Let’s just get straight into the Aston Lark-Howden thing and what it means for the broker sector.
START: TECH & CHEAP MONEY ARE FUELLING A ROLL-UP
IE has counted some 20 acquisitions by Aston Lark in 2021 before the Howden Group deal was announced this week. It’s a trend that has gathered pace over the last few years and as GRP has stated, the technology that can now be deployed to automate admin, claims and pricing is something you can apply across a range of specialist broker brands.
But the other factor here is cheap money. As many have noted in the insurtech sector, getting Series A-D funding isn’t that difficult if you have an innovative solution to an insurance market problem. Howden, along with many others has a substantial supply of private equity cash at its disposal and as interest rates are low, expect more action in the broker sector.
Indeed, the FT reported that Peter Blanc, who now becomes Howden Executive Chair of Retail broking at Howden, is targeting more acquisitions. So hang onto your hats.
RUN: RAW DATA ISN’T MUCH USE
A press release came into the IE Inbox this week that demonstrated how data on its own, without context, is pretty much useless. The news that a Birmingham postcode has the most speeding convictions per capita is slightly interesting but it tells a broker or MGA nothing about risk.
For that, you need to overlay the speeding data with the location of the offence, not the registered keeper’s address, then add local vandalism or theft claims by postcode, then slap on a layer of PI claims data by postcode, then by vehicle and email address and phone number. See what we mean? With data, you only get the full picture when you join the dots and analyse patterns, trends and unusual spikes.
GROW: THE CREDIT HIRE THING IS RIPE FOR TRANSFORMATION
News this week that broker MCE is planning to save £8m a year from the credit hire bill got our attention. As they mention, many replacement vehicles can be way over the spec of the damaged car, or motorcycle, and the system of using hire car contracts can easily lead to a medium-term commitment. That in turn, raises the costs of settling the claim.
There is definitely an opportunity here for an on-demand `car match’ facility to replace the traditional contract hire arrangement. Something like By Miles, a PAYG system that provides a basic car or motorcycle based on journey need, not a couple of months contracted hire. In an era when many people no longer commute, the time is right to update the credit hire system.
AND GROW: FLOOD INSURANCE REGISTER IS A FORCE FOR GOOD
BIBA sent us word this week regarding their Flood insurance register, which is really all about bringing flood and escape of water specialists together with brokers, at the exact point of need.
You know it’s easy to walk away from parts of the UK where flooding each winter is a regular event, but insurance can be a force for good, it heals lives, as one company founder told IE a few years ago at the BIBA show.
Given how climate change now dominates the political and mainstream media agenda, the opportunity presented to the insurance sector is huge. Rather than being seen as the baddies, insuring coal power stations or lithium mines in the Congo, insurers and brokers can show they can step up when floods ruin lives and businesses, by developing affordable insurance products for the future.
On that positive note, see you next week.