutely set up mechanisms to get that feedback when we go live with the full market in the next few weeks. And it’s absolutely something we can tune where we weren’t able to do so in the past. 

Daniel: [00:21:10] And Michael Huxley, let’s finish with you. What’s your final broker perspective? 

Michael H.: [00:21:15] Pags will keep you to that continued improvement. Looking forward to it. And yeah, the system has its speed, its clarity. Yeah. From from my position, it’s something that I can engage confidently with my team and yeah, I think it’s, a huge step forward. 

Daniel: [00:21:34] Thanks, Michael. We’ve been talking about the latest issues around SME quote and bind and the Vero solution to those challenges. Thanks to Anthony Pagano, Vero’s head of distribution for commercial insurance. Michael Cooke, Cooke Executive Management Vero’s Intermediate Intermediated Packages Portfolio. Shelley Turner Senior Business Development Manager at Vero. And Michael Huxley, Principal of LHB Insurance Services. You’ve been watching insurance business television. I’m Danny Wood bye for now.