Is this the ideal modern-day insurance model?

Technology has altered the meaning of the word 'local'

Is this the ideal modern-day insurance model?


By Bethan Moorcraft

In the heart of London’s historic insurance district and nestled in the shade of the iconic Lloyd’s building lies the office of CFC Underwriting – a bright and busy space home to more than 200 staff selling commercial insurance products to thousands of businesses in over 75 countries.

Backed by Lloyd’s, CFC has grown into one of the largest independent MGAs in the world, with a focus on emerging risks like cyber, transaction liabilities and intellectual property insurance.

Cyber insurance is CFC’s hottest market worldwide, and it’s a product line that keeps on growing and growing, especially in North America. The firm writes about 15% of all cyber insurance business in Lloyd’s and has the largest cyber underwriting team in the London market. CFC’s cyber business grew at over 60% last year, outpacing growth in most international markets.

Approximately 50% of CFC’s gross written premium (GWP) is placed in the US, at just over $300 million, and a further 20% of its premium is written in Canada. So, just over 70% of CFC’s business takes place in North America, and yet the firm only has one office in the centre of Leadenhall, London.

“In this day and age, I think it’s possible to have a local presence without having an office in every location where we do business,” said Graeme Newman, CFC’s chief innovation officer. “We have the technology at our fingertips to be able to communicate quickly with someone in any country and at zero cost. A lot of our brokers feel like we’re a local market because we travel a lot and conduct frequent in-person meetings. They have access to us almost 24/7, which shows we can do a lot from this one office.

“It’s the perfect model. If we can continue to scale this business at the rate it’s growing from one office, then that’s what we’ll do all day long, because it’s the most efficient way to do it.”

CFC was founded in 1999 during the dot-com boom, with the original idea of selling cyber insurance online. But the firm was almost too visionary for its own good, as nobody bought cyber insurance or commercial insurance online in 1999, so they redefined the company as a traditional MGA with a focus on cyber and technology professional liability.

Fast-forward almost 20 years and future-savvy CFC has embraced the technological capabilities first envisioned at its genesis, and is using that to connect Lloyd’s capacity to consumers around the world in the most efficient way possible. Newman describes the business as “the accessible face of Lloyd’s.”

“We’re 100% broker intermediated. We’re trying to challenge old-school insurance thinking and use technology to help our brokers become as efficient as possible,” Newman told Insurance Business. “When we’re trading in lots of overseas markets, we’ve got to turn business around fast, which means our service has to be the best. I truly believe that even here from London, we can get a quote to someone in New York or San Francisco faster than anyone else can, and that’s because we obsess about our service standards.”

Of course, international insurance markets have different qualities, which some might argue requires insurers to have people constantly on the ground. For example, buying cultures between the US, Canada and the UK are completely different, and CFC has to navigate this from one central location. The Canadian market has been relatively slow to adopt online trading and the US market is riddled with complex state-by-state regulations and heavy commission-based agency sales models. The UK, on the other hand, has been a frontrunner in online insurance trading for some years.

Newman commented: “I think we’re well positioned on a global basis to start bringing some of the online trading capabilities so favoured in the UK to other overseas markets as they start to make the change.”



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