July 3, 2018
To illustrate the trend of insurtechs partnering with industry incumbents, market experts and traditional players to enable transformation rather than attempt disruption, the MGA startup landscape offers a valuable glimpse.
In MGAs: the new breed of insurtech firms, Peter Staddon, managing director of the Managing General Agents’ Association (MGAA) says that “MGAs are carefully watching insurtech firms, which take an innovative approach to the insurance market, challenging the conventional insurance model and potentially revolutionising the insurance business.”
In late May, insurtech MGA startup Mercia Underwriting announced its partnership with insurer ARAG to offer commercial and landlord legal expenses products to their customers. Mark Hands, managing director of Mercia, said that the partnership would allow them to flexibly tailor their policies for clients in a market he described as “one-size-fits-all.”
Another example comes from Corvus Insurance, an insurtech MGA backed by Hudson Insurance Group. According to an article from Insurance Journal, Corvus is rolling out “smart” cyber coverage, which will include the conventional features of a cyber policy as well as others “designed to help brokers and policyholders predict and prevent cyber insurance claims.” The main feature of this is the Corvus score, which uses big data and analytics to assess organizations’ cybersecurity preparedness; companies with the best scores will be offered lower premiums and broader coverage.
Last but not least, a new insurtech MGA startup in Atlanta, CyberDot, aims to “solve the cyber insurance problem for small businesses.” Its founder, Serg Panfilov, decided to take matters into his own hands after experiencing difficulties purchasing cyber insurance. His new online direct-sales cyber insurance MGA allows potential policyholders to file an application online and then choose from several different options, similar to how consumers can quickly purchase items from Amazon. CyberDot is emblematic of the transformation and partnership trends seen today: it brings together both its founder’s knowledge of cybersecurity and the market, and the risk assessment expertise of the carriers it partners with, in order to both educate its policyholders about cyber risk and to continually refine its application process to ensure it is taking on good risk.
Coverager looks at funding since 2014. Through May 2018, there has been $18B in funding over 1,235 insurance related deals with 1 in 5 companies being backed by at least one re/insurer.
PwC Financial Services takes a look at how industry leaders are taking a hard look at how to differentiate themselves and allocate resources accordingly to align with digital transformation.