The firm is looking to bring its platform to more MGAs, insurers and brokers as it continues its expansion journey
After inking two partnerships with Markel Direct and Insurtech 50 firm Percayso in May 2023, as well as hiring ex-Applied Systems big hitter Joe Sultana as commercial director, IS2 has signalled its plans to double its revenue over the next four years.
Although the commercial lines schemes eTrading platform has been a partner for Hiscox for more than a decade, founder Simon Pritchard believes the firm has always been one of insurance’s “best kept secrets” while operating mainly behind the scenes.
The business started life in 1996, but back then the very concept of online trading also known as eTrading was somewhat alien.
Speaking exclusively to Insurance Times, Pritchard said: “To cut a long story short, we knew Open GI and very early on they said, ‘look we’ve got all these customers and brokers, [but] we don’t think insurance will ever be sold online’.”
Fast forward to the current year – 2023 – and eTrading has grown in popularity. For example, Zurich recently reported strong growth in eTrading volumes, with some 99% of its SME brokers using self-service.
Now, with the market’s widespread acceptance of the aim is to grow IS2’s revenue from £1.1m to £2.5m – in its most recent financial results, the firm saw a 30% year-on-year increase in its revenue for 2022.
IS2 provides digital schemes solutions for insurers, insurtechs, MGAs and brokers. It is research and development (R&D) focused and has continued to invest in technology across its lifespan.
Recent hire Sultana added: “We didn’t want to run before we could walk, we wanted to prove a few things, which we did. We had a target to grow revenue by 25% [in Q1 this year] , so the business is now worth up to £1.1bn.”
The firm’s growth journey could involve acquiring complementary businesses or outside investment, added the pair, with the firm also carrying out plans to make further hires and build its engineering team.
Collaboration is key
Prior to joining, Sultana helped the business as a strategic board advisor for 12 months. When he started working for the firm on a consultancy basis, his role mainly involved building things.
“If you look at the insurance industry, it’s riddled with rekeying [information], building things more than once in different platforms. IS2 and Atlas have always been about building the things once and allowing connections to do that easily,” Sultana continued.
“That’s the critical thing that we’re now recognising, it’s becoming more and more prevalent. It’s not about one system doing everything – it’s about best breed using multiple technologies that are best in their field.”
IS2’s platform is known as Atlas. Last year, around £20m in gross written premium (GWP) moved through the platform, with plans to take this to £55m this year.
Sultana said: “Our plan is to get to £100m annually. Ultimately, Atlas is a digital distribution platform and we want to bring that to more brokers, MGAs and insurers, because we can service that entire ecosystem. Now, we already work alongside of some of the largest suppliers.
“We’re not looking to replace them, we’re looking to collaborate – collaboration in the market is key.”
Pritchard explained that many of the people making these decisions about platforms were “digital natives” and wanted to understand the underlying technology behind platforms they chose to utilise.
“Atlas facilitates this wider distribution model, so it can be used internally in a retail context [and] a broker business-to-business context. Essentially, it’s for the sale and administration of insurance products, mainly in commercial [lines],” Pritchard added.
Despite its growth, Sultana and Pritchard explained that IS2’s isn’t in the business of replacing broker back-office systems.
Sultana explained: “There’s nothing legacy about it, but it’s allowing all of those connections to be made build one single database, single client view, you’ve heard lots of talk over the years, but not many have been able to actually achieve it.”
Sultana added that some insurance businesses take technology on, but then can lose all knowledge of how to effectively utilise it after losing a key member of staff.
“What [Atlas] does do is give a layer of security to those businesses. They’re not on an island, we’re supporting them all the way,” Sultana added.
For Pritchard, the key change to the tech market here is that “the market has matured”.