NuVenture International launches insurance MGA platform
NuVenture International Ltd, the UK-based fintech that develops, and supports a diverse portfolio of MGAs, has launched a new platform that is aimed as attracting insurance underwriting talent.
The new, robust framework helps establish a diverse portfolio of MGAs and is focused on a wide range of insurance products and sectors, combining underwriting expertise with the benefits of modern technology.
The new platform is the brainchild of industry veteran Andy Colbran, who has innovated the solution through collaborations with the company’s strategic partner, Xceedance.
According to reports, NuVenture makes use of a proven and broad range of insurance-specific services to attract underwriting teams — and influence change in the MGA market. These are based on a culture of transparency with capacity providers.
Within the NuVenture enterprise, the interests of MGA founders and their financial rewards are inextricably linked to the value they create for capacity providers.
With funding provided by NuVenture, founding underwriters will have a significant equity stake in their MGAs. Founders will also have the opportunity to rethink the underwriting process, drive innovation, and reap the rewards of running their own business.
To achieve their objectives, founders and teams can leverage proprietary, MGA-customised technology from NuVenture, offering capacity providers seamless connectivity and 24/7 access to their underwriting data. NuVenture MGAs are supported by centralised professional services, allowing them and capacity providers to focus on the core ingredient for success — disciplined underwriting and building relationships with brokers.
Speaking about the platform, Andy Colbran, CEO of NuVenture said he believes the MGA model can bring great value to brokers, capacity providers and clients. He explained, “By using relevant data sources, MGAs can effectively streamline the underwriting process without compromising on quality.”
Colbran said the platform's first MGAs would be operational by the end of May and the company will build a, "pipeline of experienced underwriters business people to join NuVenture," as part of an expansion strategy.
He added, “It’s an attractive proposition for entrepreneurial underwriters, who are eager to help transform the insurance ecosystem and excited about the opportunity to benefit from the value they create.”
Insurtechs are winning the race with legacy system companies
Nestled in its own place within the world of financial services, insurance is arguably more unpopular than retail banking.
That’s hardly surprising given that, from a customer service perspective, insurance is something of an off-kilter transaction. You pay a sizable premium in exchange for a service you hope you will never have to use. This image problem is exacerbated by ubiquitous tales of insurers not paying out when it is time to make a claim.
The insurance sector has long been due to an overhaul, and this is where the disruptive force of insurtech comes in - one of fintech’s most upwardly mobile subcategories. Accordingly, last year, insurtech in the UK alone attracted £262m in investment, a growth of 60% on 2019, according to Tech Nation. Insurtech’s momentous growth has been captured in a new report by The AI Journal exploring this burgeoning sector.
What exactly is insurtech?
Put simply, insurtech refers to technological innovations that seek to make insurance cheaper to buy and more efficient to use. In a similar vein to fintech, the large, established institutions have been dipping their toes into insurtech, but it’s the disruptors who are genuinely looking to shake up the status quo, diving into and exploiting those areas that traditionalists have little imperative to explore.
Examples are price comparison sites (one of the earliest forms of insurtech that was eventually snapped up by the insurers it initially sought to disrupt), claims software, customisable policies, or even smart-tech-enabled dynamic policies whose premiums can fluctuate depending on changing circumstances.
The latter, for instance, could use someone’s fitness tracker or smartwatch to monitor fitness levels, thus reducing the premium of a life insurance policy; or track a GPS system that records the location of a car and assesses risk levels accordingly.
Most consumers tend to shop around for their insurance needs and perhaps end up buying their contents insurance with one provider, their car insurance with someone else, and their pet insurance with yet another underwriter. Managing all these different policies, with their varying renewal dates and payment terms can be complex. This has led to the increase in apps that pull everything together.
More prosaically, insurtechs are developing AI that uses machine learning to act as an insurance broker, eliminating the need for a human intermediary and therefore offering more cost-effective and impartial advice.
Insurtechs and risk
But there are some obstacles in the way of insurtech’s continued evolution.
Insurance companies are averse to risk. Understandably so, as at the crux of the industry is the role of the actuary, whose job it is to analyse and measure the probability and risk of future events. So it’s little wonder that there’s a reluctance among the traditional players to welcome the disruption that insurtech brings.
Insurance is heavily regulated, a minefield of legality and labyrinthine jurisdiction, which means the idea of shaking it up can be anathema. And why would they, when their old-school business models are working perfectly fine?
There’s an understandable nervousness and unwillingness to work with startups, who themselves need to work with the bigger firms in order to underwrite risk.
While it seems like a catch-22 situation, there is growing, if cautious, interest from insurance companies, who can see the benefits of insurance with a friendlier face, innovative solutions, and a competitive edge through differentiation. As that tentativeness dissipates, the growth of insurtech will gather even more momentum.
Tom Allen's analysis is based on the findings of a new report on the fintech and insurtech industries produced by The AI Journal.