The pandemic won’t stop us — how KASKO took part in Lloyd’s Lab
By Sergej Tolz, Chief Operating Officer at KASKO
KASKO has been in business for five years now and over that time we’ve been through a range of different accelerators. We believe in innovation and it’s extremely important for us to keep making new contacts, getting feedback on our service and growing our business.
Earlier this year, we applied to Lloyd’s Lab and following a pitch, our InsurTech-as-a-Service solution was selected for the fourth cohort.
Lloyd’s Lab is a ten-week programme where InsurTech startups are given the opportunity to work with Lloyd’s market experts, gain access to a co-working space, potential funding and the chance to develop their ideas alongside their target audience.
Due to the current situation, the whole programme was carried out virtually. During the first two weeks, the team organised a range of introductory sessions where we learnt a lot about how the Lloyd’s Market operates and heard from various bodies and organisations that provide services to Lloyd’s.
The reason we love accelerators is that we learn something new about each market. With Lloyd’s, getting insurance is very distinct from what we are used to seeing in the retail and SME space. There are various types of entities that interact in different ways to process that we are normally used to, and even the terminology is not the same. On top of this, people within the market often interchange terms, which makes it even harder for an outsider to understand what is going on.
To give an example, Managing Agents are essentially the organisations that will underwrite insurance, something completely different to Managing General Agents, who are appointed by an insurer to solicit applications from agents for insurance contracts or to negotiate insurance. However, Managing Agents are also sometimes referred to as Syndicates, not to be confused with syndications, and are basically pots of money managed by Managing Agents to generate return for underwriting risk. These Managing Agents don’t sell insurance directly though, only selected Brokers are allowed to place risk with them, which can also be placed via Coverholders. Working in insurance can sometimes really feel like learning a brand new language.
Luckily, we had our mentors to help us navigate the lingo and who helped us understand the challenge in the market from their perspective and find opportunities where KASKO can help. We were very fortunate to have some amazing mentors who provided us with guidance: Monique Alder from Lloyd’s, London’s insurance and reinsurance market; Simon Richardson from Beazley, a market insurance and underwriting services company; Rob McLendon from Beat Capital, a venture capital investor focused on the insurance industry; and Elliot Arazi from The Hartford, a managing agent and insurance company.
What was great about the mix of mentors was that they worked at diverse organisations and also in different roles. We gained insights into how Lloyd’s operations work and its view on some of the market ambitions, learnt about opportunities with the aforementioned Managing Agents from the tech perspective and from the business point of view how they interact with their distribution partners.
Working alongside mentors, we were able to identify some problems that the Lloyd’s market is dealing with and KASKO’s platform could help with. We realised that there is a high volume of submissions with high cost of processing, which might not be very profitable or efficient. With a leading fine art Syndicate, we looked at the possibility of offering a digital solution for a fine arts product that would massively decrease operational costs, leverage existing channels and free up underwriters, while allowing them to stay relatively flexible.
The second problem we came across was utilising data effectively as getting it into systems can be quite complex, time consuming and costly. At KASKO, we’ve worked with a range of insurers and helped them integrate third party data, which can help shorten underwriting, among other benefits.
The third problem that we tackled as part of Lloyd’s Lab was around distribution. In comparison with some well-funded Managing Agents, distribution partners don’t usually have a fully developed IT system, which can slow things down, limit scaling options, as well as make data transfer more difficult. KASKO’s platform allows us to create an automated underwriting process, but we can also leverage existing IT infrastructure. Expanding on this, we are now deploying augmented underwriting flows which allow the underwriter to “manually” adjust quotes and coverages which then still feedback into a digitally supported flow. This is particularly relevant for more complex risks or where brokers actually do a lot of the initial underwriting but require a review and possibly adjustment from the underwriter.
It was a great opportunity for us to showcase that KASKO has solutions to several problems that insurers are facing and that our fully functional distribution and policy admin platform can make a difference.
We are huge advocates of remote working and digitalisation, so we appreciated the virtual nature of the programme as it saved us time travelling and allowed for multitasking during conference calls. At the same time, we believe that meeting the community in person would have worked better for networking, which is something that all virtual events need to and will have to deal with in the coming months.
Having said that, we do understand that insurance is fundamentally a trust, and thus relationship, game. Once the Lab was finished, we were approached by some of Lloyd’s coverholders and brokers about setting up legal entities in Germany. They were interested in the possibility to continue to access the European market after Brexit. We quickly engaged back with Ed Gaze, Lloyd’s Lab’s Senior Manager, who helped us get some additional feedback from the relevant colleagues at Lloyd’s about their requirements. While this is not our core business model, it is incidentally something we have experience with. Having a UK-based holdings company with a German regulated MGA from our early days of running a B2B2C MGA before switching to become a InsurTech as a Service Provider has given us a new opportunity to establish contacts.
Thank you to Lloyd’s Lab for the experience and to our mentors for sharing their insights and expertise!
