PRODUCT: Quantum 2.0 Homeowners
BEST RATING: A++ (Superior)
AVAILABILITY: Coverage is available through agents and brokers appointed with Travelers.
FOCUS: After launching Quantum Auto 2.0 in 2014, Travelers is now following up with the homeowners product. Eric Nordquist, senior vice president, product management at Travelers, says focus groups and research on the Quantum product line gave the company a clear vision of the attributes the product needed.
“It has to be affordable because it’s a very intense and competitive environment,” Nordquist says. “At the same time, there have to be added features for our customers and our agents. And then, what’s really important to our agents is that it is stable. There’s a history in the insurance business of moving prices around very dramatically for un-intuitive reasons—it’s got to be stable over time.”
COVERAGE DETAILS: The Quantum 2.0 homeowners product has three levels: Protect, Protect Plus and Protect Premier. “The core principle is that not every customer is treated the same,” Nordquist says. “In the old world, we had one bundled product with very little flexibility. Now, if you only want $1,000 of jewelry coverage, then you can get our strong Protect product. Or if you need more, up to $5,000 or so, you can go all the way up to Protect Premier.”
Once the agent and customer select level, they can then add additional coverage packages or the Premier additional coverage package, which addresses the amount of re-placement cost.
“After that is where the magic happens in my mind,” Nordquist says. “You have value-added packages and endorsements that are tailored to the customer’s needs.”
For example, “if someone wants rating or pricing stability, we are going to be introducing what we call the loss forgiveness package. If you have a loss, we aren’t going to change your rate,” Nordquist explains.
If an insured has concerns about their deductible, Travelers offers a Disappearing Deductible endorsement. If they want peace of mind about their washer and dryer, Travelers offers equipment breakdown coverage.
“But again, not everybody wants all of that,” Nordquist points out. “From a product perspective, it’s pretty flexible.”
UNDERWRITING: Norquist notes that one of the benefits of the Quantum 2.0 product is a streamlined application and underwriting process. Instead of asking a question on an application, Travelers can now bring in three times more third-party data—enabling underwriters to pre-fill five times more application questions, and saving time for the agent and consumer.
“There will always be an opportunity for our agents to take a look and make sure the data is accurate, but when we do the pre-fills, the underwriting of the product becomes much more streamlined,” Nordquist says.
Travelers is using a number of new factors in underwriting the Quantum 2.0 homeowners product, Nordquist adds: “There’s a tremendous amount of data available about the actual household. In the past, we would have to go through a lengthy process of understanding the type of home, type of construction, type of roof, things like that. Now, there’s third-party data that can bring that information.”
Another important factor is detailing what is inside the house. “We’re actually starting to look at things like the number of occupants, the number of bathrooms—things like that really do matter,” Nordquist says. “It matters in how the product performs, but also to make sure that our consumers have the appropriate amount of coverage.”
Nordquist says third-party data is not 100% accurate, as it is dependent on local records. But Travelers is trying to provide as much information as possible so that “the agent can make sure it’s the most appropriate quote.”
MINIMUM PREMIUM: None.
TARGET: Travelers has a broad appetite and is able to quote approximately 85% of the homeowners marketplace. “But we certainly know what’s important to our agents is customers with assets—rounded customers—because that is a more highly tenured customer and it’s better for both of us if there are more lines,” Nordquist says. “So while we have a broad appetite, we are focused on making sure that we have rounded business.”
COVERAGE TERRITORY: All U.S. states.
CONTACT: Eric Nordquist, senior vice president, product management; Travelers, One Tower Square, Hartford, CT 06183.
Katie Butler is IA editor in chief.