Centauri uses Verisk risk data for better point of quote accuracy

July 1, 2015 / 4 min read

Background

Centauri is a growing Florida-domiciled insurer licensed and approved to write business in nine states. It processes approximately 100,000 quotes and policy renewals annually, almost exclusively through independent agents. The company wants to develop productive, long-lasting relationships with agents and be known for ease of doing business.

Centauri’s underwriting philosophy is to gain a clear understanding of each risk and price it accordingly at the beginning of the relationship with the policyholder. The company is willing to spend more money and time up front if the result is a high policy renewal rate. This approach is expected to result in a good outcome for policyholders, agents, and Centauri.

Verisk solutions

Centauri uses multiple Verisk solutions during its initial quoting process. To make the process comprehensive in scope but simple from a user perspective, Centauri has connected its policy-quoting system directly to Verisk’s underwriting solutions.

When an agent enters an address into the Verisk system, the property location is immediately geocoded to determine the precise coordinates of the risk. This is particularly important because Centauri writes in many coastal states exposed to hurricanes, including Florida, Alabama, Mississippi, South Carolina, Louisiana, and Texas.

Centauri uses the LOCATION^® distance-to-coast product to decide whether the wind peril will be part of the standard policy. If included, the Verisk data is used to calculate the deductible. Centauri uses several other solutions to manage catastrophe risk at the point of underwriting, including AIR Catastrophe Hazard Reports and wind mitigation.

Centauri integrates other services from the LOCATION suite of products to evaluate potential risks at the property level using the same direct-connection workflow. Examples include LOCATION Public Protection Classification (PPC^®), which assesses the ability of the responding fire station to fight fires, and the Building Code Effectiveness Grading Schedule (BCEGS^®), which assesses building code enforcement for the community in which the property is located. All the data is prefilled into the policy management system and factored into the original quote provided to the policyholder.

Centauri writes policies to replacement value, which ensures the estimates used in underwriting closely match claims estimates in the event of a loss. Replacement costs are estimated as part of the insurer’s initial quoting process through a direct connection to 360Value^®, Verisk’s replacement cost estimator.

360Value uses the same underlying building cost data as Xactware’s Xactimate^®, which Centauri uses for claims estimates. Upon entry of an address, 360Value property prefill provides most of the property-specific information Centauri agents need to calculate the replacement cost estimate. That process streamlines the workflow while maintaining a high level of reliability in the estimate.

Centauri incorporates Verisk data solutions in its intial quoting workflow

Centauri’s business model

Centauri’s business model is simple. The company wants to write policies at fair and actuarially sound prices. Understanding the risk at the time of quote helps avoid changes in premium at the point of bind or renewal based on the true nature of the risk profile. This up-front, no-nonsense approach results in satisfied customers, increased retention, and happy agents.

“The key factor in our success is capturing all of the required data at the time of quote,” said Lora Rees, executive vice president and COO of Centauri Specialty Insurance Company. “Incorporating all of the underwriting risk data into the quote ensures that we provide the customer the most accurate quote possible. By moving the data analysis to the beginning of the quote process, we improve our quote-to-bind results, making our agents and underwriters more efficient.”

Agents become more profitable because they know that unless there are unusual circumstances, a quote provided by Centauri will closely match the premium to be charged based on the coverage the policyholder wants. When agents can confidently write business with up-front pricing, the agent and Centauri are setting the stage for long-term satisfied customers who renew their policies.

“If agents like your process, they’re more likely to send business your way. Professional agents don’t want to be just order takers for cheaper carriers,” continued Rees. “We don’t want customers to feel we’ve changed the price on them at the last minute, which can happen when underwriting reports are run just before or even after the policy is bound. It’s also important to get accurate information at the start to make sure we’re not concentrating risk in one area.”

Incorporating underwriting risk data at the point of quote improves quote-to-bind ratios, encourages long-term relationships with agents and policyholders, and builds a better book of business.