SUA Insurance and its partner-agents focus on specific commercial lines of insurance, such as insurance for small contractors who build fewer than five houses a year.

When four insurance veterans launched a new company a year ago, they were determined to learn from all the mistakes and poor practices they had seen in the industry during their careers.

Specialty Underwriters’ Alliance, Inc., through its subsidiary SUA Insurance Company, focuses on specific classes of commercial lines of insurance, such as towing operators who have garages, small contractors who build fewer than five houses a year, or professional employer organizations who need workers’ compensation insurance. It uses an innovative business model which builds on partnerships with key agents who are experts in one or two lines of insurance and who invest in SUA’s stock – they have skin in the game, said the company’s chief information officer.

“We felt it was important to just write the business we thought we had a good understanding about and we have been rigid about what we won’t write,” explained Barry G. Cordeiro, vice president and CIO of the Chicago-based company.

The idea behind SUA is simple, said Cordeiro. “We have all been in the insurance business and said that if we had it to do over we would start with a clean sheet of paper. We write commercial lines in special areas where we and our partners have specific knowledge,” he explained. “We feel that if you know enough about the program you can price it right, keep the underwriting box tight, manage the claims effectively and make a reasonable return for SUA and our partner agents.”

Specialty commercial “program” insurance is typically handled through managing general agents (MGA’s) who typically have a role in the underwriting and/or claims work. SUA intends to use Internet-based systems to do that work, providing an economic and operational advantage to the company and the partner agent.

A key element of SUA’s strategy is to use the latest technology to operate efficiently and keep costs low. For Cordeiro, that means running on Microsoft wherever he can and insisting on open applications that integrate well.

For its policy administration, SUA has selected Duck Creek’s EXAMPLE Platform – a Web-enabled, end-to-end policy administration system for the insurer’s commercial lines of business. The Duck Creek system will enable SUA to offer Internet-based processing, allowing the carrier’s partners to easily submit, quote and administer the firm’s products. Duck Creek also offers flexible integration to SUA’s back-end systems and easy access to the company’s data.

When Cordeiro went searching for a policy administration system, he wanted the latest technology, including a flexible system based on service oriented architecture (SOA), full ISO compliance, and excellent integration capabilities using Web services. Before joining SUA, while working for CNA, he had purchased Duck Creek’s rating engine, which was developed using XML on the Microsoft platform. Now he discovered they offered policy administration as well.

“Most importantly I knew they were a solid organization that understands the insurance business from both the agency and carrier sides,” he said. Just as SUA depends on agency partners to supply their expertise so the carrier can run cost-effectively, Cordeiro plans to use IT vendors as true partners. He expects Duck Creek to be his software development organization.

“I am not trying to build a huge IT organization,” he said. “Rather, I am relying on the capability and services of my partners, which is consistent with the SUA business model that focuses on staying lean.”

For Cordeiro, Duck Creek had the right technology and a full inventory of ISO forms and rate books.

“Duck Creek was attractive because it was on a Microsoft platform and it is open,” he said, adding that it is XML-based and will support the Web service architecture he is planning.

Some other vendors he looked at had marketing that ran ahead of their products and architecture. One talked about Web services but hadn’t yet developed a product with a real interface to Web services. Another vendor was rewriting its ISO rating engine in .NET but hadn’t yet produced usable software.

“Another major selling point is they have 50 states of ISO rate books and forms built out for commercial and personal lines. That is an enormous advantage in this marketplace because the task of building that out and keeping up with the changes is significant,” he said. “The amount of ISO forms is voluminous— approximating 6,000. The fact that a company had automated all these forms and built them into their technology solution is a big deal.”

Keeping up with rate and form changes across 50 states is a never ending battle, he explained, and a company that lags even a few months behind misses opportunities to achieve competitive pricing in the marketplace on a timely basis.

Efficient operations give SUA an advantage over carriers that are running older software on expensive legacy platforms, he added.

Is SUA going to run totally on Microsoft?

“If I can, I will,” said Cordeiro. “If there is a Microsoft-based claims solution out there that meets our needs, the answer will be yes.”

www.duckcreektech.com

www.suainsurance.com