From the outside looking in, the idea of launching a start-up can seem exhilarating, all beanbags and flip-flops and creative thinking, noted Philippe Gouraud, CEO of the newly created MGA, Rising Edge. And, while he wouldn’t deny there is a strong element, at least of the latter, in starting a new enterprise, he said, behind the scenes, it is really is very hard work, made only more complex by the disruption COVID-19 has caused for the marketplace and working practices.
Read more: MGA Rising Edge enters the market
Exploring how Rising Edge, a London-based directors’ and officers’ (D&O) firm came into being, he highlighted that the business was blessed not to struggle to find the capacity needed to continue operating, as other MGAs have recently. From the beginning, he said, the business set its sights on Vantage (Risk Ltd), which now provides the MGA with reinsurance capacity and it soon enjoyed many fruitful discussions with a wide range of market entities.
“It’s really exciting,” Gouraud said. “We have had such amazing support from the brokers. And, of course, the state of the D&O market helps but we’re not taking this for granted. Our aspiration is really to provide that best-in-class service to our brokers, and insights to our clients - we’re not just here to provide some capacity and benefit from the positive market space.
“The support has been tremendous and by the end of our first day of trading, we had already officially recorded a number of transactions and quotes that we started to bind the following day… We’re very proud of what we’ve achieved in such a short period of time, and I think one of the reasons for that is we have competencies in the team that are very complementary.”
Rising Edge may only have officially launched a month ago, but already it has amassed a dedicated leadership team made up of industry professionals and Gouraud noted that this has been a deliberate element of its strategy. One of the key lessons he has learnt from past experiences, he said, is that you cannot start too small. A kitchen-table start-up simply doesn’t work in the insurance sector, because you’re dealing with regulated businesses, forming contracts and making promises.
“There’s no room to be an amateur,” he said, “and that’s why I was really keen from the beginning to have a highly recognised competence [within] the underwriting team. And that team needs to be supported by the right infrastructure. So at the same time as lining up the underwriting team, we made sure we also had a very strong chief operating officer on onboard and, equally, we didn’t want to start without having a claim function.”
There’s an entire infrastructure that needs to be in place when starting an insurance business, he said, and that includes having the appropriate documentation, a firm grasp on all the financial aspects of running such a business, and the right claims infrastructure. The solid foundation that Rising Edge developed before it launched is what will allow it to bring something new to the D&O space.
That something new is seeing the opportunity that lies behind common complaints in the market, Gouraud said, from there being too many systems, too many forms, too much complication and everything being too slow. These complaints have been around for a long time and it’s too easy to become submerged by them rather than taking the opportunity to do things differently and to reflect on whether processes have to be undertaken in a certain way or if it’s just a case of, “we’ve always done things this way.”
Rising Edge is looking to give time back to every branch of the insurance ecosystem, he said, and thus its systems run on the premise of not wasting anybody’s time. The MGA’s systems have a lot of APIs to support clients by taking away every process that can be automated and the firm utilises a variety of third-party data sources to free up their underwriters’ time. Using these third-party data sources means the firm isn’t chasing the broker or the client to provide data that is readily available elsewhere. This, in turn, makes it easier for brokers to engage with both Rising Edge and their clients.
Looking to the future, Gouraud stated that Rising Edge has no intention of being everything to everyone and is instead focused on building a reputation that matches its ambition of being dependable, reliable and consistent. The MGA sees the opportunity to add insight and value to the D&O space, he said, and so, it’s all systems go for the firm right now.
“The support that we have in the market and the volume of business we’ve already quoted and bound gives me a lot of assurance that we’ll make it but we have to stay focused on that,” he said. “Once we get to that ‘cruising altitude’ then we’ll enter the ‘marathon stage’ where we look at where we’ll be in three years’ time. And that has to start now, which requires a lot of discipline.”
Gouraud emphasised that the twin focuses for the business will be on ensuring that its capacity providers are delighted with the returns that Rising Edge is providing and that brokers feel supported and empowered by the service and insights they receive.
“And I hope that in three years’ time, when people [refer to] ‘Rising Edge’, it will be as the place to be for clients who want to have insights into their D&O risks,” he said, “and the place to go if they want a partner to help them manage these risks.”