In the digital insurance age where insurers and brokers are embracing real-time data exchange, automation, data augmentation and enhanced analytics — both technology and your technology provider can be mission-critical differentiators.
Any start-up carrier, MGA or broker must launch with a core system that gives them the efficiency and agility to compete in a rapidly digitising marketplace. Start-ups need their underlying technology to enable them to bring products to market quickly while reducing the technical and administrative burden and responsibility — allowing them to focus on what matters most at this critical time in their life cycle: growing their business.
Today’s systems are generally quicker to implement, cost effective and simpler to use. However, they need to optimise the use of data, automate repetitive tasks where possible, streamline workflows, readily interface with market systems and APIs and free up valuable human resources. It is the silent engine that underpins everything a business does as it grows and evolves, giving the start-up the agility to respond to new market opportunities while meeting its day-to-day obligation to deliver on its promise to customers and satisfy its accounting, reporting and governance requirements. This ensures consistent data flows seamlessly through the business — from placement and underwriting to reinsurance, policy administration and claims management — reducing errors and rekeying while driving efficiency at every stage of the insurance process.
A start-up’s systems must easily integrate with external market systems, such as Delegated Data Manager or Coverholder Workbench in London, as well as the numerous third-party APIs, portals, and plug-ins in the ever-expanding digital insurance ecosystem. This not only minimises friction with counterparties, but also lays the foundations for future growth and innovation as the company’s needs and capabilities evolve.
Sequel, which has implemented a number of the more recent start-ups in the London Market and has over one hundred broking, MGA, and insurance clients, helps start-ups achieve this with an out-of-the-box solution which offers policy administration, ledger, financials, claims processing, outward reinsurance calculations, document generation and management, reporting and bureau processing functionality. This can be built upon to incorporate any of Sequel’s end-to-end suite of data-driven management solutions.
As a Verisk company, Sequel also brings world-leading data and modelling tools into its entire suite of products and delivers this intelligence via intuitive user dashboards. Going forward, data and analytics capabilities will be an increasing source of competitive advantage, with third-party models, tools and datasets enhancing decision-making at every step. Its systems are also primed to take advantage of a new era of data standardisation, with SURTS — a new data and API standard developed by Sequel, ACORD and six leading managing agents — set to be rolled out in London later this year.
Bringing The Vision to Reality
There are many considerations for a start-up entity when designing and implementing their system. Money is often tight, but the ability to provide responsive solutions underpinned by fast, efficient technology can make or break a start-up business, so getting it right is worth the investment. Some of the first decisions include whether to build and manage the system in-house, whether to outsource the development and/or management of the system to a third-party technology vendor and whether to host the system on-premise or in the cloud.
Most start-ups outsource the build of their systems to an expert vendor. The vendor must offer a dedicated implementation team and demonstrate deep experience, insurance market knowledge, a high client retention rate and have a proven track record of implementing systems at both large and small scale to ensure the start-up can bring all its lines of business to market effectively, securely, on budget and on schedule.
A good vendor needs a repeatable implementation process that can help the start-up get off the ground quickly and at low cost — but must also be adaptable enough to optimise the structure of the system and allocation of resources to each client’s intended operating models. The vendor must also understand the market and the complexities of implementing the system within the wider activities of the client (for example, managing multiple streams of activity within multiple environments) and have a clear strategy for managing transition risk and protecting the start-up’s assets and data.
Implementation should include an agreed timeline which shows the start-up what they need at what time in the process and how to deliver it. The start-up and vendor should also agree tangible success criteria and put in place a bespoke test strategy to ensure delivery meets expectations. A good vendor will also offer a period of post-launch service to ensure a smooth transition from project delivery to business-as-usual.
Just like the system itself, the service model should also be tailorable to the business needs of the client. Sequel can help start-ups with digital and distribution strategy, reporting and compliance support, enterprise rating, claims management, reinsurance calculations, exposure management, data analytics, warehouse solutions and bespoke system integrations — to name a few. Indeed, a good vendor should be seen as a long-term strategic partner helping the business thrive and evolve.
Many insurers also opt for a managed service which ensures the vendor is there to support their evolving technology needs as their business grows. Under a managed service agreement, the client should receive a dedicated account manager. Crucially, responsibility for ongoing maintenance, security and upgrades is outsourced completely to the vendor, freeing up resources internally to focus on growing the business while also ensuring the system is continually updated from a security and performance perspective.
Most start-ups have a digital mindset and prefer to host their systems in the cloud rather than on-site servers, and a growing number of incumbent insurers are also transitioning their systems into the cloud to reduce the burden of maintaining infrastructure and keeping systems updated in a fast-moving threat environment.
Sequel’s managed service is hosted in AWS, which is extremely secure, offering data encryption and security audit trails and reporting. As well as allowing fast set-up and deployment of new systems at low cost, AWS provides an optimal environment for system performance, offering sophisticated automated monitoring, ongoing upgrades, integrations, data warehousing replication and 24/7/365 platform and patching support.
AWS’s vast data storage capacity opens up the world of big data, automation, predictive analytics, and machine learning – laying the platform for future growth and innovation. And that is ultimately what the right system is all about.
Launching a successful insurance business is challenging but one of the biggest advantages a start-up has is the ability to design a system from scratch. If done well, with the support of the right vendor partner, this allows the start-up to take advantage of all the tools and capabilities available to futureproof their business, maximise efficiency, and with it their chances of long-term success.
Author: Jonathan Warriss-Simmons, Head of Business Engagement, Sequel
Published: Insider Engage 19 October 2021