Embracing technology, reducing risk

Digital technology sometimes makes it seem that we live in magical times. It’s transformed any industry you care to name, making it possible to do things today that would have been unimaginable even a decade ago.

This is as true in the insurance business as it is in any other — just ask Bill Lampe, president of Heritage Mutual, a firm headquartered in Preston, Iowa, with branches in Eldora and West Union.

“In this hard reinsurance market, one major concern for us has been the over-concentration of risk,” he said. “We were looking for a tool to illustrate and manage our spread of risk, in aggregate and by line of business, and we found what we were looking for at the Grinnell Mutual Summit event back in June of this year.”

That was where Lampe saw a presentation by Ben Zimmerman, CEO and founder of Madison, Wis.-based software developer Opterrix. Opterrix promised to “proactively identify, quantify, and mitigate avoidable losses” for mutuals by bringing together data science, meteorology, AI, and cloud computing. Zimmerman’s presentation was enough to convince Lampe to give Opterrix a closer look.

“Ben mentioned during his demo that there were some Missouri mutuals using the platform,” Lampe said. “We reached out to one of them to get a sense of how they were using the product, and based on what we learned, we knew we wanted to do the same thing.”

Lampe saw that the Opterrix platform would give Heritage the ability to map risk more precisely. “Our underwriters can use the Opterrix dashboard to see what the weather has been like in an area both at that moment and historically,” Lampe said. ”Any time there’s new weather event, the platform can give us a report on estimated damages in a given area, so we can get a sense of how badly any one storm might affect our book.”

With the Opterrix platform, Lampe said, it’s possible to get a very fine-grained view of the risk landscape. “If you get a claim for hail damage,” he said, “you can pull up the Opterrix info and see what size that hail was. You can use the platform to check on the concentration of risk in an area by setting any geofence border you like. You can choose a three-county area and ask the system to flag you when you’ve reached your defined maximum total insurable value for that territory.

“You can also set up a map so it shows you different policy types, assigning them different-colored pushpins. You can drill down to view locations of policies with certain coverage limits. The platform has lots of additional features that we may not need, but those two basic functions — enabling us to manage exposure and see what the weather is, currently and historically — easily justified this new tool.”

In the end, while there’s a wow-factor associated with technology like this, Lampe emphasized that what ultimately drove Heritage’s decision to adopt the Opterrix platform was the ability it gave the firm to do what good insurance firms always have to do: make smart underwriting choices.

That’s not magic — it’s just good business.