Brit is taking a data-led approach to solving various pain points in the London Market in its latest partnership with Google Cloud

Back in September 2019, Lloyd’s of London’s vowed to take a stronger stance on its expense ratio for business planning, after a “moderately successful” 2018 for syndicates.

Fast forward to 2020 and a new standalone, fully digital and algorithmically-driven follow-only syndicate named Ki claims to have the solution.

Being a collaboration between Brit Insurance, University College London (UCL) and technology giant Google, it has high ambitions of reducing the expense ratio for the London Market, offering instant capacity, saving brokers time and operating costs, as well as benefiting the client with a faster service.

It aims to do this using a data-led solution, as opposed to the traditional document-led approach commonly used in the London Market. 

Ki’s algorithm means it can quote automatically via its digital platform, which brokers can access from anywhere at any time using Google Cloud.

James Birch, head of innovation at Brit Insurance, told Insurance Times: “Ki is the first incubation of that partnership focusing on the follow-only market within Lloyd’s of London, trying to streamline a lot of the operational inefficiencies, as well as providing more broker led solutions, that provides an advantage to all market participants.”

And Birch is no stranger to technology, having co-founded travel insurance insurtech Pluto – an experience he said has been a good foundation for his current role.


James Birch_Brit Insurance

James Birch, Brit Insurance 

For the past nine months, Brit Insurance has been working with Google. One of the hypotheses it set out to tackle was building a fully digital follow only model for Lloyd’s of London.

Brit then approached Google to tap its expertise in a bid to “redefine the specialist insurance market”.

It will continue to work with Google Cloud for the rest of the year, going into 2021 to solve some of the biggest pain points in the industry.

When asked to define a follow-only syndicate, Birch said: “Ki will only follow Brit or others that we are calling nominated leaders.”

Birch said that Ki will never negotiate on the price or terms – it will never say no, this he believes provides a “step change” to brokers.

This is to focus on leadership capabilities and Brit’s core business, as well as trying to solve some of the biggest pain points within it.

With a slogan like “risk simplified”, Birch said that when choosing Ki as a name for the syndicate he wanted something simple and easy to remember.


But the focus is on data, with the intention of solving some of the biggest problems in this realm for both Brit and commercial insurance.

“There’s an inherent administrative burden both on underwriters and brokers in the market, when completing follow-only business because a lot of the administration tasks require overseas sanction checks etc, carried out by the leader,” Birch said.

The syndicated nature of Lloyd’s has meant that there are some very manual paper-based tasks, particularly in the follow-only market. Those tasks are then repeated. For example, for ten followers on a risk, those tasks are repeated ten times across the market, and the same checks are made ten times over for one client.

However, Ki aims to complete these balances and checks in a more efficient manner by leveraging Google’s advanced technology and machine learning modules.

“What Google have tried to do is take a data-led approach to the market rather than the typical document-led approach in Lloyd’s market,” Birch said. ”The follow-only market is clearly one where you can apply a follow-only approach quite easily as all the data exists, it’s really just about how to consolidate that data.”

Ki has taken an algorithmic approach to underwriting to solve this, building 37 algorithms with UCL.

“This allows us to consume a lot of data, which ultimately allows us to reduce expenses in the operation of the business. How do you more efficiently deploy capital against risk? It’s about the business model,” Birch added.

He compared the set-up of Ki to a fund manager rather than a business syndicate.


But Birch believes that Lloyd’s has stood up well under the pressures of Covid-19, considering that to date it has been a document-led market.

“That said, there are some clear difficulties transacting certain risk, ultimately it has been a face-to-face and document led market and it [Covid-19] has highlighted the need for digital propositions in the marketplace,” he added.

Birch foresees a future where the specialist insurance market operates in a similar way to capital markets – applying attached capital to risk.

When asked why any other of Lloyd’s syndicates have not gone fully digital, Birch said that he believes it is because it is difficult.

“What’s forced that change is the expense pressure on the market, it needs to reduce its expense ratio,” he said. “Brokers are not going to reduce acquisition charges, so the only way to do that is to apply new advanced technologies.”

Reducing the expense ratio

Expense ratios consists of two things – pure expenses such as head count, tech etc and acquisition costs and broker commission.

For decades, broker commission has been up one point, down one point but has not changed.

“It’s just a fight every time between underwriters and brokers, and a waste of everyone’s time,” Birch said.

This partnership has allowed Brit to bring its expense ratio down, as well as ensuring that all the market participants win in this scenario – brokers save on operating costs because they spend less time getting follow capacity.

Brokers can then focus on the lead capacity and negotiating terms of price with the leaders in the market and their client.

In this way, Birch said the client is benefiting, the broker is saving time and money, Brit is benefiting, and the London Market’s expense ratio is overall reduced.

Ki will open for trading on 1 January 2021. Brit has also recently entered the high net worth market with the launch of Private Client, a proposition set up to work with brokers operating in the high and ultra-high net worth markets. 

Read more…Briefing insurtech: Surviving Covid-19 government schemes for insurtechs ’not all it’s cracked up to be’

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