There is a “huge appetite” for drones in the Lloyd’s market as the technology’s potential uses explode in society, says founder and managing director
Six years ago, Simon Ritterband launched an appointed representative (AR) named Moonrock Drone Insurance after spotting an opportunity in the drone insurance sector.
Ritterband’s original vision in 2016 was to streamline and improve the sourcing of suitable drone insurance after experiencing his own frustrations when looking for a policy himself.
The Hiscox-backed firm offers a commercial lines product and a personal lines policy aimed at hobbyists and recreational users to cover theft, accidental drone damage and fly-aways.
And last month (27 July 2023), Moonrock received FCA approval – meaning the drone broker is now a fully subscribed MGA.
The firm is now in the throes of joining the Managing General Agents Association (MGAA) and is applying to become a Lloyd’s cover holder.
Prior to gaining FCA approval, Moonrock was a broker with only one product on its books.
Ritterband, the founder and managing director of Moonrock, tells Insurance Times: “An AR is a really great way of getting into the market. I saw this opportunity in the drone insurance market and I didn’t want to wait around having to be authorised and didn’t have the funds to do it.
“But you get to a point [when] you just have to become fully authorised if [your business is] successful and growing.
Ritterband believes that there is a “huge appetite” for drones in the Lloyd’s market as the technology is being used more and more in everyday life for uses as diverse as surveying, inspection, transportation, TV and film.
“That again, gives us even more opportunities in the Lloyd’s market,” he adds.
“The breadth of industries using drones now is so prolific, the genie is out of the bottle with drones. They’re helping businesses save money and time.”
But it was the Covid-19 pandemic that really cemented the usefulness of drones. Back in 2016, when Ritterband launched his business, the use of drones was very much in its infancy with the drone insurance market in a similar position.
Ritterband continues: “Initially, I thought ‘Covid is going to decimate the business’. But what we found within a few weeks was that because everything was socially distanced people realised they could not do their jobs without a drone. So Covid was a massive boost to the business as it supercharged the whole drone industry.”
For Ritterband, Moonrock’s decision to become authorised was impacted by growing pains, as the firm was getting to the point where it was being “hamstrung” in terms of access to data and looking after clients properly.
He explains: “Up until now, everything had to be approved by our principal firm, Aston Lark. Everything was so slow and it was prohibiting growth.
“But there are benefits of being an AR, insofar you can start trading quickly.”
For example, Ritterband says that payments were slowed down under the AR model.
He explains: “We were getting paid six to eight weeks after we’d sold policies. So, there was a real delay in premium and in commission payments as well.
”When you are fully [authorised] you can reconcile that far quicker, liaise with the underwriters, get your commission paid quicker. There’s a big difference with the business being able to control the cash flow.”
Following becoming fully authorised by the regulator, Moonrock has agreed a deal with Hiscox for capacity.
Ritterband adds: “Delegated authority used to sit with Aston Lark and we would then be an AR of them as the distribution of that product. Now we have our own delegated authority with Hiscox for that drone book of business.
“We felt it was impeding our growth – becoming fully authorised has given us a real bazooka effect to start growing quickly. We can trade instantaneously now with third party brokers, network distribution with one or two partners via arrangements with retailers, drone school organisations and referral business. All that stuff can be done much quicker.”
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