Access to the best, most recent rating information and bureau content can improve underwriting profitability and have a positive impact on your book of business. Now available as a service, future-proof insurers also get the ability to strategically manage deviations for the ultimate in speed to market.
Many insurers depend on high-quality actuarial research, supplied by insurance bureaus, to improve underwriting profitability and minimize their filing requirements. Their ability to adopt and implement this rating data quickly can offer a competitive advantage, especially in a soft market. Purposeful, well-considered decisions to deviate from bureaus’ suggestions can also create opportunities for insurers to differentiate themselves in a crowded and frequently commodified market.
The advantage to implementing updated bureau content, known as “circulars,” on a timely basis can be so significant that many insurers automatically adopt them, meaning they have committed to insurance regulators to stay current with the updates—or attempt to.
But for many P&C insurers, and especially those dependent on legacy systems, the important responsibility for interpreting, evaluating and implementing bureau updates is an onerous task.
Duck Creek Templates: a Complete Bureau Content Solution
Implementing bureau content, forms and rating data is a major operational cost for commercial and specialty lines insurers. A Novarica study showed that the fully-loaded costs involved with circular adoption could be in the 100s of thousands of dollars when done in a traditional manner. Compound this with the fact that there are nearly 1,000 circular changes a year for the combined bureaus Duck Creek supports.
The circulars include updated advisory loss costs, modified forms, changes to valid limits and deductibles, plus business rules, such as premium calculations for acting on that rating data. Subscribers then are left to interpret the suggested updates and manually produce algorithms to implement the rate changes they decide to adopt within their insurance rating platform.
Duck Creek Templates can dramatically accelerate these implementations, and improve the ease of use of bureau content. The Templates are an easily-ingested XML version of bureau content that includes algorithms, rates, and statistical codes, as well as extended content, such as user interface screens and complete forms inventories. This eliminates the need for carriers to code or re-implement the content into a system, enabling them to benefit from updates much more quickly without another layer of interpretation.
Available as a service, through our SaaS-based Duck Creek OnDemand, bureau content updates go from fast and convenient to “hands-free.” Users simply select one of three options per circular:
- Accept with change*
Duck Creek takes care of the rest.
(*the service does not include adding new customizations to your bureau content)
Managing Rating Content from Multiple Bureaus
Bureau content comes from a variety of sources in a variety of formats. For insurers that rely on multiple bureaus for rating and forms information, the challenge of implementing and managing circular updates is multiplied.
Users of Duck Creek Templates work with a single partner to receive timely updates from all the major sources of bureau content, including:
- The Insurance Services Office (ISO): a source of statistical, actuarial, underwriting, and claims information about property/casualty insurance risk.
- The National Council on Compensation Insurance (NCCI): a source of workers compensation information.
- The American Association of Insurance Services (AAIS): a rating information supplier for more than 34 lines of personal, commercial, agricultural and inland marine insurance
- Multiple state bureaus (bureau states)
Receiving bureau content from a single source provides a consistent and effective solution. A single process and format for all the bureaus simplifies implementation, centralizes carrier overrides and extensions, and promotes uniform circular adoption across the bureaus.
Because Duck Creek Templates is a “whole product,” on top of rates, rules and math, we provide issuance forms, statistical coding and integrated user screens that are kept current with each bureau circular.
Impact Analysis and Override
For most insurers, the reality of implementing bureau content goes above and beyond the technical effort to code the changes.
Business users must review the updates to rates and business rules. They then determine the potential impact on their book of business and decide whether and when to implement the change (or not), all of which can have a substantial impact on loss-cost factors, premiums and profitability. Beyond that, the opportunity to deliberately and strategically deviate from bureau content and override suggested changes is one way that insurers can express a unique value and understanding of their markets.
For insurers without access to “what if” modeling capabilities, these deviations typically have been difficult to establish, and maintaining deliberate deviations through successive circular updates has been challenging using software designed with inflexible architectures. However, the unique capabilities within Duck Creek Templates, combined with the modeling feature of Duck Creek Product Studio, help insurers understand the impact of bureau content.
Bureau Content as a Service from Duck Creek
Until recently, the opportunity to review the impact of bureau content updates, determine which to implement and which to deviate from—all without generating custom code—would have been considered the gold standard for bureau content management.
Now, however, the opportunity to license access in the cloud—and offload the large and ongoing burden of circular maintenance from both the business and IT departments—is the next logical desire for insurers looking to future-proof their organizations. And while that’s not available from the bureaus, it is available as a service from Duck Creek OnDemand.
Duck Creek OnDemand removes the IT cost of dealing with circulars and promotes keeping current with circulars. Duck Creek OnDemand is now in production for several customers, and Duck Creek Templates have been implemented on-premises for more than 40 insurers.
In short, insurers should expect more than updated rates, rules and math when it comes to bureau content and rating tools. They should demand a full solution that is current, complete, and easy to use, with contemporary user interfaces, modeling capability and access to issuance documents—and none of it requiring creation of code.