In its nearly 30-year history, Arrowhead General Insurance Agency, Inc., a National Programs company, has grown by being flexible, able to pivot at almost a moment’s notice to take advantage of a market opportunity.
“We like to say innovation is our middle name, and since we’re a tech-forward company, the transition to teleworking for our entire team has been a straightforward one,” explained Tom Kussurelis, Arrowhead COO and National Programs EVP.
The program administrator is highly active in supporting new Insurtech efforts. They’ve employed dozens of remote-working underwriters and program managers, even before COVID-19. And they’ve pioneered a business solution they call management “lift-out” from carriers to Arrowhead’s administration. One of their latest is the lift-out of QBE’s small commercial insurance program (under $100,000 premium).
“We took over management of the program a few years ago and quickly turned it, because we already had the support teams and systems in place to give the program the attention it needs,” explained Kussurelis. “’Spearheading innovation’ is our brand essence, reflecting our commitment to often taking a novel approach to property & casualty insurance programs.”
“In the case of this small commercial lift-out, the carrier maintains its position as the source of capital and paper,” explained Walter Grote, president of the three-year-old program called Arrowhead Core Commercial. “One reason they selected us is because we have access to more agents, the ability to deliver more customers than imagined and the capability to service those customers throughout the life of the policy.
The Challenge: With over 30 million small businesses in the U.S. (according to the SBA), the small commercial insurance space is continually evolving and represents growth potential for a carrier with the right appetite. But not every carrier is set up to underwrite and service a large volume of small policy transactions (under $100,000 in premium). Investing time and resources in other lines of business, multinational carrier QBE had other priorities, and faced a decision about the future of its small commercial book of business.
The Solution? Liftout: QBE transferred operations driving most of the expenses to Arrowhead: Operations, Distribution, Premium Accounting, Customer Service, Underwriting and Marketing. QBE employees in these roles transitioned to the Arrowhead team. Core Commercial products and services were refreshed, updated and automated, including integration of billing, collections and customer service into Arrowhead’s Centers of Excellence.
The Results: Arrowhead Core Commercial was born. In 18 months, eight lines of business were up and running on a brand-new system. Forms were filed in all 50 states, allowing producers to quote, submit new business and service policies on Arrowhead Exchange, while QBE continues to hold the paper and capital.
“The teams from Arrowhead and QBE came together and moved with precision and speed,” says Lisa Stahl, Arrowhead’s Commercial Division’s chief operating officer. “To my knowledge, no one has executed a transfer of this magnitude in this short of time.”
Innovation, Arrowhead Style: “Arrowhead is unique in that we can ‘lift out’ the part of the portfolio that’s costing the carrier and turn it into a program,” says Stahl. “The carrier pays us a percentage of the premium and the majority of its expenses disappear.”
Stahl continues: “Through technology and automation, Arrowhead is able to deliver better service level standards to carriers like QBE, which improves retention and provides a runway for growth. Agents and customers love the service commitment and bring us more business, plus QBE can grow its footprint via Arrowhead agents.”
The Lesson: Don’t give up on a book with growth potential just because it costs too much to service.
“Arrowhead doesn’t invent the technology; we bring the technology and know-how to increase efficiency, reduce expenses and create a runway for profitable growth for our partners,” says Kussurelis. “That’s exactly what we did for QBE and it is truly a differentiator.”
Curious? Learn more about National Programs Innovation. Contact Jimmy Curcio, jcurcio@NationalPrograms.com, 908. 346. 4035.
This article originally appeared on Arrowhead’s blog. It has been updated modified to better fit National Programs’ audience.