What differentiates a successful schemes proposition?

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The UK schemes market is growing and diversifying all the time as entrepreneurially spirited brokers, MGAs, and insurtechs look for new ways to do business in a rapidly evolving economic landscape

STANDING AT between £5bn and £6bn in GWP, the schemes market represents a significant part of the commercial lines marketplace in the UK – and it’s growing all the time. “We’ve seen a surge post-pandemic, as the pandemic has changed behaviours,” says Simon Medhurst, schemes development manager for Travelers Europe. “And it has also allowed more time for reflection from brokers and MGAs, and indeed insurers. If you look at consumer behaviours as well, you can see that they’ve changed with regard to internet shopping, increased pet ownership and homeworking, etc.”

Top traits of a successful schemes partnership

“The right people know their stuff; they know their industry and they know their customers. And they’re offering something that is additive to Travelers – they’re not replicating what we do already”

Jonathan Forster, Travelers Europe

Opportunities and challenges – the makeup of the schemes market All of these changes have created new and different opportunities, he says, opportunities that are coming to the fore at the same time as brokers are reflecting on their volume businesses and looking to where there’s any shared affinity. Meanwhile, MGAs and insurtechs are seizing on the opportunities presented by new initiatives, which, in turn, are generating more market activity. From his vantage point as SME distribution director for Travelers Europe, Jonathan Forster is seeing first-hand how brokers, MGAs, and insurtechs alike are creating new schemes-type products and solutions to meet the changing demands of the insurance marketplace. With the opportunity for innovation and differentiation thick in the air, it’s little wonder that insurance intermediaries are exploring their options – and top of their agenda is establishing the appetite of those market-leading insurers with the financial strength and track record to help them succeed. Digging into Travelers’ appetite, Forster highlights that the insurer’s focus is on partnering with the right people.

“The right people know their stuff; they know their industry and they know their customers,” he says. “And they’re offering something that is additive to Travelers – they’re not replicating what we do already. So it could be in a sector that Travelers is not in. For instance, we’ve got one scheme covering model railways, steam engines, and vintage tractors.… And we’re going into one now in a specialist area of professional indemnity that is new for Travelers. “But there are certain areas that we definitely won’t do; personal lines is one. We don’t tend to do motor delegated authorities and we don’t do areas like standalone casualty or things like food and drink, or waste. Those are some quite specialised high-risk areas we wouldn’t go into, but everything else is really up for consideration.”

The critical factors behind a strong schemes offering Between them, Forster and Medhurst have decades of schemes experience, which has enabled them to understand the factors that set a strong schemes proposition up for success. Medhurst notes that a pressing factor, which is only becoming more critical to every stakeholder in the schemes ecosystem, is the evolving role of data capture and use. A great schemes proposition knows how to use that data to keep the scheme alive, up-to-date, and responsive to the needs of the market, he says. That data piece is critical because it encapsulates the partnership approach required for a scheme to succeed, and the importance of all parties working together transparently to use free-flowing data from both sides of the fence to keep the schemes' offering topical. “Then there are factors in terms of your partner’s underwriting capability,” he says. “Are they experts in their particular field? How long have they been doing it? Have they got the specialist wordings catering for that particular trade type or affinity group?

“In terms of what we’re looking for in a standout scheme, it is that expertise, that experience in the marketplace. Ideally but not essentially, it would have a proven track record, and it would have a clear proposition and also delivery mechanisms and distribution. Because we’re looking for a proposition that complements, not conflicts with, what we’re doing in the distribution world.” Forster strongly agrees that effective data management and sharing and the capability of a proposed scheme’s teams are critical to the long-term success of a venture. When Travelers recruits underwriters, they go through a strict vetting process, he says, and so the business adopts a similar approach to schemes opportunities, as the scheme will effectively be underwriting on behalf of the brand. Looking at what sets Travelers’ schemes proposition apart, he emphasises the expertise and experience of its team and their very thorough underwriting approach. Travelers’ takes a very considered approach to its relationships, he says, which can result in longer lead-in times for new schemes opportunities but creates powerful partnerships built for the long haul.

“We’ve seen a surge post-pandemic, as the pandemic has changed behaviours. And it has also allowed more time for reflection from brokers and MGAs, and indeed insurers”

Simon Medhurst, Travelers Europe

“We’re very thorough and upfront,” Forster says. “We like to challenge the schemeholders in terms of the wordings, the data, and the capability, and seek to add value in that way. We’ve got three recent examples where we’ve looked at the wordings and they’ve really appreciated what we've identified – not just in terms of the clarity of the wording but also the meaning and intent of the cover. And post-COVID, it’s apparent that this is one of our core strengths.” Having relatively recently moved into Travelers from a senior broking role, Medhurst highlights Travelers’ external reputation in the schemes market, as bolstered by its financial strength, its expertise, and its capabilities. Schemes is a people’s business, he says, and at its heart Travelers’

proposition is all about establishing sustainable relationships. Coming in from the other side of the fence, that was immediately clear, as was the significant benefit of Travelers’ impressive technical capabilities. “I can get access to specialist people very quickly,” Medhurst notes. “When I joined, I was aware of our ‘4D’ process – discovery, design, delivery, and development – and very soon I realised that within those first two steps, which are around engaging with an opportunity, I could get access to really quality people within Travelers and get them out in front to talk about a particular scheme. And, to me, having access to that expertise and specialism is what really sets ours apart as a great scheme offering.”

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Asia

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People

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RSS

Asia

specialty

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In a dynamic world, your clients need insurance protection they can trust. That’s why Travelers tailors insurance and risk management guidance to each organisation we insure. We cover a wide range of specialist business classes and can help protect a company as it evolves – so your clients can focus on driving their business forward. We have been insuring your clients’ ambitions for generations: Travelers wrote the first auto insurance, aircraft liability insurance, and personal accident cover for astronauts. We are backed by more than 160 years of experience and financial strength, and we continue to be among the world’s leading commercial property casualty insurers.

Ongoing monitoring and evolving of the scheme

Strength/size of premium pool

Tailored wording

Data analytics

Transparency and open communication

Shared vision

Top traits of a successful schemes partnership