Specialty re/insurer Chaucer Group has introduced a new international direct and facultative (D&F) property smart consortium, utilizing InsurX’s exchange technology to provide algorithmic capacity in the London market.
Chaucer introduced the initiative as a shift toward increased algorithmic trading and streamlined risk syndication practices.
The collaboration between Chaucer and InsurX enables London market brokers to rapidly access automated capacity, allowing them to follow Chaucer’s quotes for international clients. The consortium is designed to handle various quote structures, including primary, excess, lead, or follow placements.
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InsurX says that brokers utilizing the smart consortium can expect accelerated response times, with 61% of quotes issued within 15 minutes, 84% within an hour, and 99.7% within two hours.
These response times are also combined with faster processing capabilities of platforms such as PPL and Whitespace.
“The future of our insurance industry is undergoing a transformation. Ever increasing demands on speed of service, and growing facilitised capacity, are reshaping what’s required to be a true leader,” said Mel Smart (pictured above), Chaucer’s head of international property.
Algorithmic trading, particularly in the form of algorithmic underwriting, is increasingly influencing operations within Lloyd's and other insurance markets.
The adoption of algorithmic underwriting has accelerated in recent years. A notable development is the launch of Ki Insurance in 2020, the first fully digital and algorithmically driven syndicate at Lloyd's.
Ki utilizes a proprietary algorithm to evaluate risks and provide instant capacity to brokers, marking a significant shift towards digitalization in the market.
Additionally, the Lloyd's Market Association (LMA) has identified four models of enhanced underwriting: augmented underwriting, pure algorithmic underwriting, digital and algorithmic broker facilities, and active portfolio trackers. These models represent the diverse approaches being explored to integrate technology into underwriting processes.
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