Modus is targeting 1,000 brokers and £100m in annual GWP

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Three former senior staff that set up Arthur J Gallagher’s e-trading division have launched a new online trading MGA called Modus.

Modus expects to launch 20 specialist home and landlord products in its first year.

Backed by cyber specialist MGA CFC, Modus will provide automated quotations at point of sale for complex risks that other insurers would typically refer or decline if e-traded.

These risks range from non-standard construction, businesses operated from home, customers with previous convictions or properties that have been previously underpinned. The MGA will also offer standard home policies.

They will be distributed through software houses and broker back-office platforms.

The project is led by Simon Read, Scott Banks and Natasha Pettet, who left Gallagher in July.

Speaking to Insurance Times four days into its launch, Modus e-trading head of product delivery Read said that while a more mainstream insurer might typically quote for 70% of the risks it was shown, Modus aimed to quote for 95% at point of sale.

Read said this resulted in lower operational costs for brokers because it increased “quotability” for more complex risks that would normally need to be referred to an underwriter.

He added: “If there is a feature about a risk that is non-standard, most software houses would capture that but won’t return a quote and you then have to go through a manual referral or call a specialist provider.

“Our products are intended to provide point of sale quotations for risks like that. Where other insurers need a discussion, we specialise in automating more complicated underwriting models, so we can quote for a wider footprint of business.”

Read looks after operations and product development, Pettet oversees the underwriting, pricing and analytics, while Banks is responsible for sales, marketing and broker relationships.

They joined Gallagher-owned MGA OIM in 2011, where they set up the personal and commercial lines e-trading arm and developed an auto-rating model that provided point-of-sale quotations to brokers through a number of e-trading channels.

All three had been poached from Towergate.

Banks said Modus, which is already working with the largest personal lines brokers, would target 500 brokers in its first year.

Within five years it wants to be writing around £100m a year in gross written premium (GWP) and working with 1,000 brokers.

Next year Modus plans to launch more products in the commercial space.

CFC owns a majority share in Modus. The remainder of the shares are split between Banks, Read and Pettet, who manage the day-to-day running of the business.

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