Why tech needs to be in every broker conversation

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It’s the backbone of all industries – and insurance brokers now have a unique opportunity to support their clients. Experts from Markel discuss the growing technology sector in the UK

FROM ARTIFICIAL INTELLIGENCE to machine learning, what were once futuristic concepts are very much the ‘here and now’ for businesses across the UK. In fact, as TV presenter and renowned journalist Sasha Qadri (pictured right) put it at a recent Markel Tech event, “Technology now comes up in every business conversation.” “I can honestly say, tech has never been as important or crucial to the way businesses are run as it is today,” she claimed. “Whether that’s getting rid of legacy technology, leveraging AI

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“Brokers shouldn’t think only about tech companies delivering software and AI but, rather, that it’s all organisations implementing some form of technology – and that presents an opportunity to ensure they are covered adequately”

Jo Sykes, Markel UK

to improve efficiencies, harnessing data to engage with customers more effectively or starting digital-first businesses – I would say that we have hit ‘peak tech’: we all know what it is to live and work in a tech world.

Sykes noted the firm had recently undertaken a survey among tech companies and brokers to discover what was keeping them up at night. Among the issues highlighted were cash flow, particularly among smaller SMEs, and cyber threats. “There were definitely concerns around ‘do they have adequate cover?’” she explained. Mark Lowther (pictured right), technology insurance sector specialist at Markel UK, highlighted that concerns over coverage were paramount among brokers too. “Some of the concerns I hear among brokers,” he said, “is over whether the coverage is appropriate. A lot of tech clients are on generalist policies – they might not have the correct levels of cover, types of cover or the right jurisdiction.

Tech coverage concerns

Published January 27, 2025

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“Some of the concerns I hear among brokers is over whether the coverage is appropriate. A lot of tech clients are on generalist policies – they might not have the correct levels of cover, types of cover or the right jurisdiction”

Mark Lowther, Markel UK

“Our mindsets need to shift, because tech is now the backbone of all industries regardless of vertical – in your day-to-day, your communications, your databases, your customer profiles, your industry comparables: they are all driven by tech.”

Now that mindset shift needs to be applied by brokers too. In a panel discussion led by Qadri, Jo Sykes (pictured left), divisional director – broker and ATE at Markel UK, noted that “brokers shouldn’t think only about tech companies delivering software and AI but, rather, that it’s all organisations implementing some form of technology – and that presents an opportunity to ensure they are covered adequately”. There is rapid growth in the space too, with a report by TechNation revealing that 84% of founders of tech organisations are “hugely optimistic” about their growth.

Focusing on the growing tech startup sector, which is rapidly expanding in the UK with 51,017 new tech companies incorporated in 2023 alone, according to RSM UK, the ease of doing business has become another key consideration. “Tech companies expand really quickly,” said Rix. “Their services can be deployed anywhere in the world through the cloud.” He noted the software development sector in India and Poland, along with the ‘gold mine’ that companies are chasing in the US – highlighting the need for policies that incorporate those subsidiaries. Markel has built its proposition to include subsidiaries across the world, and that also means considering a host of global risks – from geopolitical issues to supply chain problems, with third-party software providers being particularly susceptible.

International considerations

There is palpable excitement among insurance brokers for the growth of the tech sector and, as Lowther put it, “if you’re not in the sector – why not?” Most traditional, white-collar PI professions are relatively standard and don’t change so quickly, he noted – whereas keeping pace with tech companies is a challenging new domain for brokers and underwriters alike. “If things are staying the same, there’s not much you can do to differentiate yourself,” he noted. “But if things are constantly evolving, there’s excitement there.” Lowther noted that Markel is actively listening to brokers to further craft its tech offering, as they are often the first to know what their clients are worried about. That, in turn, allows it to build its wordings and ensure it is addressing client needs.

Reasons for broker excitement

Want to know more about the Markel Tech offering? Find out now.

jump in new technology companies incorporated in 2023 in the UK jump in tech incorporations in London in 2023 number of new tech companies, up from 41,972 in 2022 software developers, data businesses and IT consultancies

22%

26%

51,017

key sub-sectors

Rapid growth in tech startup sector

“We focus a lot on coverage,” added Rix, “and we are quite confident now that this is a market-leading offering. The key is that we go beyond the insurance contract – with Markel Law and Markel Tax we are providing extra value. “Technology companies are entitled to grants and R&D tax relief from the government if they go through a process – but it’s a stringent process that can take time. Our experts can actually help them from start to end. These benefits are unique in the market and so we’re confident in the value we’re offering.” For brokers the message is clear – the tech sector provides a massive business opportunity. But that means providing your clients with not just any policy but the right, specialist policy for their individual needs.

combined market valuation of the UK tech sector in Q1 2024 tech ecosystem in Europe UK UK AI startups backed by VCs raised by UK tech startups in 2023 $5B – energy $3.9B – fintech $3.7B – transport

$1.1T

1,800+

$21.3B

The Tech Nation Report 2024

“Cyber is also a chief concern – a few years ago it was probably PI cover, but now cyber is maybe the most important form of cover.” Sam Rix (pictured left), UK technology manager at Markel UK, also emphasised the importance of cyber coverage. “Brokers speak to us daily about it,” he said, “but we shouldn’t forget the crossover between cyber and tech PI. A cyber incident can lead to breach of contract, fines – it’s a very interconnected area.” For tech SMEs, tax and legal advice are additional considerations, with many not knowing where to go for support. Markel aims to offer a host of value-added services, including a debt recovery service to address those cash flow issues Sykes pinpointed. “We had a digital marketing agency

Source: RSM UK

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client who was really struggling with a particularly difficult client with a £35,000 debt – with our support we successfully recovered the fees of late payments owed to them. It’s value-added services like this that are critical to operational and business survival, beyond just insurance.”