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Carrier Tech Is Helping with Loss Mitigation

Bonus Feature: ACT Meeting Report from Cincinnati

Munich Re made a strategic decision to bring global solutions to local entities, so at American Modern (a Munich Re company), an innovation structure was born:

·        Operations Consulting Team—focuses on business processes and internal automation

·        Innovation & Digital Team—focuses on external innovation for agents, customers, new capabilities, new services, etc.

·        Customer Experience Team—goal is to ensure it’s easy to do business with the carrier.


These teams integrate and focus on incremental innovation across the entire company. Presenter Sudheendra “SG” Galgali of American Modern said the teams “don’t go for moonshots. They look at ideas and build a vision that is long-term”.


“We are driving innovation as a full-culture endeavor,” Galgali said. “It is not about doing digital but about being digital.”


One overriding principle at American Modern is the customer experience. “If the customer doesn’t care that we are doing it, we don’t bother,” Galgali emphasized.


For instance, the company asked customers what they wanted from an app. It turned out customers didn’t want an app - They wanted the ability to text. So, the company turned to a chatbot solution. About 75% of calls were about billing, so the chatbot was enabled to handle those.


As part of the decentralized process for innovation, American Modern allows ideas to filter up. “If someone has an idea and we like it, we say, ‘Here is some money. Go do it’”, Galgali said. For new products and services, the company starts with a pilot. They learn, they fail, they go back and make fixes, then pilot, learn more and perfect the offering.


There are a few key questions American Modern asks when proposing a new product or service:

·        Is there customer demand?

·        Do they feel the effort is worth it?

·        Does the community affect use?

·        Is it profitable?


He used water damage claims as an example since they were a significant loss sector at American Modern. The company dove into ideas on how to prevent claims or mitigate damage and landed on a water sensor solution. They chose a non-intrusive application that just indicated there was a leak. It was tested on 1,000 policyholders for a year. The carrier went to the Department of Insurance and changed that policy’s filing to include the free device, and now the company is seeing the permissive sentiment of regulators growing.


Sam Affolter, senior director and head of agent research at Safeco, touched on water and flood mitigation as well, detailing some of the tech-forward solutions his company is offering.


With the average non-weather water claims running about $9,000 and being the second most frequent cause of loss (after weather-related losses), carriers really need to keep those costs down.


Affolter asked the ACT Meeting attendees for feedback via mobile polling software: 74% didn’t have a water-loss mitigation device, 21% had an individual sensor, and 5% had a whole-house device.


Affolter noted different types of water-loss choices:

·        Passive (alerts homeowner when there is a leak) or Active (alerts and shuts off water)

·        Point of loss (sensor placed in specific location) or Whole Home (monitors all water systems)

·        In-home (inside the house) or Weatherized (outside the walls of the house)

·        DIY vs. Professionally installed.


In 2016, Safeco piloted with Notion in California and gave devices away to agents to see if they could sell them at discounted price.


“We found high install rates but low purchase rates,” Affolter said, “so we revamped the system. We built a water mitigation hub that gives agents a central place to learn about the technology, the target user, and customer materials to get them to install mitigation devices and take preventive action. We are also partnering with Flo by Moen to monitor water flow in the whole home. A device will shut off the main if its machine learning program identifies an anomaly. It works through an interactive app that asks you questions about usage for the first week or so to learn your normal behavior.”


Safeco also offers a water damage protection cash-back program. If you have whole-home professionally installed devices, for every six months of no water claims, you get $25 back to help cover the price of the installation.


In the Q&A segment, agents said they couldn’t keep track of which carriers were offering discounts, devices, pilots or whatnot. It appeared there needed to be a better way to integrate the agents into the mitigation-device programs.


American Modern’s Galgali offered some lessons learned from his company’s experience as well:

·        Communications matter—Getting good email addresses isn’t easy. Once you have them, your message has to be crafted carefully avoid a big brother sense on a sensor project.

·        Free is not free—Some people accepted the device but didn’t install it, so many devices that were sent had no value.

·        Identify key failure points—The placement of a water meter matters, and placing it in the wrong place can prevent access to Wi-Fi. Additionally, for motion-detector sensors, a dog barking and other things were setting them off.

·        Stakeholder engagement—American Modern found it needed to be very careful how they approached policyholders, because agents were sensitive about direct relations.


​FROM THE EDITOR: Additional details from the May 2019 ACT Meeting can be found in the June edition of ACT News, and PDF versions of presentations are always available on our ‘Past ACT Meetings’ web page.



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