’I’ve got a much more relevant context of what’s going on in the insurtech market,’ says chief executive
When Innovative Risk Labs (IRL) officially got the go ahead to enter the Lloyd’s market, its chief executive Ed Gaze took it as confirmation that there is a gap in the sector between brokers and insurtechs.
The insurtech became a Lloyd’s broker last week (23 June 2023) after having conversations with various market participants about how to secure a licence back in September 2022 and realising how expensive and time consuming it was. On average it can take up to four years and cost between £750,000 and £1m.
The firm, which incubates and supports startup UK and global insurtechs in their development, is now aiming to be “first broker of its kind”.
Gaze tells Insurance Times that while there are former insurtechs that have transitioned to becoming a Lloyd’s brokers, IRL is doing something different – getting capacity for insurtechs.
The firm has already secured Lloyd’s capacity for three insurtech clients, which are set to launch this summer.
“There’s no Lloyd’s broker dedicated to insurtech,” Gaze says.
“Traditional Lloyd’s brokers were not really helping getting insurtechs launched, they were only stepping in at the last minute when things were ready to go.”
Challenges
Gaze says this is due to a lack of understanding from insurtechs about how the Lloyd’s market works.
Read: Ex-Lloyd’s Lab head Ed Gaze scoops new role at alumnus insurtech
Read: Insurtech sector commends Ed Gaze’s work at Lloyd’s Lab
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However, he adds that due to the complexity of the market, bigger brokers failed to meet the needs for early stage startups.
And while he feels early stage insurtechs want to collaborate in the Lloyd’s market, Gaze says they do not bring much money initially as they are startups.
“[Big brokers] are trying to chase deals that bring money in,” he says.
“A big broker has got a target for revenue and these [insurtech] long term [ventures] take quite a bit of time.”
For insurtechs, business ideas take a long time to get off the ground – once launched they might not be even profitable to begin with as it takes time to grow a business.
Gaze says: “[Insurtechs] are all very random – one might be a cargo pack metric product and another a maternity insurance product – they are all different.
“So, it doesn’t always fit with the same broker.”
’Relevant context’
However, Gaze explains that as brokers do not see enough insurtechs that vary in business class, they are not familiar with them.
He says this makes it trickier for them to compare ideas and therefore accurately foresee long term profitability for them.
This is not a problem for Gaze, however.
Gaze is well known and connected in the insurtech sector, given his previous work at the helm of accelerator Lloyd’s Lab as acting head of innovation for more than four years.
In 2022, the original founder of IRL James York, who is also founder of insurtech Peaccce, recruited Gaze with the aim of expanding IRL’s appointed representative network of insurtechs.
After joining IRL, Gaze was approached by many insurtechs that were keen to collaborate with Lloyd’s.
“I’ve got a much more relevant context of what’s going on in the insurtech market [and] I still meet so many insurtechs like I did in Lloyd’s Lab,” he says.
“So, I can often say ‘well actually I know someone else who is doing something like this’.
“I am in all these conversations because all this early stage insurtech stuff comes to me, so I get a bigger picture of what’s going on in the market.”
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