By Jon Hughes
Even in the best of economic times, the Florida insurance market presents challenges in terms of a unique governance model and frequent losses due to natural disasters. Not surprisingly, following the especially volatile storm seasons of 2004 and 2005 many insurance companies stopped writing homeowners insurance in Florida creating a void in the insured market and demand for homeowners and wind insurance. For start-ups like HomeWise Insurance, this situation was a golden opportunity to take over some policies from state-run Citizens Assumption and provide reliable wind coverage to Florida homeowners.
When HomeWise entered the market in 2006, demand was high for experienced, financially-sound insurance companies offering homeowners coverage. Strategically, moving rapidly to handle this new business made sense, but since the company was starting out with a small, strategic staff, HomeWise executives knew ramping up in time to take advantage of the market opportunity would be difficult.
Finding a way to quickly process the new business was critical to HomeWise’s potential success, so outsourcing core business processes instead of taking time to build in-house staff levels seemed a logical course of action. HomeWise had a system in place for wind insurance but felt a different solution was needed for the homeowners market. Blue Cod Technologies, Inc. (Blue Cod) had been processing business for insurance companies serving the Florida market for several years with great success, and after recommendations and deep due diligence, HomeWise decided to consider Blue Cod as the company’s primary business process outsourcing (BPO) provider.
In a meeting with HomeWise executives, Jeff Brown, president and CEO of Blue Cod, and other Blue Cod executives, provided details about successfully supporting and managing the existing homeowners book of business for an insurance company now exiting the market. Blue Cod’s obvious BPO expertise, knowledge of the Florida insurance market and commitment of the company’s management team made an impact on HomeWise.
“We were impressed with the leadership and felt it made sense to engage in a relationship with them [Blue Cod],” said Dale Hammond, president and CEO of HomeWise Insurance.
Up and Running
From the time the contract was signed, Blue Cod set about creating electronic interfaces with HomeWise, developing clear, common sense-driven processes and clearly communicating collaborative definitions of what is expected from the relationship in terms of strategic goals. Blue Cod currently handles all of the day-to-day work for HomeWise’s new business, plus processing endorsements, renewals and cancellations to first notice of loss (FNOL), claims processing and billing. Further, Blue Cod’s dedicated Product Support Services Team, which includes licensed property/casualty underwriter assistants, has the expertise in contract review situations to manage more complex policies and to handle higher limit authority, thereby decreasing the need for manual review and input by HomeWise.
“We try to automate as much work as possible,” said Jon Hughes, director of BPO for Blue Cod. “We are focused on delivering quality and are proud of exceeding our set standards. We feel like a true partner with HomeWise and are passionate about understanding and delivering on our clients’ needs.”
To that end, Blue Cod has implemented a stringent quality process during which 10 percent of all transactions are randomly pulled and reviewed for accuracy. Blue Cod also operates on a one-day turnaround basis for cancellations, and a two-and-a-half day turnaround basis for endorsement processing. Other quality measures Blue Cod has enforced ensure 100 percent of all incoming HomeWise calls are answered by a human being, and 98 percent of those calls are answered in 30 seconds or less.
By working collaboratively, it took only three months to get HomeWise’s new book of business up and running, and through the BPO agreement with Blue Cod, HomeWise was able to rate and issue policies, send out bills and provide customer service quickly and efficiently.
Forging a Future Together
While there is always a certain amount of risk involved in making any BPO decision, HomeWise’s only real concern was the physical distance between the two companies’ main offices in Florida and Massachusetts for HomeWise and Blue Cod respectively. For Blue Cod, this was an obstacle they were willing to work hard to overcome. The company quickly established an office in Tampa, Florida with seasoned insurance industry professionals who would play an active role in the processing of HomeWise policies. It took work, but recently Blue Cod’s Florida team has taken primary responsibility for all HomeWise processing.
In fact, some Blue Cod employees now operate from the HomeWise office, and are helping to take on additional local support functions.
Due to the success of the relationship so far and the extended capabilities Blue Cod provides, HomeWise plans to expand the relationship and is looking forward to forging even stronger ties for the future. Blue Cod is in the process of building a front-end for HomeWise which will go live in conjunction with HomeWise beginning to write new business in South Carolina this Spring, and developing a new claim module which will go live this Summer.
“We have a lot of belief that Blue Cod will get us where we want to be in the next 12-18 months,” said Hammond. “It’s the right direction. We can bring up problems and it’s a discussion, not a battle. It’s a very unique collaboration.”
In a little over two years since the original “go live” date with Blue Cod, HomeWise has gone from 0 policies to over 119,000 policies in force, and in 2008, the company increased volume in most areas over 2007 results by more than 200 percent. HomeWise has moved all of its business to Blue Cod, including wind, which had previously run on another system. As a result, today Blue Cod is considered an integral part of HomeWise’s business success and is a key partner.
Quick Facts:
Homewise Insurance
Established: 2006
Line of Business: HomeOwners
States: FL, LA, SC
Direct Written Premium: 230 million
85 Employees
Technology and Services: BPO
2008 Statistics HomeWise Florida BPO data processed
Data Processed 80,081
Payments Processes 190,000
Call Volume 162,538
New Business + Assumptions 118,317
Renewals 49,082
Active Policies 119, 431
P+D Mailings 741,105