Atrium Underwriters has been operating in the London market for almost 100 years and has established itself as one of the most forward-thinking insurers when it comes to innovation and new technology.
Underwriters Simon Lewis and Matt Greaves join Matthew on Podcast 159 to discuss where that drive for innovation comes from.
The conversation covers how Atrium assesses ideas and products for new opportunities like crypto, using technology to speed up claims and reduce costs, and how it supports start-ups through the Lloyd’s Lab and Product Innovation Facility (PIF) at Lloyds.
Talking points include:
- Aligning innovation with day-to-day underwriting
- Building an innovation culture
- Assessing viability and accepting “fast fails”
- Using natural language processing (NLP) to review claims
- Collating location data for catastrophe risk underwriting
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Continuing Professional Development – Learning Objectives
InsTech London is accredited by The Chartered Insurance Institute (CII). By listening to an InsTech London podcast, or reading the accompanying transcript, you can claim up to 0.5 CPD hours towards the CII member CPD scheme.
The Learning Objectives for this podcast are:
- Understand some of the opportunities that innovation can bring for insurers
- Recognise how insurers are supporting start-ups and the potential costs and benefits
- Compare some current forms of innovation and the impact they are having on the underwriting process
Let us know you have listened to this podcast and if your organisation is a member of InsTech London you will receive a quarterly summary of the CPD hours you have earned.
To help us measure the impact of the learning, we would be grateful if you would take a minute to complete a quick feedback survey.
Underwriting and innovation where it counts – Episode 159 highlights
Matthew: For people that aren’t familiar with Atrium, what does it do?
Simon: Atrium is a specialist (re)insurance company underwriting at Lloyd’s through Syndicate 609. It’s been around since the 1930s. We can write £625 million in business for 2021, which puts us in the mid-size category at Lloyd’s. We are on the Lloyd’s Light Touch list: offered to syndicates that have a good historic performance in Lloyd’s. This gives us the ability to follow the hardening market (i.e. write more insurance as rates increase) alongside the flexibility to innovate with new insurance products. Another unique element of Atrium that also allows independent thought is that the Syndicate is backed 75% by individual names, rather than only corporate investors.
Matthew: Matt, what is your role at Atrium?
Matt: I’ve been working on Atrium’s accident and health team as an underwriter for seven years. Over that time, my role has morphed and changed. I’ve incorporated the innovation side into my day to day underwriting role with Simon, and as part of that we’ve been meeting with third parties from outside of our normal business partners. From one of these conversations, the crypto currency opportunity with Coincover came up and we decided to run with it. We’ve been working with them for the last 18 months. We now have enquiries about offering crypto related insurance on an almost daily basis.
Matthew: Where has Atrium’s drive for innovation come from?
Simon: It’s due to the nature of the people we employ. Our innovation group, Innovate SteerCo, was put together to exchange knowledge and to act as a resource for other parts of the business. It allows the company to explore and learn from new innovative products and distribution coming to market. We use the group to collaborate with third parties like InsTech London, start-up companies and the Lloyd’s Lab. Atrium’s approach allows underwriters to think independently and act as decision makers which has been well received by the third parties we’ve engaged with.
Matthew: Can you talk about Atrium’s approach to new insurance products?
Matt: We’ve written quite a few new products over the last 18 to 24 months, but we’re also proud of our willingness to accept “fast fails”. We’ve become good at abandoning an idea quickly, without investing too much time into it. A good example is a Takaful product, aimed at the Islamic community and Shariah-compliant. After an eight-hour workshop, we decided that the product would not be commercially viable. Saying no at that stage saved a lot of resources. In terms of what makes us successful, we’re fortunate to have quick approval from senior management, like we did for our crypto product.
Matthew: What is Atrium doing with Coincover on its crypto product?
Matt: Coincover went through the Product Innovation Facility at Lloyd’s. We were introduced by Insurtech Gateway, which we were put in touch with by InsTech London. We are working with Coincover on a theft protection product, covering hot and cold wallets which hold cryptocurrency. A hot wallet is where the key to access cryptocurrency is stored online, and a cold wallet is where it’s stored offline. We are seeing an increasing interest in crypto in decentralised finance (DeFi), with people wanting to buy insurance for the code which sits behind DeFi contracts. As of yet, we haven’t come across anything else that fits our risk appetite.
Matthew: Atrium is part of the Product Innovation Facility (PIF) at Lloyd’s. Can you explain what that does?
Matt: The PIF has been around for a couple of years now. It was established so like-minded syndicates could explore innovative insurance products. The 28 syndicates in the PIF can learn about potential underwriting opportunities that are shared around the different members and each member can express interest in underwriting. We introduced Coincover as an opportunity to the PIF after we came across them. The role of the PIF is evolving and is currently led by co-chairs George Beattie from Beazley and Katie Lennon from AXA XL.
Matthew: How does Atrium work with the Lloyd’s Lab?
Matt: I’ve been a mentor in the Lab four times. Most recently I’ve been working with Gaia which is looking to create an IVF product for prospective parents. We’re working with Beazley, Chaucer and Gaia in an open minded and collaborative manner to launch the insurance product as soon as possible.
