Platforms, Exchanges and Comparative Raters - A Primer
Insurance buyers are increasingly price sensitive as economic pressures loom. Although insurance is a mandatory product for some lines of business, buyers want to make sure they have alternative choices before they finalize their decision. A recent Celent study on small business buyers showed that price is the most important component of their buying decision and their greatest dissatisfaction with the current buying process is the perceived lack of comparison quotes.
Increasingly, agents are being asked to obtain multiple quotes on policies—even those with low premiums. But with small premium policies, it is difficult for agents to maintain margins if they spend too much time in the quoting process. Typically, comparative raters are used to obtain multiple quotes for personal lines. Comparative raters are software that allow an agency to enter data once and receive multiple quotes back from multiple insurers. Comparative raters have been used for years to quote personal auto (since it is a standard line of business which makes it easy to display premiums for like offerings). Until recently, the only way to get multiple quotes for commercial lines required entering data into multiple insurer portals or sending applications to multiple insurers and managing the ongoing questions and workflow.
Comparative raters for commercial lines are relatively new. Commercial lines are more challenging for several reasons: the wider variety of terms and conditions such as limits and deductibles, appetites are often less precise, and companies may have different specific coverages or endorsements available. This makes calculating a like-for-like rate more complex. The market is changing, though. A number of new entrants to the world of comparative raters are focusing specifically on commercial lines, and some firms that traditionally focused on personal lines are beginning to expand their line of business coverage to include commercial.
Additionally, a new class of entrants has emerged—platforms and exchanges. These companies provide retail agents with multiple quotes—like a comparative rater does —but typically include a wide variety of other workflow and marketing tools, allow the agent to take the quote through the binding process and allow agents to utilize new markets that they otherwise may not be able to access. Some platforms are provided by managing general agents (MGAs) with proprietary platforms.
For these solutions to successfully provide agents with accurate rates, insurers must also participate. But with a growing number of options, how should insurers think through a decision about which products to participate in? This primer explains the different options for multiple rates and how they typically work. It describes the features to look for when choosing where to participate and lists 15 providers that are active in the property casualty insurance marketplace.
The providers with profiles in this report include: Applied Systems: Applied Rater; Appulate: Carrier Connect; Bolt: bolt; ClarionDoor: MGA Hub; Cogitate Technology Solutions: Cogitate Rater; Dovetail Insurance: Dovetail for Agents; IBQ systems: Comparative Insurance Rater; ITC: TurboRater; LexisNexis: InsurQuote; Quantum Integrated Systems: Agent Direct Express; Semsee: Semsee; Talage: Talage Wheelhouse; Tarmika: Tarmika Bridge; Vertafore: Commercial Submissions: Vertafore: PLRater.