Liz Bilney: Brokers ‘begging’ for capacity encourages ex-Somerset Bridge Group boss to create new insurtech

Liz Bilney, former chief executive of Somerset Bridge Group, plans to improve capacity for brokers by looking under the bonnet of non-standard motor insurance and creating what her team hopes will be a “radically different” business.

Bilney’s brainchild is new UK insurtech Lumun, which she plans to launch between Q4 2023 and Q1 2024 - once the business has been approved by the Prudential Regulation Authority (PRA) and, in turn, achieved its trading licence.

One reason Bilney opted to launch Lumun stems from lessons she learned at intermediary organisation Somerset Bridge Group, where she worked as chief executive for around nine years between 2012 and 2021.

During her tenure at the firm, she found that non-standard motor products were the broker’s “better performing part of the book” due to lower loss ratios. However, a lack of insurer appetite around these products led to brokers “begging on every door” for capacity.

“Large insurers are typically conflicted as they have their own direct arm or partnerships, thus struggle with providing independent brokers with any meaningful amounts of capacity,” Bilney tells Insurance Times.

Non-standard motor insurance products, according to Bilney, include policies for people that are “not your typical driver” – including motorists with more than one car, drivers wanting short-term insurance, or cover for those that would initially find it hard to source a policy on an aggregator site due to points on their driving licence.

MGAs have also become “a bit old hat” and “still need to find capacity themselves”, Bilney adds. This, combined with the lack of cooperation from insurers around certain types of products, does not “solve the capacity issue for brokers”, which hinders those that have “books of business in profitable underwriting spaces [that] could grow”, she said.

The second issue that Bilney wants to address with her new venture is her belief that “many insurers are using policies that are not fit for purpose and contain policy wordings that [are] not reflective of the new Consumer Duty regulation”.

The FCA’s Consumer Duty principle, which aims to improve financial service customers’ outcomes, is due to be effective from July 2023.

Introducing Lumun

Bilney wants Lumun to be the answer to these insurance issues she has identified - to achieve this, she plans to use the Japanese business philosophy Kaizen, which she is “really passionate” about.

Financial media website Investopedia states that Kaizen means “change for the better or continuous improvement”.

“The Japanese are amazing at this sort of thing – they will look at a process and they’ll say [that] if you’ve got a little problem, there’s no point just correcting that small problem. You’ve got to go right back to the beginning and make sure there are no ripples. Otherwise, another ripple will pop up”, she explains.

When setting up Lumun, Bilney therefore started with a “blank sheet of paper”.

She aspires to launch a business that is “nimble on price” with “clear and transparent structures” that are based on “traditional brokering” – she hopes this will be a differentiator compared to larger insurers.

Lumun will “have no legacy approaches to pricing and will be able to focus on developing real-time pricing models rather than just relying on historic data”, says Bilney.

This model will avoid the issue of losing consent to use data that has become “old”, which larger insurers with legacy sytems often face, she adds. 

At Lumun, all underwriting will be done in-house and during the business’ initial launch phase, it will work with broker partners such as Right Choice Insurance Brokers.

Once the company is established, Lumun plans to set up its own direct distribution arm too - Bilney estimates that this will be within the first two quarters following the business’ launch.

The insurtech, which has a 10-year plan that Bilney began working on last year, has so far secured a mix of funding partners to raise between £20m and £50m.

Bilney is initially looking to have a diverse team of 20 employed at Lumun.

So far, she has a variety of industry leaders on board – including former Southern Rock Insurance director Andy Wigmore, ex-Axa Insurance managing director of technical and underwriting services David Williams and telematics company SmartDriverClub founder Penny Searles, for example.

Also speaking exclusively to Insurance Times, Wigmore notes that “in parallel” with working to gain its trading licence, Lumun’s team is getting brokers “up to speed” and exploring which systems and pricing structures work best.

To “price differently and accurately”, Lumun plans to tap into telematics, use vehicle manufacturer’s behavioural data and ensure its “systems talk to” other insurtechs’ systems too, he adds.

Bilney adds that she wants to make sure Lumun’s products are “fit for purpose” by also offering add-ons, such as employers’ liability insurance for courier drivers.

‘Continuous improvement’

Bilney and Wigmore are keen for Lumun to embody the FCA’s Consumer Duty rules.

This is because the “over-engineered compliancy” and “over-engineered scrutiny” which stemmed from “Brexit and other political reasons” - such as previously being part of a business led by GoSkippy founder and Brexit campaign group Leave.EU co-founder Arron Banks - meant “we had to be robust in pretty much everything we did and that was a very interesting learning curve”, explains Wigmore.

The duo plan to apply this “learning curve” for Lumun’s benefit.

GoSkippy was the trading name of Eldon Insurance Services, which Bilney and Banks set up in 2007. Eldon Insurance Services then rebranded to Somerset Bridge Insurance Services in December 2019, which is part of Somerset Bridge Group.

Southern Rock Insurance, where Wigmore worked, was the principal underwriter for Eldon Insurance Services in Gibraltar. Wigmore also worked closely with Banks during Brexit. 

Considering organisational culture, Bilney hopes to build an environment at Lumun that is based on “positive learning” and will look to provide mentoring for staff.

Bilney says: “I never expected to get into insurance [or] run a business, but I really like it. I’m naturally all about continuous improvement and sharpening up processes – making them more succinct.

“When you reset a process, it flows right through to your profitability.”