MGAs and carriers can use Appulate to put their insurance programs online. This provides a staging area for the electronic submission data collection and subsequent risk underwriting and quote generation for both retail agents and internal underwriters.
The purpose of this article is to describe the main components that comprise the Appulate Insurance Program and to provide the roadmap for MGAs or Carriers to follow in order to gather the requirements needed by the Appulate’s engineering team. MGAs and carriers' benefits:
- Receiving completed submission: no need to go back and forth with the agent to collect data and documents.
- Faster turnaround time on quotes: agents are encouraged to do more business with you.
Appulate's Insurance program consists of the following artifacts:
- Smart Q&A
- ACORD and supplemental forms
- Miscellaneous documents and loss runs
- Risk qualification engine (Appetite guide)
- Quote generation
- Request-to-bind procedure.
Let us review each of these components individually.
Appulate’s Smart Q&A tab is the main vehicle for data collection about the insured. It is “smart” because the questions that Appulate presents to the user are context-driven and can change based on the market and information already collected.
There are three main dimensions that initially define the questionnaire:
- Insured Business Type (e.g. Farms, Hotel, Restaurant, Contractors - Landscaping, etc.)
- Insurance Line (work comp, general liability, commercial auto, etc.)
- Market, which in Appulate terminology is a common term used for MGAs and carriers.
The questionnaire can also subsequently grow or shrink based on the information already provided. The simplest illustration of this would be, for example, after the question “Is the insured engaged in any other type of business? there would be “If Yes, explain” question that would naturally appear only if the main question was answered Yes. But, there could also be a much more elaborate logic used to ask or not to ask the whole series of questions that would take into account many factors about the insured, like business location, estimated premium, loss history, insured proximity to hazardous zones, to give just a few examples.
The whole idea behind our Smart Q&A is to present the user with a fast and convenient interview process to collect the required information about the insured without the burden of asking too many and especially not relevant questions.
So, for example, if designed correctly, Appulate wouldn’t be asking about the number of beds if the insured is a gas station. It would only ask such a question if the insured is a hospital.
Aside from being dynamic as described above, questions in Appulate can be designated to be required/non-required, as well as have data validation rules and data lookups associated with them.
Here are some use-case examples of Appulate’s Smart Q&A in action:
- Depending on when the business started, require up to five years of insurance history. If this is a new business, require none.
- Completely different sets of underwriting questions for different types of business (e.g. restaurants and farms).
- For the Class code 55832 and if “Metal work performed?” is answered Yes, then the additional question “Please describe” will appear and will be required, and also additional “Any metal forging operations?” must be answered.
- If the insured status is “Married”, ask an additional question about the spouse.
Sections and subsections
Appulate also groups questions in sections and subsections. In order to provide a uniform experience to all of its users, Appulate highly recommends following this high-level organizational structure for the main questionnaire tree:
Subject: the first group of questions that directly affect the premium calculation. The idea is to give the user an estimated premium as soon as possible without having them complete the whole lengthy questionnaire. For WC submissions, for example, you would typically find the information there about locations, payroll, and ExMod. For other insurance lines, it could be different data.
Underwriting: the second group of questions that would be used to underwrite the risk. You would typically find questions there that concern the insured operations, safety procedures, etc.
Coverage history: all the insured prior coverage information, including data about claims and losses, as well as which carriers the insured was covered by, at what premium, etc.
Policy: used to collect other miscellaneous data about the insured needed to produce not only the quote but ultimately the policy as well.
ACORD and supplemental forms
Appulate can produce all the relevant ACORD and supplemental forms as part of the submission process. These forms can be found on the Forms tab. The data that was collected on the Smart Q&A would be used to populate them. But in addition to that, Appulate provides UI to complete these forms online individually as well (Q&A and Inline Editors).
All the forms can be electronically signed and as such, they could be made part of the submission process workflow or, for example, be a required step when the quote is requested to be bound. The forms can be signed by the producer or the insured.
Optionally, Appulate can also accommodate rules and requirements for various miscellaneous documents as well as loss runs, as a part of the submission process. For example, if the insured does not have coverage this year, you may want to require them to attach a “Notice of Cancelation” as part of the submission.
Loss runs are organized on their own tab.
