In Focus: How are broker schemes innovating to accommodate new risks?

WE ASKED: ”How are broker schemes innovating to accommodate new risks?”

Jonathan Forster, SME distribution director, Travelers Europe

“The schemes market is dynamic and has a history of developing propositions based around client needs in a particular industry, segment or product.

”Schemes are often developed to cover a new sector or client risk that isn’t easily insured elsewhere, so scheme product design, particularly around segments, is ever-evolving.

“In the past, we’ve provided bespoke solutions for ports and terminals, inland waterways and miniature railways – all of which have emerged as new risks.

”We have also seen product specialists in financial and speciality lines. There is a scheme or facility cover in just about every niche.

“In recent years, we have seen solutions to cover the short-term rental Airbnb market, e-gaming, e-scooters and flexible covers for micro startups. As new sectors emerge, solutions have been developed.

“Technology is driving the demand for new solutions in consumer schemes, with pay-as-you-go models in motor and professional indemnity insurance challenging more traditional models.

“In addition, the use of third-party data is enriching our understanding of segments that will further drive more specialism. Modular product design will also allow greater flexibility to provide solutions for client segments.”

Tony Fletcher, corporate director, Ecclesiastical Insurance

“The pandemic forced many into working from home which, in turn, has led to a shift in people’s lives and their priorities. For example, some people have abandoned city life in favour of moving to the countryside and setting up a small holding so they can have the best of both worlds.

”Others have left the office for good and are now delivering their services from home – bringing with it additional challenges, such as public liability insurance or increased cover for equipment or stock kept at home.

”We’ve also seen more people getting pets, which presents the dog walkers we cover with a potential growth in business when people return to the office.

“The pandemic has also meant that brokers have had to be more innovative in how they engage with customers, making use of social media, in particular, but also replacing face-to-face meetings with video calls.

”In doing so, this has given them the chance to develop a greater understanding of customers and their needs – both now and into the future – as well as getting to grips with any new risks that may arise.

”We’ve been hosting innovation workshops, sharing our expertise and insight with brokers to help them to maximise the potential new risks facing customers.

“At Ecclesiastical, we’ve always had a broad appetite for schemes and as people’s lives change and needs shift, it presents new opportunities. It is therefore more important than ever for brokers to understand their markets, especially for specialists, so innovation will be key to success.”

Peter Goodman, chief executive, Aventus

“The traditional siloes around products are increasingly being broken down thanks to the intelligent use of technology and data, so you are likely to see the established schemes market trends in general insurance expanding into other markets, like health and wellbeing.

“This will open up the doors to the bundling of products and services as schemes, which would have been unheard of five to 10 years ago. The key will be how you use data and trend information smartly and insightfully.

“Increasingly, brokers are looking to differentiate themselves in a rapidly evolving market. Specialism in a growing, targeted, well-thought through niche is certainly one of the ways to do that. The range of schemes available in the market already spans both mono-line and multi section products.

”The thresholds for what can be written on a scheme are governed more by the skill set of the broker and their ability to balance thinking like an entrepreneurial broker, but act with the discipline of an insurer.

”Certainly, from what we’re seeing, schemes have been evolving from the ‘S’ into the ‘M’ of SME.”

Gary Head, commercial director of schemes and delegated authorities, AXA 

”The reason why broker schemes and delegated authorities (DA) are parts of the market that continue to grow strongly, is that these businesses are great innovators. They are able to get very close to their customers and reflect back the cover they need for both tailored and emerging risks for that particular industry or affinity sector.

”The requirement for legal administration continues to be a rising risk for businesses in the SME sector. To support with this, AXA provides a legal offering through our expert partners as part of our management liability product.

”The service gives businesses a virtual human resources and legal department - our schemes and DA brokers have done an amazing job to tailor this to the very specific needs of each sub-segment.

”It’s both fascinating and great fun to look at our range of unique customers - from ice cream vans to animal psychologists and life coaches - and work with our schemes and DA broker partners to fully understand what cover that particular customer needs and what emerging risks are at the top of their minds.

”With that information, we hope to find them the most innovative solution to deal with their specific requirements.”

Rod Breeze, divisional managing director, Towergate 

”Recent learning over the last few years is around the need to ensure that insurer schemes are constantly adapting to meet increasingly niche activities.

“Part of Towergate Insurance Brokers’s approach was to create a focused lifestyle division, consisting of three specific segments around niche, property and motor risks to address those nuanced customer requirements, such as cover for beach huts, horse boxes, yachts, military kit and unoccupied properties where standard home, motor or property covers won’t do the job.

”Schemes provide a sense of confidence about being able to fit within insurer appetite and provide good customer outcomes.

“Ensuring we manage and distribute products in specialist business units helps us to build employee expertise and also allows us to partner with like-minded scheme insurers that can adapt offerings to meet our clients’ needs as part of a long-term growth strategy, as well as meeting combined operating ratio targets.”