Builders risk online

Rough Notes, May 2003 by Strazewski, Len

The online system for the Builders Risk Plan eliminates the delays inherent in a paper process, he says, and has allowed the agency to build a bigger book of construction and developer business in a particularly tight property/casualty insurance market. "We have had to write and re-write coverage for many of our clients due to the shift to a hard market, and the online program has allowed us to manage the process more effectively."

Bourdeau says that despite the general rate increases in the property/casualty insurance marketplace, Zurich rates have remained competitive and in line with loss experience.

In late 2001, the Builders Risk Plan became available to all agents through a special Web site, http://www.buildersrisk.com, an open distribution effort that dramatically increases access to the coverage, says Ferguson. Agents not contracted with Zurich Small Business can place builders and developers into the Plan through the Web site and take advantage of the automated systems, but they do not have access to other Zurich Small Business programs or the insurer's profit sharing program. Some of the agencies using buildersrisk.com may become candidates for access to Zurich's other small business products.

Fred Lautenbach, president of Lautenbach Insurance Agency, LLC, in Littleton, Colorado, has used the open distribution Web site for about one year and places about one risk a month in the program.

"It's been very helpful for us. It's very simple and very efficient. We're not a big agency so we don't have a lot of market clout, but the ability to place this business quickly and at competitive rates gives us a real competitive edge.

"Because of the shift in the property/casualty insurance industry, there are not a lot of markets out there writing this business. The ability to go to a Web site, get a fast and fair quotation and then deliver the policy in minutes is extremely valuable to us and our clients," he says.

The process also eases the burden on the five-person agency, he says, allowing employees to focus on sales and service instead of managing the application and underwriting process.

The online builders risk program has also been the prototype for most of the automated underwriting programs developed over the past year by Zurich North American Small Business in Baltimore, Maryland, according to the CEO, Ray Thomas. Zurich Small Business has about 11,000 contracted agents.

The builders risk program began as an experiment to test the acceptability of self-service for agents and their clients and the consistency of underwriting based on expert systems, Thomas notes. It now generates about $250 million in premium volume, based on an average account size of $750 and has allowed the insurer to capture an estimated 60% of market share of the builders risk coverage for its target market, he points out.

"This is a very desirable part of our offering to our agents and we will continue to improve and enhance our processes to make them easier, faster and more compellingly convenient," notes Thomas.