Theo Duchen: ‘More work to do’ around eTrading complex insurance products

There is ”more work to do” when it comes to successfully eTrading complex insurance products, according to Theo Duchen, co-founder and co-chief executive at software house Acturis Group. 

Speaking exclusively to Insurance Times, Duchen explains that the main challenge around eTrading complex risks is that there is “no right or wrong answer” – especially as numerous underwriters with different perspectives or focuses that may need to review the risk in order to insure it in its entirety.

“Complex [risks are] not that easy to compare. [They often have] terms and conditions which need quite a lot of interpretation. You have to factor that in,” he adds.

Acturis is seeking to tackle this challenge head on, however, using an ”iterative approach”.

Duchen says: ”You start somewhere and then iterate. You get better and better through working with participants in that process.

”We have seen some real successes in [eTrading] more complex [risks], but we recognise that there’s still more to do. We have a process in place to facilitate that and are seeing volume through it.”

Getting the process right around eTrading complex risks is also impacting decline rates, Duchen notes, because some insurance products are currently more easily eTraded than others.

He continues: ”Some products have been eTraded for a long time, so the decline rates are low. Others are in a much more developmental stage, so the declines rates will be that much higher.”

Duchen adds that there is a “fundamental difference between eTrading a complex product [versus] a simple product” because the latter is “more or less binary”, with a quote easily being created and delivered in most cases.

Meanwhile, “for more complex products, [the risk] is going to have to get looked at because it’s not straightforward”, he continues.

”There are many aspects to consider, but you have to streamline that journey, make it more digital and help both the underwriter and broker through a good, structured question set, which we’ve done in an electronic way.”

Putting the work in

Duchen certainly knows his subject matter when it comes to eTrading.

In Insurance Times’ Five Star Rating Report: eTrading 2024, published in May 2024, Acturis ranked in first place – for the eighth consecutive year – out of the four software houses analysed.

This year’s report was based on feedback from more than 700 UK general insurance brokers, collected between January and March 2024.

Duchen is naturally pleased with Acturis’ ranking, thanking the ”enormous effort” of the company’s staff as well as recognising Acturis’ clients that have “embraced its eTrading [propositions]”.

He says: “We do a lot of work with brokers to get feedback and that’s why we have a pretty good rating, because [brokers] realise that we put the work in to understand the product. At the same time, we get some insurers [that] are interested in the product.”

Although the 2024 Five Star Rating Report showed that Acturis is performing well in the broker market, 47% of respondents noted that they would place more business via the software house if it had a reduced referral rate, while 43% said they would place more business with Acturis if its decline rate was lower.

Addressing this, Duchen says: “You have got to allow insurers a period of time to get comfortable with the product in order to reduce the referral rates. You can’t do that too quickly as the risk to insurers is huge. There’s a spectrum – you start here and end there.

”The brokers have to play their part as well. They have to send enough volume to that product to enable insurers to have the data to be able to refine that product. Everybody‘s got a part to play.”

More than a third (38%) of broker respondents said they would place more business with Acturis if it had access to more insurers, 36% want to choose from more product types and 37% noted that they would work with Acturis more if it improved its ability to address customer needs more effectively.

On a positive note, 47% of respondents reported that Acturis’ question sets were good.

Providing a ‘productivity tool’

Insurance Times’ Five Star Rating Report: eTrading 2024 also collected broker feedback on Acturis’ broker management system (BMS).

Of the respondents that used this tool, 73% believed it had improved efficiency, 55% thought it had streamlined or automated business processes and 52% said it had increased competitiveness.

A further 42% attributed the BMS to improving employee productivity, while 30% observed a resultant cost reduction.

Duchen says: “[Brokers] tend to use it [eTrading] as a productivity tool. It’s really not to reduce costs – it’s to redeploy resources for more value-added work.”

He adds that a BMS can also be used to support compliance – this is particularly important because the admin related to the FCA’s rules is ”brutal for brokers”.

In terms of how Acturis is looking to further develop its BMS, Duchen says the firm plans to implement an “always on” artificial intelligence (AI) assistant.

Training opportunities

Just over two-fifths (42%) of Insurance Times’ broker respondents identified that Acturis’ training and support around products and risks was good.

This is an area that Acturis has recently developed through the launch of its free e-learning platform, Acturis Academy, six months ago.

Targeted at brokers which place business via Acturis, the interactive platform provides self-learning modules that enable broker staff to learn about the software house’s functionality, test their application knowledge and watch webinar recordings.

Broker network Hedron Network is one of Acturis’ partners that have taken advantage of this learning opportunity.

Duchen says Acturis Academy has “been in pilot [mode]” since its launch, however the platform is now being rolled out more broadly to the software house’s clients and has so far “been well received”.

He continues: “The bigger brokers can put their own spin on that as they all have different compliance processes. The academy can integrate a lot of customisations for big brokers.”

For Duchen, he is simply keen for Acturis to have an impact in the UK general insurance market – which is partly why results such as those from 2024’s Five Star Rating Report: eTrading are so “gratifying”.

“It’s a good feeling because you are helping to shape an industry,” he says.