Arrowhead’s “lift-out” model fuels growth and work-at-home strategy

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Case study: How Arrowhead’s “lift-out” model fuels growth


  1. Arrowhead has pioneered the “lift-out” model, taking program management off carriers’ shoulders and providing resources needed to succeed.
  2. Our latest success is Core Commercial, a joint program with carrier QBE. It was completely revamped and operational in 50 states, in less than 2 years.
  3. Innovation has been our key focus for 30 years, particularly in technology. Our hundreds of employees were able to pivot quickly to work from home.


In its nearly 30-year history, Arrowhead has grown by being flexible, able to pivot at almost a moment’s notice to take advantage of a market opportunity. The coronavirus pandemic did little to disrupt workflows in Arrowhead’s seven offices.

“Close to half of Core Commercial’s workforce was already working remotely as QBE employees, along with many of Arrowhead’s workforce. They’ve been avid Teams users and adept at video conferencing and using cloud-based technology,” said Tom Kussurelis, COO. “Our Information Systems and Information Technology teams had begun adding hardware and new software platforms, in anticipation of the coming issues, as early as January.

“We like to say innovation is our middle name, and since we’re a tech-forward company, the transition to work from home has required a lot of attention, but has been straightforward,” he added. “We’re thriving and innovating in spite of COVID-19.”

Arrowhead is highly active in supporting new Insurtech efforts. We’ve employed dozens of remote-working underwriters and program managers. And we’ve pioneered a business solution we call management “lift-out” from carriers to Arrowhead’s administration. Our latest? The lift-out of QBE’s small commercial insurance program (under $100,000 premium).

“We took over management of the program a couple of years ago and quickly turned it. We already had the support teams and systems in place to give the program the attention it needs,” explained Kussurelis. “’Spearheading innovation’ is our brand essence, reflecting our commitment to often taking a novel approach to property & casualty insurance programs.”

“In the case of this small commercial lift-out, the carrier maintains its position as the source of capital and paper,” explained Walter Grote, president of the new program called Core Commercial. “One reason they selected us is because we have access to more agents, the ability to deliver more customers and the capability to service those customers throughout the life of the policy.

“Plus, many of these QBE employees were remote workers. Arrowhead was already very familiar with the remote working platform, since many Arrowhead employees also work remotely,” he added.

Related: Innovation, Insurtech and Arrowhead: our recipe for growth


The challenge

With over 30 million small businesses in the US, the small commercial insurance space is continually evolving. It represents growth potential for a carrier with the right appetite. But not every carrier is set up to underwrite and service a large volume of small policy transactions (under $100,000 in premium). Large multinational carrier QBE had other priorities, investing in other lines of business. They faced a decision about the future of its small commercial book of business.

Related: QBE, Arrowhead Partner on Small Commercial Insurance Program


The “lift-out” solution

QBE transferred operations that were driving the majority of the expenses to Arrowhead: Operations, Distribution, Premium Accounting, Customer Service, Underwriting and Marketing. QBE employees in these roles transitioned to the Arrowhead team. Core Commercial products and services were refreshed, updated and automated. Billing, collections and customer service were integrated into Arrowhead’s Centers of Excellence.

“Nearly half of our employees were already teleworkers,” explained Grote, “and they simply pivoted into their new role with Arrowhead.”


Lift-out results

Core Commercial was born. In 18 months, eight lines of business were up and running on a brand-new system. Forms were filed in all 50 states, allowing producers to quote, submit new business and service policies on Arrowhead Exchange. QBE continues to hold the paper and capital.

“The teams from Arrowhead and QBE came together and moved with precision and speed,” says Lisa Stahl, Commercial Division’s chief operating officer. “To my knowledge, no one has executed a transfer of this magnitude in this short of time.”


Innovation, Arrowhead-style

“Arrowhead is unique in that we can ‘lift out’ the part of the portfolio that’s costing the carrier and turn it into a program,” says Stahl. “The carrier pays us a percentage of the premium and the majority of its expenses disappear.”

Stahl continues: “Through technology and automation, Arrowhead can deliver better service level standards to carriers like QBE, improving retention and optimizing growth. Agents and customers love the service commitment and bring us more business. And QBE can grow its footprint via Arrowhead agents.”


The lift-out lesson

The lesson for carriers and Arrowhead? Don’t give up on a book with growth potential just because it costs too much to service.

“Arrowhead doesn’t invent the technology,” says Kussurelis. We bring the technology and know-how to increase efficiency, reduce expenses and create a runway for profitable growth for our partners. That’s exactly what we did for QBE. It is truly a differentiator.”