Have you ever watched a home renovation show? The ones where they buy the fixer-uppers, gut them, and somehow end up making a $2 million profit from the renovation? The experts walk in and can tell immediately if the work will pay off. It’s impressive, almost like a superpower.
The best part is comparing how much they paid for the house originally vs. how much they sold it for in the end. They never really take too much of a risk either, without knowing what the characteristics of the house are first. It usually comes with a list of rules:
- Built before a certain date
- No mold problems
- Renovations can be completed quickly
- In the right location
- Good housing market
And typically, it pays off. Rules may keep them rigid, but it protects their investments. The only way they’re willing to take risks is if they have fully-encompassing, fast information at their fingertips.
Protecting the Investment
It’s the same with insurance too. Carriers that specialize in commercial underwriting tend to have specific appetites. They’ll use a number of rules to make sure they know what they’re getting out of a prospective policyholder. If you don’t fit the appetite, you don’t make the cut. No one wants to encounter surprises 6 months down the line, when they realize the café they thought they were insuring is actually a nightclub.
In insurance, more than 90% of customers are honest… you just have to watch out for a select few. Would business owners intentionally use the wrong NAICS code to misclassify their establishment and get a cheaper premium? Or would they lie about their location to seemingly reduce crime rates in the area? People can be devious, and underwriters have a huge task on their hands to uncover the truth. Hence, the appetite.
When to Take a Risk
What if expanding your appetite could make you an extra $6 million in written premiums? Would you take a risk then? Some companies have figured this out and are experimenting with less rigidity. Increasing risk may demand a higher price for that “just-in-case” factor. How do you know if you’re armed with the information needed to offer the right premium?
With FRISS Underwriting Insights, you have access to thousands of data sources instantaneously. Instead of taking 5 to 7 days to understand a business risk, you can do it in just seconds. This tool is an underwriter’s best friend. Our software will tell you right away if a business is misclassified.
Listed under the wrong address? We’ll let you know. A dozen liquor license violations when they told you they don’t even serve it? Yeah, we’ll catch that too. Our technology is so smart that as customer reviews are being updated on Yelp, our keyword search can discover exactly what the establishment offers.
What’s Next
Don’t be fooled by mischievous policyholders anymore. Our data sources are on it. FRISS Underwriting Insights is ready to give you the freedom to take on a wider appetite and keep fraud outside your book of business at the same time. We don’t just claim to be experts on this. We consult the best sources on the worldwide web and blend their information together to find the truth, so that we can assign a level of confidence to our results, for you.
Are you ready to get started on your newest money-making venture? This time, forget renovating an ocean front property and invest in FRISS Underwriting Insights instead. Find out why a Tier 1 Carrier’s Senior VP & Head of Casualty Business said “Writing insurance is like trying to drive a car forward while looking at the rearview mirror – you are always trying to base your decisions on what you did in the past. We wanted to turn that on its head to make sure that we write risks based on most current information, which Underwriting Insights enables us to do.” Click here to learn about leveraging Underwriting Insights and schedule a demo to see our AI work in real-time!
