How broker-driven innovation helps AXIS move into new specialty lines

How broker-driven innovation helps AXIS move into new specialty lines | Insurance Business

How broker-driven innovation helps AXIS move into new specialty lines

A highlight reel of milestones from 2018 for Brad Randell would likely include his promotion to head of insurance and chief agent in Canada for AXIS Insurance, a business segment of AXIS Capital Holdings. After a decade at AXIS, which gave the leader a baseline familiarity with the operation, Randell in his new role now has a broader awareness of the company’s portfolio and a deeper understanding of the strategic broker relationships that AXIS in Canada enjoys, allowing him to take the next steps in building relationships with distribution partners and priming the business for success in the coming year.

“From our perspective, 10 years here in Canada, it’s very much business as usual, in terms of portfolio performance and appetite. We’re well-established now, we’ve got some great momentum in the business, and we’ve got a very strong team of underwriting specialists,” said Randell. “Combined with the AXIS global capabilities that we can bring to bear in the Canadian market, we’re in great shape in terms of actually sticking to our business plan and anticipating what the future opportunities are for Canada.”

On his list of priorities for 2019 is putting new energy into product expansion and innovation by reaching into new coverage areas where AXIS sees opportunities, such as accident and health, small business and legal expense insurance, which has a lot of room for growth because of its low-limit potential, according to Randell.

“The strategy has been a long time in discussion, and we’ve aligned ourselves with distributors in the legal expense insurance space that have some beat experience,” he commented about AXIS’s approach. “We’re very much walking before we run in that segment – we started with personal injury and so far, it’s been working quite well. The whole concept of an emerging niche market aligns well with our underwriting priorities.”

Feedback from brokers and media coverage have meanwhile revealed other paths to growth, including one line of business that insurance professionals and their clients can’t seem to hide from.

“We’re seeing a real take-up on cyber and areas of coverage that are developed as a result of data breach exposure. Social engineering fraud, that impersonation fraud exposure, is another item that I think we’ve been talking about for a while, and now we’re seeing commercial insureds actively seek the coverage and bind on that basis,” said Randell, adding that management liability for private enterprise is also on the rise. “Traditionally, publicly-traded companies were buying management liability products for their D&O, EPL, fiduciary, etcetera, and now increasingly, you’re seeing private enterprises of all sizes see some strong value in having that liability protection.”

Watching the regulatory environment is another good indicator of segments that could flourish in the future.

Read more: Companies have to get ahead of mandatory breach regulation before it “bites them”

“Regulatory coverage requirements, whether they’re actual or they’re anticipated, can affect some of the professional liability lines – things such as the FI advisors, or home inspectors’ liability for example, where it was more of an optional coverage, and now it’s mandatory, or where the provinces have mandated certain coverage specificities that we need to provide to those spaces,” explained Randell.

New and evolving exposures, whether it’s malicious cyberattacks, the Internet of Things, catastrophes stemming from climate change, or legislative updates, can nonetheless present hurdles to the insurance industry and insureds because past losses are often not indicative of future losses.

“If you’re a risk manager or a business leader at a commercial insured, it certainly is a challenge to understand what the liabilities are today that you may have incurred, but you’re not going to necessarily realize in some cases for years to come. We’re seeing older industries having to adapt to new technologies that are very transformative to their space,” said Randell, highlighting the automotive space as one example. “These are emerging risks on their balance sheets, and they need to understand what’s the economic exposure of financial loss and how does that chart against insured loss. Preparedness and resiliency are two common words we hear quite a lot, and understanding the role that insurance has in terms of managing those emerging risks [has resulted in] lots of dialogue.”

In this ever-changing environment, brokers are taking a front seat in finding new solutions for their clients. The AXIS team has seen many brokers approach them with ideas based on the insurance needs of their clients, and will often work with them on developing unique products that they can deploy in their portfolios.

“We’re very much broker-driven and we look for broker-driven innovation on our risk placement process,” said Randell. “When you look at distribution, we need to understand where it is we bring value and I think that’s what the collaborations are teaching us.”

Yet, as AXIS in Canada considers new directions, the company still has to ensure that it’s holding on to market leadership in business segments where it’s already proven its worth.

“We underwrite some key niche segments, such as financial advisors, cyber, media, design professionals, liability,” explained Randell. “These are core parts of our portfolio where we’ve got a great franchise built here in Canada, and this is about taking the next steps with those books.”