New insurer using traditional values to take a slice of the PI market

While the struggles facing some professional indemnity insurers are well known, one firm is claiming to offer a fresh approach.

Peach Pi launched earlier this month and is wooing brokers with its specialist professional indemnity and property offering.

But far from being a start-up, Peach Pi is an expansion of a 121-year old business - NPA Insurance, which provides PI and property cover for pharmacies.

For managing director Paul Coleman - who spent many years with Norwich Union (now Aviva) - the purpose of the business is to go back to more traditional values, especially in the wake of the reputational damage the insurance sector has suffered from the high profile FCA business interruption test case.

He told Insurance Times: ”We are traditional. We like that. We want to get back to the old-fashioned values almost - ’my word is my bond’ approach.

The three-way relationship between intermediary, insurer and customer has been eroded for years, he said.

”We think there are fundamental changes on the way. We’ve been looking for some years to go into the market, going back to the mutual ethos almost - a three-way relationship where you get a policy that doesn’t have an awful lot of exclusions, and actually tells you what you’re covered for, more than what you’re not covered for.

”We want to remove that ambiguity.”

Clear and concise 

The new venture is aimed at building some three-way relationships, Coleman said.

He continued: ”We want to be clear and concise with covers.We [as an industry] really lost that from where insurance started. Working for a member-owned insurance company has highlighted to me how insurance has drifted away from that original intent.” 

Head of distribution Allison Hughes told Insurance Times that that the business has been having fruitful conversations with brokers. 

”We talk about hand-picked partners, and that’s true. We are not going mass market with package products and rates.

”We have a very carefully selected panel of distribution partners that we will know extremely well.

”We will grow carefully. The claims service is the product, we have to protect the integrity of that service at all costs, and going out there with a mass-market proposition is not what that is.” 

Hughes has been having conversations with brokers since April, but the Covid-19 pandemic has accelerated things, she said, “there is a demand for an insurance company bringing new capacity to the market.”

She is talking to brokers about co-creating products for their small professional customers.

”It’s not package off-the-shelf stuff. We say ’let’s have a conversation about what the risks are. Let’s talk about schemes, delegate authority, and that has clearly struck a note with the broker market,” Hughes said.

Responsibility

Hughes joined Peach Pi earlier this year from AXA where she was head of business evelopment for personal intermediary and corporate partnerships.

She said the experience of joining an insurance company born of a membership organisation (NPAI) was “enlightening”. 

”I’ve often wondered, while working in insurance, what level of responsibility we have to the broker for the way we treat that end customer.”

Because Peach Pi is forged from a membership organisation, Hughes said ”there’s no way you can’t recognise the level of responsibility you have to deal with that customer in the right way”.

Taking that into the broker market, the conversations have been quite healthy in terms of reassuring the broker that we understand that if we don’t handle those claims and customers on your behalf, then that’s going to really damage your business,” she said. 

And Coleman is keen to emphasise that Peach Pi is not an MGA, “when we embarked on this, we realised that brokers need to see the colour of your money if you’re going to do a venture like this.

”As an insurance company, we do it ourselves with reinsurers”.

Peach Pi has been given a BBB S&P rating, purely because of its size, Coleman said. ”[S&P] were very complementary about our plans. They said our capitalisation was well beyond a triple BBB rating.

”We want to use that capital more efficiently. So we’re sitting on a big solvency ratio basically.

”We have plans to go out into other worlds, and we’ll do that judiciously. We are not going out there to challenge the Avivas, the AXAs on the big ticket stuff.”

Pipeline

Hughes said the business already has a healthy pipeline of schemes opportunies, and there will be product on Acturis in the first quarter of next year for brokers.

Whereas others see professional indemnity as a problematic market at the moment, Coleman explains why the cover works for Peach Pi. 

”Everyone gets intimidated by PI. We underwrite it pretty successfully, and have been in it for 100 years. 

”There are huge challenges for the solicitors, architects of this world, he said. 

”Are we going to be playing in that space? Realistically we’re not going to be doing any of the heavy end stuff.

”What we would like to do is those people who see themselves as professional, whereas there might be a stigma that they’re not professional, like a physiotherapist or a fitness instructor.”

Peach Pi is looking to play at the micro end of SME. ”That in itself tells you that we’re not going to do alot of solicitors etc, but there is a need for people giving advice and treatment. 

”When we did the last round of negotiations with reinsurers for our PI, it was at the outset of lockdown and Covid. Everyone wanted to exclude communicable diseases from our cover - and we’re phamacists! How could we possibly allow that?

”The reinsurers listened to us and said ’head office is telling me you shouldnt have this cover’ we were saying we can’t do without that cover because of our market. We got it.

”There are blanket exclusions coming in across the world on some covers. There are huge issues. We aren’t going to solve the problems of the high-end PI and providers, but we have a good handle on the sort of business we want,” Coleman said.