New player’s pledge to ‘get inside brokers’ heads’

New player’s pledge to ‘get inside brokers’ heads’ | Insurance Business

New player’s pledge to ‘get inside brokers’ heads’
The timing, the technology and the industry trends are just three reasons why former Lumley CEO John Lyon believes his new company Ando Insurance will be successful in New Zealand’s challenging market once it gets the regulatory go-ahead.

Despite telling an audience at the Risk Rendezvous conference earlier this month that he thinks intermediated insurance companies are the players most likely to get squeezed out of the value chain, Lyon is confident that Ando can do things differently.

“There’s a lot of double handling that takes place at the moment in many insurance processes, not just claims,” Lyon told Insurance Business.

“We think it could be simpler and good technology and processes are an obvious starting point. A major focus is going to be on using our state of the art technology to streamline the interactions that we have.”

One big advantage of being a start-up, Lyon said, is there is no legacy system to worry about.

And thanks to the advances in technology Ando has been able to invest in a cloud-based IT system for a fraction of the cost it would have been 5-10 year ago.

The system they chose had to be all about good connectivity: “We want to connect in with suppliers, on the claims side, around banks on the payment processing, we want to connect in with brokers and distributors around how we do business, and connect in with customers where we can,” Lyon said.

“For us linking in particular with broker systems so we can do schemes and facilities for SME and personal lines business, so we want to use the best possible technology to make that interchange easy. That way it takes the administrative burden away from the broker and frees them up to do more sales or to save costs by being more efficient.”

Lyon said he is already busy engaging with brokers before the company’s hoped-for trading launch by the end of the year to pitch Ando’s ‘compelling proposition’ as a multi-lines generalist insurance business.

“We’re not going to come to the broker market with ready-made solutions, our approach is to engage with brokers on a strategic basis to understand what they are looking to achieve, and then work with them to help them deliver that,” he said.

“To successfully support those brokers we need to get inside their heads and really understand their strategy so we can actually tailor our offerings to support those, whether brokers are wanting to improve margins or grow business or whatever it is.”

Ando has been set up as a joint venture with privately owned Australian-based Hollard Insurance whose entrepreneurial and flexible business model, not to mention non-exclusivity, proved a winning formula for Ando’s principal shareholders Lyon and fellow ex-Lumley GM Dean Edwards.

A chance for Hollard to get into the New Zealand market made for an instant connection.

“The Hollard connection was the one that really excited us because they had all of the attributes we were looking for in a partner – they’re privately owned, very entrepreneurial, they’re fast paced to make decisions quickly, they’ve got a business model that supports investing in agencies like ours, and they were very keen to enter the New Zealand market but just hadn’t found the mechanism.”

Lyon said: “Being two-thirds New Zealand owned is really important so we don’t have to try and force-feed strategies down the line from Australia or wherever into New Zealand where the strategies need to be slightly different to respond to the culture, the dynamics and the market structure.”

Ando will initially look at doing case traded commercial business in property, liability, motor and marine whilst also engaging with brokers who want to innovate in the schemes and facilities area.

Lyon added: “The other thing is because we’re an agile business, depending on how those opportunities unfold, we may find that the business goes one way rather than another in response to market needs.

“If we were looking at another market segment and Hollard didn’t have the risk appetite but it ticked all the other boxes, we would be free to go and talk to somebody else.

“That way we build the relationship model we have with the distributors, brokers and partners without compromising Hollard’s risk appetite or potentially walking away from a market opportunity and a value add for partners.”
Part Two next week:
Is it just the ‘brand of John Lyon’ that has got his former employees lining up to work for him again, or is there something more making Ando so appealing?