Sign in Subscribe
Insurance industry

Safeco Corp. Expands Personal and Commercial Lines through Technological Approach

Strategic Insights

— 1 min read

Safeco Corp., a leading property/casualty insurer, is implementing a technology-driven approach to expand its personal and commercial lines of business and boost profitability. The company is using data and technology to develop "multivaried" approaches to risk segmentation, allowing for multiple price points to match the right rate to the right risk in various products, such as auto, homeowners, and small commercial insurance. According to Michael LaRocco, president of product, underwriting and claims for Safeco, this approach enables the company to offer more customers the opportunity to be insured and provides "more shelf space, more products to sell" for independent agents.

Key Takeaways:

  • Safeco Corp. is expanding its personal and commercial lines of business through a technology-driven approach that matches rate to risk.
  • The company uses 10-15 factors that predict loss and correlates them to result in a "multivaried" approach to risk segmentation.
  • Safeco's products are segmented on a single platform, allowing independent agents to sell a wider variety of rates to customers.
  • In homeowners insurance, Safeco offers about nine price points, while most companies have only three, allowing for a wider variety of rates for customers.
  • The company's latest approach to risk segmentation and pricing is expected to lead to more consistent profitability, particularly in homeowners insurance.
  • Insurers writing business in Louisiana, Mississippi, and Alabama are likely to take a financial hit from Hurricane Katrina, with estimated insured losses ranging from $40 billion to $60 billion.

Statistics:

  • Safeco Corp. is the 18th-largest property/casualty insurance company in the United States, based on direct premiums written.
  • The company has 4.3 million personal and business policyholders nationwide and sells its products through about 8,500 independent agents.
  • Safeco's revenue is over $6.2 billion.
  • The company expects its latest approach to risk segmentation and pricing to lead to more consistent profitability, particularly in homeowners insurance.

Sources:

  • A. M. Best Company, Inc.
  • COMTEX
  • Independent Insurance Agents & Brokers of America
  • Risk Management Solutions
  • Comtex News Network, Inc.

Read more