Hyundai and Hawaiian Hurricane Insurance: A Case Study

“Our feeling has been that the insurance industry is using yesterday’s information and skill sets to solve today’s thinking. Federato’s solutions provided a whole different way of looking at an industry that has tons of data but struggles with how to appropriately use it.”
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Steve Doucette, CEO + founder

Framing the challenge

Hyundai and Hawaiian Hurricane have seen significant growth in their existing programs. Critical to their continued success were:

• Continuing to compete with larger US household names
• Maintaining controls around considerable cat exposures with plans to further invest in growth in 2021, the team engaged Federato in June 2020, hosting the Risk Ops platform could accelerate existing strategies and tactics.

Getting started

The teams started with a comprehensive deep dive into the existing approach. Hyundai + Hawaiian Hurricane had a unique understanding of distribution dynamics in their target markets. Equally important however was the proprietary approach to underwriting cat exposures that made this book of business attractive to reinsurance partners.

The challenge? The team needed a way to incorporate frequent shifts in appetite into their distribution channels to minimize cat risk accumulations. Critical, however, was maintaining producer relationships in the face of an increasingly competitive environment.

The Solution

By taking advantage of Federato’s advanced federated architecture and Risk Ops platform, Hyundai and Hawaiian Hurricane integrated their policy administration data with existing cat models and 3^rd party data sources. Together these resources take advantage of machine learned dynamic optimization to maximize premium subject to existing rate goals, appetite restrictions, and cat accumulation constraints. By providing a proactive “punch 1^st” view of in-appetite accounts where Hyundai + Hawaiian Hurricane had a distinct pricing advantage brokers were able to target marketing efforts while avoiding adverse selection issues.

Outcomes

Hyundai + Hawaiian Hurricane contract to use the Risk Ops solution in production. Federato’s systems power care underwriting + distribution program efforts. To date, the solution has helped to increase growth while decreasing reinsurance costs through improved confidence in the group’s cat strategy. The Risk Ops approach has also played a key role in launching a new line of business for 2021.

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Hyundai Insurance Fire + Marine

Hawaiian Hurricane Group

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Operations: USA – Korea

Website: hyundaiinsuranceusa.com, hawaiianhurricanegroup.com

Lines: Commercial Property,

Hurricane, Personal, All Other Peril

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Employees: 100-500

Key benefits of Risk ops:

• More efficient growth
  Portfolio-aware underwriting maximized the risk-reward equation with every new policy

• Improved return on Reinsurance
  Proactively reducing the coefficient of variability provided a distinct advantage at the negotiating table

• Decreased marketing cost
  Faced with new larger market entrants the organization capitalized on existing market knowledge.

• Maximized producer productivity
  Combining appetite + winnability data, gave tons consistent visibility into where to spend time.

• New lines of business
  Increased underwriting confidence allowed a new All Other Peril product to launch in real time.

“The whole idea of Risk Ops just opens up new ways of thinking. It’s not just marketing or underwriting or actuarial – I can make an impact across all of it. It just blows me away that our company can use this tool for breakaway from the competition.”

Steve Doucette, CEO + Founder

Federato is an underwriting platform for Risk insurance carriers that uses a collaborative, real-time approach to coordinate risk selection and proactively safeguard your portfolio. Learn more about our Risk Ops solutions here.

Contact us: 812-455-5538 or schedule at federato.ai

Read the case study here