Industry veteran’s Convex has now raised over $3bn as it seeks to shake up sector
Mr Catlin launched Convex two years ago, setting out to repeat his earlier success with the eponymous Catlin, which he founded and sold to XL Group for $4.1bn in 2015, and to take on rivals such as Axa, Hiscox and Beazley. Achieving the goal of shaking up the market raises the question "Which brokers will lose out?".
Hardening markets means rising premiums and higher revenues for brokers. But to win that benefit brokers have to win capacity from underwriters looking for only the best risk. With the UK economy threatened by a double dip recessions and most nations uncertain about the recovery time from pandemic driven lockdowns many commercial customers, and therefore brokers, will have a harder job getting capacity. They will have to make a very good case.
Add to that competitive pressures from Convex and other new ventures, the temptation for insurers to deal directly with customers and the threat of new entrants to the market funded by investors eager to share in the higher returns from rising premiums. A daunting prospect.
Underwriters look for better risk profiles yet the whole process of winning capacity and the equally tedious task of rebroking are generally rooted in highly manual and analogue practices. Where is the level of innovation and digital transformation seen in the top quintile of insurers?
You can expect to see that from the likes of Convex, Hiscox, Howden Group and many but what about the legions of wholesale and retail brokers still living in a world based on face-to-face meetings and analogue processes?
Carriers regularly get stick for being constrained by legacy systems, cautious culture, playing with new technology and not recruiting the talent and skills from other sectors to cope with a world changed forever by Amazon and other digital giants. A world where virtual experiences become the norm for convenience and effectiveness. Most, and certainly the top quintile, are addressing that and they will demand the same of brokers.
Either by adopting insurance platforms that effectively connect, communicate and orchestrate all the participants, activities, data flows and processes involves in matching commercial customer's needs and insurer's capacity.
That empower the broker to combine personal service with automation, great customer user experience, and the ability to gather all the evidence required in a form that underwriters will be more inclined to analyse and write cover for. As frictionless as possible whilst still being rigorous and methodical.
In 2019 we were driven by our largest customer to provide a virtual alternative to site inspections when lockdowns prevented these. The digitally enhanced virtual experience (D.A.V.E.) not only filled that gap but was found to provide a better service for commercial and P&C customers. The insurer is able to utilise the customer themselves to undertake surveys with customised data templates for every type of claims and peril.
Added to that photo and video evidence and where required live-streaming video plus necessary documents and certificates. All structured and incorporated into a single digital record 'under-writer ready'.
The very same digital service speeds up and reduces the costs of claims. Every time a broker has to revisit a claim adds considerable cost to a fixed revenue impacting bottom line profit. Reverse that into a single touch digital process and bottom line profits are enhanced whilst customer satisfaction with claims settlement soars.
Times are a changing as are a proportion of brokers with the digital vision, strategy and resources to win capacity and the trust of innovative carriers. We are proud to be at forefront of that with our digital carrier and broker platform 360SiteView.
Why not find out more? Please email me at Mike.Daly@360Globalnet.com
Higher prices could allow insurance companies to make good returns if there are no large natural disasters or other big claims over the next few years. The industry has already excluded pandemics from the vast majority of new and renewed policies. New companies such as Convex are particularly attractive for investors, as they do not have exposure to legacy claims from coronavirus.