Specialist insurers are often tempted to chase the product that changes everything. Philippe Gouraud (pictured), chief executive officer of Rising Edge, thinks the safer bet lies in products brokers already know.
The London-based underwriting agency launched in 2021 writing D&O, acquired a European MGA writing warranty and indemnity cover in 2024, and sold its D&O business to K2 International earlier this year. Gouraud said the deal allowed the firm to stay privately held while funding a strategy built around technology and data.
"Use of technology is not innovation. That's not what the innovation is. Innovation is to seek better outcome," he said.
Gouraud sees a safer bet in improving the cover, pricing, service or claims experience of an existing product. AI is a case in point. As adoption grows, brokers need to know how clients’ existing policies would respond to a claim arising from a decision made by an AI system. Developing a standalone policy would take time, with wordings, coverage and pricing all to be settled.
Brokers also need something to measure against. A brand-new product with a single carrier behind it leaves them unable to benchmark the price or advise clients whether they need it, and larger risks still need co-insurers, reinsurers and excess layers. The same holds for market technology. A trading platform used by one broker and three carriers gives nobody else a reason to change how they work, and in his view, what finally moved the market onto PPL was not a better platform.
"It was COVID, and there was no other way to trade than through PPL. No PPL, no trading," he said.
Gouraud said brokers already scrutinise new products well, helped by product governance and treating customers fairly rules. The governance behind any change, and the track record of the firm making it, deserve real weight. "We're in the business of protection, we're not in the business of gambling," he said.
For Gouraud, getting the price right has little to do with where the market sits in the cycle.
"I never understood the concept of hard market and soft market. This is something that is beyond me because last time I checked, no one has ever been forced to sell nor to buy," he said.
What matters from an underwriting standpoint is whether the rate is adequate for the risk being written. "We're not here to chase a bigger premium because the risk is bigger. We're there to chase a premium that is more adequate," he said.
He sees the next generation of insurance as resting on two things: technology that cuts operating cost, and data that sharpens underwriting insight. Efficiencies should be welcomed, he said, provided the savings reach policyholders. They may also help close the gap on risks that go uninsured because cover costs too much.
Better data, Gouraud argues, lets underwriters look more closely at what drives an individual company’s risk. In D&O, the traditional approach is to use an industry’s performance over the past 20 years and adjust for the company’s exposure. With more reliable data, underwriters can look more closely at how the company and its management make decisions.
Gouraud thinks third-party data could soon let underwriters assess a risk without asking the client a single question. “We may actually know more about the risk than the client themselves. I know it sounds arrogant,” he said.
He does still have one new idea. It is a policy underwritten at the level of the business rather than the peril, which would respond whenever a company suffers an idiosyncratic setback relative to its peers, whatever the cause. But for now, he described it as a pipe dream.