Other documents would be stored on the Docs tab.
Appulate has a rating engine that can be used to calculate the premium. Each rating algorithm must be unique; thus some custom development would always be required to implement it. Appulate can also call out to an external rating engine provided via web-services API.
Appulate has a place on the interface to display preliminary or an estimated premium, as well as the same rating calculation, which would be used to produce the quote.
Risk qualification engine
This indicator on the Appulate UI has a dual purpose.
Its color indicates whether all of the required data has been provided to make it a complete submission ready to be quoted.
- Green means the questionnaire is complete; it is ready to be submitted, and a quote can be produced.
- Orange means there are still either required questions outstanding that have not been answered yet or other required files (e.g. loss run) are missing, or perhaps some forms have to be signed. When the indication is orange, the agent will not be able to make a submission.
- Red means the answers contradict the market's logic and the insured isn't eligible for a policy. The agent will not be able to make a submission.
It is up to the Carrier or MGA to tell us what they want to constitute a complete submission. This is part of the information that the Appulate team would seek to have in order to develop the program.
The letter itself indicates the underwriting status of the submission.
- “A” means that this submission will be accepted and quoted automatically. It means that the retail agent will get the quote without any kind of extra approval from the underwriter on the carrier or the MGA side. The assumption is that the market will define a tight underwriting box that they are comfortable with letting external agents generate quotes on their own.
- “U” stands for underwriter referral. It means that some of the answers to the underwriting questions put this risk into the kind of an orange zone, meaning the underwriter on the market side will have to check this submission before deciding whether to quote or decline it. An example of what may trigger the submission to go into the “U” status would be the estimated premium that exceeds some specified threshold, like $5,000, or perhaps “Any hazardous work activity?” question was answered yes.
- “D” stands for declination. One example of this would be if the question “What is the maximum weight lifted by employee?” was answered with 100 pounds, the carrier or MGA would not want to underwrite this insured, and decline it outright, meaning that the agent cannot request a quote.
Thus, Appulate’s Risk qualification engine stands as the core part of the automation that we provide. The MGA or carrier that wants to take advantage of this automation would be required to provide their own rules that will guide the trigger for the three possible outcomes: A, U, or D. The rules can be as simple, or as complex as the underwriter wishes them to be, taking into account multiple data points about the insured, like a type of business, location, losses history, hazardous activity, safety procedures, etc.
After the questionnaire is completed, and all the required data artifacts have been provided, Appulate can now generate a quote (only if the market supports quote generation).
- If the submission was qualified as “A”, the retail agent will be able to get the quote by themselves.
- If the submission was turned into “U” status, the underwriter on the MGA or carrier side will be notified about the submission and they will decide whether to issue the quote or not based on their subjective assessment of the risk.
But in both cases, Appulate could be used to facilitate the actual quote creation. So the MGA or carrier that wants to take advantage of this will need to provide Appulate with the quote template.
Request to bind
Appulate can also be used to define which specific steps an agent user would need to go through to initiate the request-to-bind workflow within Appulate following the acceptance of the quote by the insured.
These additional steps may include the following things:
- Asking for additional questions.
- Signing various ACORD and supplemental insurance forms, by the producer, the insured, or both.
- Uploading additional documents.
So the MGA or carrier will need to provide a description of what they want to see to be implemented as part of this step of their program implementation on Appulate.
How to start outlining for implementation
- Chose a line of business to start.
- Pull a PDF of all of the ACORDs.
- Highlight all questions that should be asked in one color.
- Highlight all questions that should be required in another color.
- In a separate document (e.g. Microsoft Word or Excel) add comments or notes and additional rules and requests.
- Review and confirm with your team, then turn in to your implementation lead to review and add to the queue. An ETA will be returned back to you in a few days.
- Chose the next line of business and follow 2-6 above.
- Once your LOB has been implemented, log into a test agency account and test. Document any concerns, changes in a Microsoft Word document using images. Turn them into your implementation lead.
There is also a fine line between having as many requirements as possible to completely eliminate the back and forth process of gathering information for the quote and asking too many questions that it takes the agent a tremendous amount of time to work through it. Taking full advantage of the component that makes this a smart and dynamic questionnaire will help balance this.