Active engagement business model will prevail in program insurance sector

Active engagement business model will prevail in program insurance sector | Insurance Business America

Active engagement business model will prevail in program insurance sector

As executive vice president and head of US Programs at AXIS Insurance, John Tatum’s focus is to build on AXIS’s long-term commitment to growth in the burgeoning program space, where a model defined by more active engagement between insurer partners is prevailing.

“In the past insurers raised the capital, put the guidelines in place and took more of a hands-off approach - but nowadays, if you’re not bringing anything to the equation other than paper, you won’t be a long-term player in the space,” Tatum said, adding that managing general agents and program administrators are looking for stability, ease of doing business and dedication from their partners in the program space.

“We have a team just for program business and that’s a big differentiator for us - a separate go-to-market strategy is critical and has enabled us to source new opportunities while retaining the ones we have.”

Over the last few years, AXIS has built a team of strong underwriting talent with an array of expertise to ensure that each individual can provide optimal value to every opportunity. The company has differentiated itself by its expertise in complex risks and the high priority that it places on client service. 

“We look for people with expertise so we can provide training for our MGA underwriters, offer coverages that are tailored to their current set-up, and have a dedicated claims team. Having such a strong focus and a dedicated business unit that runs in conjunction with the business is beneficial for us and our partners,” Tatum said.

The team is seeing more new program opportunities as carriers review their overall portfolios to determine if program business is an area they want to focus in or not.

By keeping an open mind and shying away from a cookie cutter approach, Tatum and his team work with various smaller family-owned PAs and MGAs as well as larger ones that are part of wholesale brokerage operations. Finding niches and helping these people grow either geographically or through product and service is an approach that serves them well.

“We look for partners that align with our business model, and then we consider how to make the relationship work and how to do things differently,” Tatum said. “We’re interested in a long-term partnership that benefits the individual in terms of potential growth and profitability, and benefits us in terms of financial return and our position in the market. It’s important that we take the time to find those people.”

Technology is a big part of program insurance - it has to be, Tatum noted - and the tools developed by the actuarial team help them to manage their portfolios by sourcing new program opportunities and maximizing the growth and profit of current ones. That has been invaluable as it allows the team to provide trading partners with a rare glimpse into their portfolios - something they haven’t experienced before but that they appreciate - and is another way to bring value to the relationships.

Whether it’s reporting and handling automated claims for simple things that improve turnaround, or the underwriting process itself in terms of automated renewals, Tatum said anything that improves the customer experience and frees up capacity for the team means they have a greater ability to succeed. There’s usually someone onboard “strictly focused on making sure we have all the tools we need to compete for the long term.”

Although the program space is experiencing some macroeconomic challenges due to COVID-19, the AXIS Programs team stands out as they take the time to not just understand the insurance aspect of any class they write, but understand the broader landscape, Tatum said.

“What are their needs from an overall business standpoint? How does the team’s risk mitigation strategy play into that? Understanding these programs helps tremendously in terms of crafting solutions for them that make sense and resonate,” he said.

The team is dedicated to each relationship, spending time “not only on what today looks like but, more importantly, on what the future looks like.”

“We’re focused on the present and the future because this current market won’t last forever, and we don’t want to wait until it ends to start applying the tools we need to keep our growth trajectory and profit trajectory on a good course.”