Unitrin Finds a Home for Homeowners Insurance with DRC

Unitrin Direct had been selling auto coverage since its incorporation in 1990. But in late 2007, the Chicago-based insurer began looking to add a homeowners line of business in order to earn a larger share of its more than 150,000 policyholders' wallets and keep its highest-value customers loyal to the brand.

"Multipolicy customers tend to exhibit better loss and retention behavior and histories," says John Elcock, VP and CIO for the carrier, which writes auto coverage in 25 states and homeowners in 22. "We were looking for growth and profitability, and we wanted to expand into the homeowners line of business to better serve our customers."

According to Michael Stahl, VP of product management, the carrier decided to expand its relationship with Honolulu-based DRC and implement the vendor's DecisionMaker with Extended Lines Technology Suite to administer the new line's policies. "DRC was already our vendor for auto," says Stahl. "We were comfortable with their systems and service, and we hoped some of this would integrate with the existing auto systems."

Another major selling point in DRC's favor was the system's configurability, according to Elcock and Stahl, who point out that business-side users can make changes to rates, the user interface and even underwriting rules by using Microsoft Excel, an application with which they already are familiar. To put those kinds of changes into effect previously, IT had to translate Excel spreadsheets into Cobol code by hand, Elcock explains.

"Now the spreadsheet automatically gets compiled into Perl scripts and C#.Net code," he adds. "It is easily executed by the web or by customer service."

DecisionMaker's ease of use and ease of configurability helped Unitrin Direct's subject matter experts test rules during the rollout and immediately after implementation, Elcock relates. And the system's ability to run on a service-oriented architecture made it easy to add capabilities for fire protection, credit, loss history, construction data and replacement cost calculations, he says.

All of this helped increase speed to market, Elcock continues, noting that homeowners policies were in production in three states within three months of the implementation, which itself took seven months. Just 10 months after making the business decision, Elcock points out, Unitrin was live with policies. "When we say we were up in three months, that also includes full functionality with vendors like Choicepoint, [Chase] Paymentech and ISO Home Value," he adds.

Enabling Innovation

Stahl says the ease of making changes in rules thanks to the Excel-based programming helped the business side better understand how the policy administration system works, which in turn spurred business innovation. "Executing rate changes is much swifter -- I just make the change in Excel, we recompile and go," Stahl explains. "These things give visibility into the inner workings of the IT world, which lets the business come up with many ideas we wouldn't have come up with if we didn't know how it worked at this level."

For IT's part, Elcock points out that not having to make changes such as these manually opens up the department's time and saves money. "It improves speed of delivery from concept to production, and it reduces my support costs," he says.

In fact, because of DecisionMaker's configurability and speed, Unitrin Direct is considering launching new lines of business on the platform. "We're also implementing a new umbrella product on the DRC platform," Elcock adds.

Nathan Golia is senior editor of Insurance & Technology. He joined the publication in 2010 as associate editor and covers all aspects of the nexus between insurance and information technology, including mobility, distribution, core systems, customer interaction, and risk ... View Full Bio