COVID-19 kicks re/insurance into the digital era: Pro

The COVID-19 pandemic has kicked the re/insurance industry into the digital era, and presents a huge opportunity for insurtechs to get a foothold in the business and disrupt the market, according to Steve Lewis, chief executive at Pro.

“How will the overnight shift to digitally orientated working practices impact a market that has for 300 or more years been founded on face-to-face human interaction and relationships?” he asked.

“The London and other insurance markets more generally have been given an overnight kick into the digital era,” added Lewis.

“Will this open the door more widely for insurtech disruption, and who will be the winners and losers?”

Danny Maleary, chief executive officer at Pro MGA Solutions, a Pro subsidiary, said a “veritable smorgasbord of technology initiatives” will give UK-based managing general agents (MGAs) an edge over international competition in the future.

Maleary cited data-led underwriting, digital regulatory and compliance oversight and increased small and medium-sized enterprise (SME) parametric products as particularly exciting technological trends currently playing out in the UK. He also welcomed the emergence of international product portals that allow risk capital to showcase their products in new markets.

“Artificial intelligence (AI) will play a big part as well,” Maleary predicted. He said it will mean niche specialty MGAs won’t have to rely exclusively on specialty underwriting talent, leading to solid partnerships between underwriters who know their class well and clever AI systems.

“The more advanced uses of AI will deliver predictive vision and edge, augmenting human underwriting expertise alone,” Maleary added.

Coupled with the increasing supply of data from the internet of things (IoT) and cloud technology, it will be a boon for technology-driven MGAs, he said.

Maleary pointed to a change in attitude among insurance brokers towards the MGA model in recent months, particularly with delegated authority business becoming more important for brokers.

“It could be said that brokers are becoming more joined-up in their thinking, and we will all be looking carefully at what Lloyd’s does,” Maleary added.

Lloyd’s has said delegated authority is a key deliverable for the business going forward.

“Brokers are becoming more joined-up in their thinking.” Danny Maleary

Technical help
For the broader group, Lewis acknowledged that the shift to home-based working poses a threat to the provision of outsourced third party services, but insisted Pro is well positioned to take advantage of the new situation.

“The problems caused by the pandemic offer more opportunity than threat,” said Lewis. “We are looking to the future with confidence.”

He said Pro’s focus on providing services to onshore and near-shore high calibre SMEs, and its ability to help clients with more technical insurance processes where skills are often scarce, give it an advantage over many of its peers.

Pro is committed to developing deep domain expertise where it can provide a comprehensive offering that integrates skilled practitioners, process improvement and technology, said Lewis.

“We are not looking to be all things to all people,” he explained.

“Within each of our product and service verticals we have a clear focus on industrialising our capability and associated offering so that we can demonstrate delivery of market-relevant capability that delivers real and repeatable value for our clients.”

In claims, for example, Pro is not looking to be a generic provider that covers every claim type, Lewis said.

“We are looking to focus our offering around the lower volume, more complex claims where we can, for the run-off market or the live market.”

This will allow it to scale up its capabilities in a way that the market finds difficult to replicate, Lewis said.

“We can deliver an efficient and highly data-driven, insightful and thereby more effective indemnity offering,” he added.

“This type of business model is capable of then being deployed on a multi-territory basis.”