TechExec: Gilbert Harrap, CEO at InsurX
June 14, 2022 James Tribe
In our latest interview James Tribe, Head of Content for Magellan™, caught up with Gilbert Harrap, Chief Executive Officer and Co-Founder at InsurX.
James: Why did you start InsurX? What’s the problem you’re trying to solve?
Gilbert: We started InsurX to modernise capacity trading in the complex commercial insurance market.
Syndicated complex commercial insurance is some of the most analogue business transacted at Lloyd’s. New business is usually sent to wholesale brokers, who split it up between a panel of leaders to set pricing. They then look to build a follow group of carriers to provide capital. Brokers then must find interested carriers and offer incentives to get them to back their risks. It’s a lengthy, inefficient, and manual process.
James: How does InsurX fix this?
Gilbert: At InsurX’s heart is a matching algorithm: we approach brokers and ask if they want access to new capacity in return for transaction-level policy, claims, and participation data. In parallel, we ask carriers to set rules on our exchange in line with their portfolio preferences. Brokers log in to our intuitive platform, search for capacity that matches their risk characteristics, and receive offers to generate capacity from carriers whose rules match those characteristics. InsurX can then bind the risk on-platform, or carriers can bind off-platform if they’d prefer. The simplicity, speed, and depth of data means that more and better business can be written at reduced underwriting cost.
James: Why hasn’t someone automated this already?
Gilbert: The insurance market is inertial. A comparative lack of fresh faces coming into the market from pioneering industries – compared with other financial services, for example – has made it very difficult for insurance firms to digitise.
But things are changing: talent is coming into the industry, and now’s the time to capitalise for three reasons:
- It’s a hard market. Brokers are finding it more difficult to serve their customers.
- Future at Lloyd’s is no longer a slide deck – it’s reality.
- Covid showed that we could still do business and make deals, even if we weren’t sat face to face.
We’re building a different type of insurance company: one that cherry-picks the best of both worlds, combining insurance knowledge with tech ideas.
James: Lloyd’s is still struggling with the scale of the challenge to digitise. Why will InsurX make such a difference?
Gilbert: We think InsurX will make a difference because both sides of the market – carriers and brokers – are incentivised to use our exchange. Insurance firms trading capacity in the analogue age are leaving money and convenience on the table.
It’s a growth flywheel for participants: the more data brokers and carriers share; the more capacity brokers and carriers can trade. And those trades will become better: data exchanged in the platform will allow carriers and brokers to optimise their trading in a way that isn’t possible in the analogue status quo.
James: Isn’t this just digitising the parameters that underwriters have always used to decide what business to write?
Gilbert: In short, yes. We’re a marketplace for carriers and brokers to digitally trade capacity. We’re just digitising underwriting parameters in the same way that Skyscanner digitised the physical travel agency, or hedge funds digitised capital markets.
What we’re doing isn’t a new concept: it’s just new to insurance. The insurance market has always used data, but it’s been mainly used at an individual transaction level. Our access to a much greater volume of structured and enriched data means more business can be written faster, better, and cheaper.
When carriers can confidently make data-driven decisions and optimise their portfolio growth, we’ll see some existing carriers really run with it and excel in the digital world: the opportunity is in the tens of billions of dollars. There’ll also be new entrants to the market – bringing with them fresh people, fresh capital, and fresh innovation.
James: What’s the first question businesses should be asking themselves to prepare for this transformation?
Gilbert: Fundamentally, they should be asking themselves, “How can I capitalise on this opportunity?” For brokers, this might mean using tech to offer a better product to their customer at reduced cost. For carriers, they’ll be wanting to ask themselves what they want their portfolio to look like in the coming years and think about what risk appetite they need to get there.
James: What can we expect to see from InsurX in the coming months?
Gilbert: We plan to finalise partner broker and partner carrier requirements so that InsurX capacity will “go live” in the later half of this year. We will then spend a lot more time building out our algorithmic matching exchange by listening to our customers so that we can become a core growth engine for our partners.
The Oxbow Partners View
Last year, we argued that Lloyd’s was in the ‘calm before the storm’, poised for rapid digital acceleration over the next few years. A number of players have emerged to leverage this trend: for example Brit’s Ki syndicate; Howden’s algorithmic MGA Rethink; and Carbon’s syndicate-in-a-box and tech platform Graphene.
Platforms such as InsurX are an interesting addition to the landscape. Other parts of the UK insurance market are already dominated by trading platforms, most significantly UK SME where Acturis and OpenGI lead. As digital and data maturity increases, and top-down mandates become more robust, we see platforms playing an increasingly significant role in the market.