Explosive growth at York Fire & Casualty Insurance Company (Mississauga, Ontario) in early 2003 overwhelmed the manual processing of producer requests. "We weren't meeting our service standards and we frequently experienced The Four I's -- incomplete, illegible, ineligible, inaccurate data," says Colin Simpson, VP and COO. "We needed to automate our internal processes as well as our interactions with our independent producers."
Licensed in Alberta and Ontario, the Canadian insurer (a subsidiary of Kingsway Financial Services; US$4 billion in total assets) began seeking a solution late in 2003. "At that time the choices in Canada were a custom-engineered system from a large company or an exception-based personal-lines underwriting tool by iter8 (Toronto)," according to Simpson.
Since custom engineering was prohibitive, York Fire concentrated on evaluating iter8. "We sought a platform-independent, cost-effective solution with the agility to adapt quickly," says Simpson. "We wanted our underwriters to use it internally and producers to access it via a portal. Iter8's service-oriented architecture (SOA) solution offered these capabilities and permitted us to modernize systematically, while also allowing us to automate new processes as new markets and products developed."
By March 2004 an implementation team headed by York Fire's underwriting manager, the insurer's IT department and iter8 was formed. To optimize deployment speed, the project was split into three phases: new auto policies, new property policies and policy changes for both. "Auto was Phase 1 because that's where the bulk of our growth was occurring," comments Simpson.
To accommodate iter8 on York Fire's Microsoft (Redmond, Wash.)LAN, a Web server and an application server were purchased and deployed. In addition, the IT department made investments in shifting its talent from focusing on legacy system maintenance to programming and administering new technologies.
From Weeks to Hours
By October 2004 the system rolled out internally to underwriters. "Processing a policy dropped from weeks to hours because underwriters focused on exceptions rather than administration," Simpson notes. "We've saved 40 percent on head count, and staff morale has improved because underwriters aren't spending so much time on clerical chores."
Early in 2005 the external rollout began with a half-day kickoff and training session for 200 producers. As producers signed on throughout the year, many opted for the real-time electronic data interchange (EDI) upload rather than the portal interface. During 2006, York Fire worked on Phases 2 and 3, which will be fully implemented by the end of 2007. Going forward York Fire is considering a similar solution for claims automation.
Beyond the efficiencies anticipated from iter8, York Fire and its producers have remained competitive despite the emergence of direct writing. "Focusing our employees and our producers on their areas of expertise has increased policyholder retention rates 10 percent since February 2005," notes Simpson. "And our producers report strong customer retention rates. Overall we've remained profitable."
York Fire & Casualty Insurance Company (a subsidiary of Kingsway Financial Services, Mississauga, Ontario; US$4 billion in total assets).
Lines of business:
Auto and property, commercial, and personal.
Exception-based underwriting automation solution and agent portal from iter8 (Toronto).
Automate underwriting and rating to increase efficiency, attract producers and improve policyholder retention.
Anne Rawland Gabriel is a technology writer and marketing communications consultant based in the Minneapolis/St. Paul metro area. Among other projects, she's a regular contributor to UBM Tech's Bank Systems & Technology, Insurance & Technology and Wall Street & Technology ... View Full Bio