This article was produced in partnership with Foresight Insurance.
Every insurance company is built on the twin pillars of servicing claims and underwriting risks. But for Foresight Insurance, the first insurtech specializing in middle market workers’ compensation for manufacturing, construction, and agriculture industries, first and foremost it’s about making a material difference by reducing claims for the businesses they serve.
“A lot of loss control, especially in middle market, isn’t really focused on improving the quality of the safety at an organization – the insurance company’s primary goal is figuring out the right price and not preventing claims,” said Kelly McLaughlin, Foresight’s head of insurance. “We take a different approach, because we are passionate about creating safer workplaces where everyone can come home safe at the end of their day. We work to organically change the quality of a business by partnering with our producers and customers to help mitigate and eliminate risks. Leveraging our proprietary Safesite technology and coaching, we don’t just provide insurance, but we help companies become safer, avoid claims and ultimately reduce the amount they spend on insurance. Our customers care about their employees, eliminate hazards, and drive down their insurance costs. More employees stay safe, employers reduce their cost of insurance, and our producers are able to demonstrate exceptional value; everyone wins.”
Foresight’s Safesite technology and coaching is its primary differentiator, and nearly 10 years of research and development have proven to significantly reduce claims, especially for companies with higher-than-average e-mods, which in many cases simply don’t know what they need to do differently. Foresight mobilizes a team of internal safety professionals to regularly work with safety managers at the insured to track, measure, and monitor how things go over the course of the policy year. Together, they figure out the key drivers of the losses and what the opportunities are for change. For one landscape company, using the technology helped them cut their claims in half during their first year of working with Foresight. This reduction in claims translates to enormous savings to the overall cost of their insurance program and improvements in productivity with more employees able to work. Best of all, the company is now much safer and an even better place to work for its employees.
“A 50% reduction is a phenomenal outcome but it’s not an outlier,” said McLaughlin, who joined Foresight in April. “We’ve spent almost a decade building and honing Safesite to the point that we can predict that insureds who adopt, own, and implement the technology – that’s the make-or-break difference – see an average of 18% reduction in claims frequency.”
Since coming aboard, McLaughlin has overseen the collection and translation of third-party data into actionable insights that help the team drive business along all the phases of underwriting, from prospecting to pricing. Partnering with top producers to create new opportunities to win business together has fueled significant growth, and now Foresight can identify opportunities in target geographies, know whether a company’s having good or bad claims experience, and even assess whether Safesite might help them improve. “Our goal is not just to win business, but to focus on specific opportunities where we can bring something unique to the table and help a business improve its safety.” The data is also mined to determine what the customer’s peer group looks like in terms of claims and then illustrate what it costs in terms of money, insurance, and lost productivity when they have significantly higher claims than their peers.
“We’ve taken our approach from idea to execution and we’re doing this in every market where Foresight operates; we’re really coming into our own now,” said McLaughlin, adding “while it is great to see the company succeed, it’s not about us. We are here to help our customers create safer places to work by partnering with our distribution partners who help us identify those risks where we can make a difference and, together, we grow our books organically.”
Everything Foresight does flows to its main tenant of helping make every business, even those struggling with safety, to be best-in-class, and McLaughlin has set his sights on specific goals in claims, underwriting, and product to ensure delivery of that goal. Though the best claims are ones that never happen, and that truth underpins the safety-first approach which is the core of Foresight’s business, a major focus for McLaughlin has been optimizing Foresight’s claims handling process. He switched TPAs in order to “harness more data and leverage more predictive models to identify which claims are going to go bad sooner and employ a heavier intervention up front to change the trajectory of the claim.”
Foresight currently sits at 25% fewer claims per adjuster than the industry average, which is “the sweet spot for us,” as adjusters are then able to take the time required to properly work through each claim, empowered with the different analytics tools Foresight uses, and collaborate with stakeholders to achieve the best outcome: getting people back to work as soon as possible.
“I spent half of my career doing claims, and I often ran into large claims that started as minor injuries but just went on the wrong path,” McLaughlin said. “They’re the ones that make a huge difference in the overall profitability of the company, but more importantly we have the opportunity to ensure that the injured workers we serve get a great outcome.”
McLaughlin has also been building the engine Foresight’s underwriters use, fully integrating different pricing technologies to ensure benchmark pricing and key drivers of risk are in line with other top-tier carriers, but Foresight has taken it a step beyond the experience mod and benchmarking models. Recognizing that the best of the best are those who blend the scientific and artful aspects of underwriting, Foresight’s strategy is simple: employ a team of very experienced underwriters and empower them to make decisions. For McLaughlin, having deep expertise on the team stops “knee-jerk reactions in terms of changing underwriting appetite or over-responding to a loss on a particular account.”
“I take a more evidence-based approach in underwriting and ask myself if it’s a materially different risk than I understood yesterday, or is it just volatile random noise, and a lot of times it’s just a little random noise. We understand, especially with the industries we cover, that every once in a while we’re going to have a larger loss and it’s not indicative of the quality of the risk. We’re leveraging our Safesite technology and picking quality risks that are going to have fewer accidents, but not none.”
Since binding its first policy in 2020, Foresight has received over $2 billion of submissions and is very selective in what risks it takes on. McLaughlin immediately took steps to fully automate the submission process, and by delegating the data entry and processing to machines, underwriters instead spend their time figuring out where the company’s approach resonates, problem solving with customers, and working with producers on opportunities in the pipeline – or in other words, “doing the type of work you want your underwriters doing,” McLaughlin noted.
Another critical priority for McLaughlin is Foresight’s steady geographic expansion, which is driven by extensive market research. In October, product filings were finalized and Foresight is now open for business in the southeast part of the country, with Georgia, North Carolina, and South Carolina the next key focus areas. In November, the company announced new capabilities to offer commercial auto in key industry classes when written with the workers’ comp. Again, it’s the external data that helps illuminate the path forward because the strategy isn’t to appoint every broker in every market, it’s to find the ones who understand that what Foresight brings to the table makes a meaningful difference for policyholders.
“These potential customers can get insurance from any other company, and it’ll be pretty much the same, but we’re a tech-enabled insurance company – we’re built differently and have been from the beginning,” McLaughlin said. “If you’re interested in safety, and you want to make the commitment to having people actually improve the quality of the workplace, Safesite is the right technology for you – and Foresight is the right company to partner with.”
