Much has been made of the importance of technology as a critical route to London maintaining its competitiveness and viability as an international insurance market. It’s a philosophy that Hiscox has enthusiastically adopted particularly in its flood cover and property binding authorities, where the development of FloodPlus and BindPlus digital products have helped coverholders deliver benefits such as quicker quoting and policy renewal to their customers.
A nimbler approach
“Going digital with FloodPlus has allowed us to deploy aggregate to flood risk in a more sophisticated way,” says Hiscox London Market’s Tom King, Flood Line Underwriter. “It means we can use real time modelling and pricing to make better underwriting decisions. We can then manage our aggregate and provide more accurate pricing, to deliver a better long-term product for customers.” Crucially, it means a London market insurer can be nimbler against the competition. “Making a price change and seeing the impact on the book used to take months, but now it can take minutes,” says King, “and a few hours later we can see, by county or state in the US, how that might have changed demand for the product.”
“Going digital with FloodPlus has allowed us to deploy aggregate to flood risk in a more sophisticated way,” says Tom King, Flood Line Underwriter.
Developing APIs
Both FloodPlus and BindPlus have developed application programming interfaces (APIs), enabling two or more software applications to communicate with each other, which allow coverholders to provide more choices to their retailers, or agents who sell to the end customers. The APIs give the coverholders more flexibility as to how their customers can access their product and limits the friction in the transaction journey from quote to buy.
However, it is not enough to develop a digital strategy without working closely with the distribution partners. “It is no-good building a digital product like BindPlus in isolation and simply pushing it down to the customer,” says Joseph Pennyfather, Binding Authorities Line Underwriter for Hiscox London Market. “It has to work for everybody, from our wholesale partners and in turn, to their retail agents, and ultimately customers. That’s why it is vital to work with partners at the development stage of the digital product who can inform the build and make sure it is right for them.”
“It is no-good building a digital product like BindPlus in isolation and simply pushing it down to the customer,” says Joseph Pennyfather, Binding Authorities Line Underwriter
This collaborative approach is an important part of the development of a successful product agrees Colin Tinley, Senior Vice President, Personal Lines and Flood at US global specialty insurance distributor Amwins, which was an early adopter of Hiscox’s FloodPlus product: “We give Hiscox feedback on the API itself in terms of its functionality, as well as the competitiveness of the product. It really is a strategic partnership. The more information we can share with Hiscox about the market, the better they are able to fine tune their product and grow where they want to grow.”
Enhancing the relevance of the London market
One particular benefit of this collaborative digital approach is in maintaining and enhancing the relevance of the London insurance market to territories like the US. “London has to do things differently to access the business. Traditionally that was by offering capacity for distressed or unusual risks, which is still the case, but if we are delivering a product innovatively and digitally, that becomes a unique selling point and a plus for London,” says King. “FloodPlus, for example, offers a seven day wait period before a policy comes into effect on flood versus the 30 days from the US federally backed National Flood Insurance Program. Now we are quoting in real time we can give ourselves a sharper competitive edge.”
“FloodPlus, for example, offers a seven day wait period before a policy comes into effect on flood versus the 30 days from the US federally backed National Flood Insurance Program. Now we are quoting in real time we can give ourselves a sharper competitive edge.” Says King.
Tinley agrees that a distributor like Amwins sees the ability of a London market insurer carrying out some of the heavy lifting in the digital development of products, as a great asset. “When a carrier, like Hiscox, builds their own API with their own view of risk and embedded price, we no longer bear the cost of having to build out all those things on their behalf,” says Tinley. “They get better data such as pricing information in real time and we can focus on what is core to us, which is the distribution and underwriting of the product. The process helps to develop more of a strategic relationship between us because our interests are well aligned and demonstrates that for the London market to stay relevant, it must focus on being able to build out digital products like these.”
Of course, digital does not mean discarding the human touch. “We are never going to be a purely digital Syndicate,” says Pennyfather. “Human expertise and knowhow in a specialist market like ours is, will always be, at the core of what we do.” A view shared by Tinley: “Amwins is a people centric business. By leveraging technology, our underwriters gain efficiencies and a more accurate picture of risk, pricing, and underlying risk quality. Technology also enables us to build deeper human relationships with markets because we have a clearer picture of the portfolio we’re underwriting.”
“We are never going to be a purely digital Syndicate,” says Pennyfather. “Human expertise and knowhow in a specialist market like ours is, will always be, at the core of what we do.”
Leaders in the digital space
Nothing stands still, however, from a digital perspective, and both the FloodPlus and BindPlus products will continue to evolve to meet the needs of clients and partners like Amwins. “On Flood, we have our new updated API and product suite, and our revised appetite and policy wording. We have introduced an excess product automated through FloodPlus, filling a gap in the market for insureds,” says King. While for BindPlus it’s about “helping partners on board with the latest API and leaning into the high value homes market in addition to a drive into wind deductible buybacks,” says Pennyfather. “Ultimately, we have built out our digital capability over the last eight years and it’s our aspiration to be leaders in the digital space.”
And the opportunity is worth challenging for concludes King: “There is plenty of potential for the private insurance market. But how do we access the existing premium that is currently underwritten elsewhere, or sell to those customers who choose not to buy flood cover? How do we price it and capture it? The only way to do that is by having a digital strategy to better collect and use data, while not forgetting the role of human expertise in really delivering value for our partners and clients.”
