How do you see the insurance market evolving this year? Top 3 trends?
The insurance market is global and encompasses all industries. It’s difficult to pick key macro trends because there are so many different elements across the entire sector. But I’ll try and summarise what we, at Vitesse, see.
I think the broad theme of digitisation will continue to be strong. Over the last couple of years, it has been necessary for nearly all businesses to digitise in some way. The insurance industry was no different. Digitisation within insurance occurred at varying speeds and with varying degrees of early success but the net effect of reduction in costs and overheads and improvement in customer outcomes has been very clear.
And so have the winners. Some businesses have excelled in their digitisation strategies and execution and those businesses are starting to operate more efficiently. Others have not. I expect that those others, who have been slower with their efforts, will speed up their own digitisation to remain relevant and competitive. And I see the pace of digitisation within the already faster-moving operators to continue. There’s so much to do.
I think parametric covers are very interesting. Although not necessarily new, the increase in the availability of information about events – ranging from the conditions in a specific packaging area of a single truck moving cross country to the exact level of precipitation or wind in a field somewhere (anywhere) in the world – means it’s now possible to define and rate a policy and pay a claim, all completed within a digital (real-time) flow.
This can only create a better experience for the customer. They’re also very efficient from an underwriting standpoint. I think we’ll see more of these types of covers covering all manner of risks.
The rise – again – of the Managing General Agent (MGA), with the addition of the ‘NeoInsurer’. Although the MGA has definitely been through cycles – rising due to the appeal to capital providers of instantly being able to access distribution and underwriting capability and falling out of favour historically because of poor controls, loose use of process and bad business tools – the last couple of years has seen a number of new entrants to the insurance market.
These businesses typically start working under an MGA relationship and focusing on some very specific areas of cover and doing it very well. Much better than a capacity behemoth trying to operate 100 lines of cover directly. Customers appreciate the direct experience, the underwriting knowledge, which lead to a better cover. And the underwriters appreciate the nimbleness, access to distribution and market underwriting knowledge.
Some of these operators will make it and go global, full-stack insurers. A lot will not make it. But lots will try and that is risk-reward for the carrier. But we’re looking forward to the rise again of the MGAs and DCAs as our treasury and payments tools are built specifically to make that relationship between the MGA and their carrier as risk-free, transparent and efficient as possible.
What does the year look like for payments? What will be key to success in the payments space?
I think in terms of payments, the simple answer is more of the excellent and almost invisible experiences payment customers enjoy elsewhere will be seen in insurance. Lots of businesses outside insurance have seamless payment processes, and swathes of choice for the consumer. These have been slower to arrive in insurance – both for how people pay, and perhaps more importantly the old adage about claims being an insurers shop window – how people are paid when the inevitable occurs.
Any new innovations or technology you’re looking forward to seeing in the payments/insurance space?
Insurance has always been a data-heavy business. It’s needed lots of data to help understand and calculate risks. But I’m amazed at how increasingly prevalent data is at all levels of the transaction. I think the level of information available on what is going on around us now as well as what has happened is making it possible to come up with all sorts of innovative and value-adding covers that in turn fuel the global growth that we see everywhere in the world.
What does 2022 look like for Vitesse?
2022 is going to be Vitesse’s best year yet! With a successful Series B completed and some financial firepower ready to deploy, we’re perfectly positioned to deliver on our aspirations of being the Payment Partner of Choice for the Insurance Industry.
Vitesse will be focusing on continuing to promote and deliver our services across the London Insurance Market, as well as establishing a beachhead in the US to deal with the demand we are now seeing from US carriers and associated partners.
Our exciting memberships with the MGAA and WSIA will see us establishing tighter communication with our customers and prospects, which in turn will allow us to bring more exciting, value-adding services to an industry that is finally invested in making some big changes.