Reducing the cost of distribution is a priority for Sequel’s clients

Reducing the cost of distribution is a key concern for clients of Sequel, a Verisk business that focuses on complex commercial and specialty insurance software innovation. Chief commercial officer EMEA, Paul Latarche, told Monte Carlo Today that carriers are looking for ways to reduce the cost of access to certain business lines.

“It’s hard to make an underwriting profit, and it’s even harder if you are paying 30 percent away before you even see the business, because you’re going to pay the agent, the broker, the wholesaler and the coverholder,” Latarche said.

“You are already 30 points behind before you start writing something. The cost of distribution is a big concern, along with the cost of then administering the back-office systems that support it.”

Sequel’s product, Rule Book Hub, is proving popular as a way for insurers to access brokers’ distribution much more efficiently. Insurers load their insurance products into it and brokers trade risks through it.

“It was launched about 18 months ago and is picking up a lot of volume,” said Latarche.

He added that Rule Book Hub brings control to delegated business—the carriers now have no bordereaux. Instead of having to wait to know what they are insuring until five to six weeks after it is live, carriers have the information instantly.

“This gives you a lot more control when you give that pen away—you set up the rules in the system. They can write only up to that amount, these are the products, this is the geography, right down to a rule so if they try to do anything around that, the system will reject it or refer it to the underwriter,” he explained.

The cost savings are another major attraction.

“The new major broker we brought on to the platform is telling its insurer clients it is expecting the platform to save up to 10 percent of the cost of doing business.

“There is no more rekeying, and if it’s inside the terms of the rules they get a quote back straight away.”