Twenty years ago, American Security Group (ASG) was an unknown quantity in the mortgage market. This small, regional insurer was providing specialty insurance to banks, credit card companies, and finance companies. The company had 250 employees and annual premiums of approximately $250,000,000.
Desiring to grow by expanding its products and markets, ASG charged a senior marketing executive with identifying ways to accomplish dramatic growth in an unserved market. Market research focused on the mortgage market identified a significant opportunity to revolutionize how mortgage servicers obtained insurance to cover the property risks imbedded in their portfolios.
The market research identified key unmet needs involving the process used to identify properties without sufficient coverage and then place the appropriate coverage in a much more highly efficient way. It was determined that placing coverage using a bi-directional interface linking the files of ASG with the files of mortgage servicer clients would dramatically shorten the time from identifying the properties that were without coverage to the time coverage was placed. This had three key benefits to the mortgage servicers: (1) greater efficiency resulting in lower costs, (2) lower risk profile as a result of fewer uncovered properties, and (3) far less mortgage customer dissatisfaction resulting from false notifications that their property was without coverage.
It was further discovered that a single computer processing company was process the files for nearly two-thirds of the top 100 mortgage servicers. This allowed for the development of one version of the bi-directional interface that could be accomplished in a matter of months for approximately $300,000. ASG agreed to design and fund the interface in exchange for a short-term exclusive. Within five years, ASG was the leading provider of property coverage in the mortgage market. This business segment is now the leading contributor to the company’s bottom line generating approximately $400,000,000 in pre-tax profit annually.