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Fair Isaac Automates Auto Club Group's Underwriting Process with Powerful Business Rules

Published
  • October 01 2005, 1:00am EDT
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REVIEWER: Michael Koscielny, director of regional underwriting operations for Auto Club Group.

BACKGROUND: Auto Club Group (ACG) has been one of Michigan's largest auto insurance underwriters for more than 75 years. As ACG began to expand outside of its home state of Michigan into six neighboring markets, it recognized the need to standardize underwriting processes, not only for its own agents but also for independent insurance agents. Committed to creating an analytic solution that supported and won the use by independent agents, ACG consolidated three different rate-quoting systems from an archaic architecture that hosted two different systems on separate processing systems.

PLATFORMS: ACG's mainframe system acts as the central information hub and enlists Fair Isaac's Blaze Advisor as the engine to interface across the different IT systems. Blaze Advisor and MQ messaging facilitate communications between the COBOL-based mainframe, WebSphere applications and DB2 databases.

PROBLEM SOLVED: To efficiently support market expansion and continued profitability, ACG identified the need for an automated underwriting solution to accompany any external Web-based portal that would provide agents with a quote. In addition, an automated underwriting system would result in improved loss ratio, expense ratio, cycle time and quality improvements across the entire business. In order to perform automated and analytic underwriting, the team defined the need for a rules-based architecture wherein the underwriting rules could reside and then be executed against existing and prospective policies.

PRODUCT FUNCTIONALITY: ACG created more than 3,000 centralized business rules that drive decision processes for home and auto underwriting. The solution executes decisions from a centralized legacy and regional systems and incorporates external data sources such as driving records. Blaze Advisor executes the policy quotes and publishes them in XML so that they are easily distributed and readily available to be incorporated across quoting systems. ACG recognizes Blaze Advisor's robust analytic capabilities when applied to ACG's underwriting process.

STRENGTHS: Blaze Advisor provides ACG with a decision framework to precisely execute decisions, leverage multiple decision components from its legacy and regional systems and to provide access to external data sources, such as driving records. The system calculates and assigns pricing tiers, then automatically executes an action such as making a pricing offer for desirable candidates or removing ineligible drivers that might have multiple violations. The rules-based analytic solution positions ACG as a strategic business practice, in which processing comparative insurance rate information in real time and automatically providing a personalized competitive quote to our internal and independent agents helps us win more profitable business.

WEAKNESSES: One area that could be improved is how the product pushes and publishes analytic rules directly to an end-user portal and Web interface. This was not available yet in Blaze Advisor, and we partnered with Accenture to achieve this functionality.

SELECTION CRITERIA: Along with Blaze Advisor, we reviewed AON CA and ILOG. Accenture had experience and achieved success using Blaze Advisor on a similar project that ultimately led to our decision.

DELIVERABLES: With new states and auto clubs becoming part of the ACG portfolio, the introduction of Blaze Advisor provides rule templates that allow for easy future updates and replication of business processes and policies. The rule maintenance screens in Blaze Advisor provide a simple way for ACG analysts who know insurance and business to easily update business rules and policies that power the analytic solution. ACG has lowered expenses, improved processes and increased overall business results. Before the new Blaze Advisor rules-based system, 100 percent of all applications were manually reviewed, and now 99 percent are processed and bound through the automated system. There has also been a 35 percent increase in applications processed with three times as many independent agents as part of ACG's network.

VENDOR SUPPORT: Fair Isaac offered training and expert on-site assistance during the pre-project and implementation phase. Fair Isaac continues to be actively engaged in our analytic solution and future plans.

DOCUMENTATION: Documentation can be used to get the product up and running.


Fair Isaac Blaze Advisor
Fair Isaac Corporation
901 Marquette Avenue
Suite 3200
Minneapolis, MN 55402
612-758-5200
www.fairisaac.com


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