Simon: I’ve mentored several different groups in the Lab. For members of staff within Atrium, the Lab offers experience in talking to different types of organisations, so there’s an element of education for all of us. When we mentor in the Lab, we pull in different people across Atrium with expertise in various fields to help companies through the process.
Matthew: Matt, do you have any advice for companies that are taking part in the Lab?
Matt: Companies need to ask themselves if their proposition is commercially viable. A lot of the time companies approach the lab with what seems to be a great idea and one that may solve a problem, but it’s not commercially viable or scalable. There may also be systemic risk, which can be an issue with some parametric products, for example
Matthew: Simon, do you have advice for anyone from an insurer considering being a mentor in the Lab?
Simon: My advice is to go in with an open mind. A lot of the ideas that will be presented will be new. Pull in as many people as you can from inside your company, to cover all the areas that the startup potentially needs help in. If after the 10 weeks of the cohort you’ve been able to help shape their idea, you can end up with a strong relationship with that company.
Matthew: Simon, can you talk a bit about what you’re seeing in the area of claims innovation?
Simon: Claims is an area where we’ve had some great success supported by innovation. We recently worked with Tautona, which was in the Lloyd’s Lab. We helped them identify a problem with the way policies are written and how this impacts the claims process. Policies for complex insurance risks are often hundreds of pages long with multiple endorsements (changes over time). As a result, when it comes to settling a claim it takes a lot of time to understand the data, where the claim fits and what the cause of the loss is. Using Tautona’s NLP (natural language processing) and NLU (natural language understanding), we can review the claims notifications and identify the proximate cause a lot faster. We’re currently in a testing phase with Tautona through our online platform.
Another company from the Lloyd’s Lab is Field Pros Direct. They use smart matching of claims with licensed professionals to make sure there is the right fit of people handling the claim. This improves the turnaround times for the client and ultimately reduces the cost for insurers.
Matthew: I see that Atrium won the Cuthbert Heath Award in 2019. What did Atrium win it for?
Simon: We were looking at ways that we could speed up payments to our insureds after the 2018 wildfires. We work with a company called Vitesse, which makes global payments faster. We’ve got an API directly from Vitesse into our centralised claims management system and can trigger payments directly from the system. This reduces double keying and reduces the need for loss funds (funds held by a third-party administrator (TPA) or broker on behalf of the insurer to pay claims), allows for faster payments and more transparency. Atrium is now working on a wider market fast claims payment initiative with Vitesse.
Matthew: Which companies are Atrium working with that provide data that can help improve the underwriting process?
Simon: One of the biggest challenges with data is getting it all in one place. We’ve had success in this with our online portal, where we have a live database which has been running since 2004. It also means that the product is in front of clients at the point of binding (writing the insurance), so we can plug data in before the risk is bound. One of the companies that we’ve used is HazardHub. We discovered HazardHub after the 2018 wildfires and chose them because of their connectivity into the pre-bind process and the quantity of data that they possess. We’ve got HazardHub built into our AUGold platform via an API. Additionally, we partner with Verisk to pre-populate other data fields within AUGold. Traditionally we rely on our agents to enter the information themselves. With an API we can pre-populate the data, improving accuracy as well as the customer experience.
Matthew: Can you talk a bit more about Atrium’s AUGold platform?
Simon: AUGold was one of the original innovations at Atrium. It was developed in 2004, when not many other insurers were offering portals. It was set up as a quote and bind policy issuance platform that sits within our MGAs’ offices. It supports the underwriting of SME business in a fast and efficient manner. The platform mirrors the other distribution channels we use in the US, so we have the ability for retail agents to log in directly if they wish. The MGAs, whom Atrium have a contract, are doing the binding of the business, but we also have the ability for the London broker, the TPA (third-party administrator), and the Lloyd’s underwriters to all log into the platform to track what is happening as well. We write business across all 50 states in the US and in Canada, and we’ve currently got 16 insurance products on the platform. We’ve been running since 2004 and have a loyal user base on the platform.
Matthew: Simon, are digital innovations like AUGold making it easier to deal with your brokers and cover holders?
Simon: The digital landscape is changing. Portals have now been widely adopted across domestic carriers, and we’re seeing more brokers and MGAs wanting to go digital. Atrium has been working in the last year to release our “bindable API”, which we feel is going to stand us as a pioneer in that market. Building in this API means that an individual underwriter at the MGA no longer has to go into our platform and manually enter information to get the quotes and the policy pack, they can now simply log into their own broker portal to get all they need. The connectivity, flexibility and embedded nature improves the MGAs’ service to their customers as well.
Matthew: What is it about InsTech London that has led to Atrium’s becoming a corporate member?
Simon: When we started our innovation group, we looked internally for ideas and projects. In our second year we realised we needed to speak to third parties, so we teamed up with InsTech London. Your network, reports and events that you put on are all fantastic. InsTech has helped us find several different companies that we’ve been able to collaborate with.