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As high inflation and continued cost-of-living pressures continue to bite the balance sheets and budgets of insurance businesses and insurance customers alike, attention is turning towards the link between recessionary times and increased fraud. And while it shouldn’t take recessionary rumblings for insurance fraud to take its rightful place high on risk registers, all too often it does. 

Offering his insights into where the insurance fraud landscape sits today, Rory Yates (pictured), global strategic lead at EIS, emphasised the variety and interconnectivity of the factors at play. Inflation, the fuel crisis, geopolitical tensions, global food shortages and ongoing economic uncertainty are all pain points for the market, he said, and they’re playing out against a backdrop of rapid technological changes enabling complex fraud capabilities.

Take the UK, for example, he said – it’s projected that only £1 billion of the £3 billion lost to fraud each year is even detected. A glance at some of the numbers revealing the scale of the fraud issue globally offers insight not just into the size of the challenge, but also the size of the opportunity it presents to the market. However, he highlighted the importance of recognising that this opportunity is not just about potential cost savings or increasing efficiencies but also has significant implications for making customers’ and claims handlers’ lives easier and better.

Cost-of-living impact on insurance fraud

Interestingly, Yates said, the cost-of-living crisis is not just lending itself to an uptick in opportunistic insurance fraud but also to increased consumer understanding of the impact fraud has on their premiums. And while there’s a significant behavioural science aspect to insurance generally, it becomes particularly clear in the context of insurance fraud.

Where Yates feels some elements of the insurance ecosystem have let consumers down in the past is when it comes to building strong customer relationships founded on a mutual understanding of the faciliatory role insurance plays in communities and societies.

“Up until now, [insurance] technology has let the side down,” he said. “Principally, because within the technology, fraud is essentially done on the side which means it’s disruptive and interruptive to the insurance journey. It hasn’t looked to create that seamless, continuous anti-fraud operation sitting behind every customer interaction that is required.

“Whereas the fraud detection capabilities within our platform – and indeed the wider market – are fully integrated. They’re engineered to be orchestrated into the experience in a way which means you really are creating the best possible path for the best possible people.”

Detecting insurance fraud

Having a high success rate for detection services is important, he said, as it means you’re not inconveniencing legitimate customers in your quest to root out fraud. But even if a follow-up or more information is required, the right fraud detection service will not be disruptive to customers during their insurance journey but rather part of a seamless experience. This allows insurance companies to live out the principle of customers being innocent until proven guilty but also prevents them from losing customers who feel they have been unfairly maligned.

“The reality is that when it comes to opportunistic fraud, you’ve got to assume that a percentage of it is also customers just trying it out,” he said. “They’re thinking ‘maybe if I just ask for it, it will turn out I am eligible’. I’m not saying that ‘give it a go’ approach is without fault, but if you look at a typical insurance policy, as consumers, we don’t really understand what the terms and conditions actually are.

“We haven’t read the 300-page document, and anyway, it wasn’t written in English, it was written in legalese. Again, technology can overcome all of that. Even from my own experience, I have dyslexia and I’ve overcome that in all sorts of ways, often by using technology to do it. And that technology could be provided by the insurer while you’re buying your insurance online. There are all sorts of great technologies that can make it clear what you’re actually eligible for.”

Continuing the insurance journey

Where is the continuous experience in insurance? Yates asked. Beyond the point of purchase, the only time most customers hear from their insurance provider is at the point of a claim. He pinpointed the pervading myth, which is largely touted by the more mature end of the insurance technology ecosystem – that a great insurance experience is when you don’t hear from your insurer.

He understands where that mentality comes from, Yates said, and that it has its roots in the idea that this is indicative of a seamless experience.

“But I’m not an advocate of that mentality,” he said. “I think actually what insurers have to do is the opposite, to form really deep, meaningful relationships with customers because, increasingly, they’re having to be adaptive to people’s lives. I’m always hearing of claims experiences where people weren’t trying to be opportunistic but simply didn’t know what they had to provide to make a claim… And that to me is not a fair way of suggesting somebody has committed fraud.

“I feel like we’re at a tipping point moment because I think there’s enough reason to suggest that the barriers to insurers being good about fraud are no longer there, they just aren’t investing in [fraud capabilities] enough as a strategic asset. And I don’t think insurers should get let off as much as perhaps they have been in this space.”

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Insurtech MGA Qlaims has announced some further enhancements to its commercial lines claims assistance services. These changes will make the MGA’s Qlaims Insurance for Businesses easier to add to commercial property insurances and with a wider scope, now offering support for clients through new subsidence claims.

These enhancements are aimed at supporting brokers with consumer duty through easier access for cover and less overall barriers. The Qlaims Insurance for Business also provides additional value-add cover, in addition to providing clients with their own claims specialist to prepare and manage their claims for property damage and business interruption above a certain threshold.

The changes will also apply to Qlaims’ home product, which was updated in July, and with a new more competitive rating. It also comes with the partnership with Prestige Underwriting, a collaboration that will provide the latter’s 30,000 Coverall and Thatch clients with Qlaims Insurance as a part of the updated policy wording being launched this month.

“These changes are a key part of our strategy to make this cover more accessible to clients,” said Qlaims CEO Liz Latter (pictured). “The cover must be simple to attach to underlying insurances, without additional barriers around risk or client eligibility.

“Acting on feedback from our brokers we have now also included cover for new subsidence claims; and widened our geographical footprint to risks based in Northern Ireland. To enable brokers to add Qlaims Insurance easily, we understand the cover needs to be price competitive and wide, to complement the underlying policy,” she said.

What are your thoughts on this story? Please feel free to share your comments below.

The insurance-linked securities (ILS) market displayed impressive strength and performance in the first half of 2023, experiencing a record-breaking influx of new issuances, according to a new report from Swiss Re. However, it is worth noting that capital appears to be more disciplined in this period.

According to Swiss Re’s latest ILS Market Insights Report, concerns arose regarding the capacity of the alternative capital sphere to meet demand after Hurricane Ian struck in the third quarter of 2022. This led to a dislocated ILS market at the beginning of the year. Nevertheless, investors worldwide recognized an opportunity and successfully raised funds.

During the first half of 2023, the new issue market shattered records in terms of absolute notional value and the number of deals, the report found. A staggering amount of nearly $9.85 billion was issued. This level of activity in the primary market has been unprecedented, even when compared to historical annual issuance. In fact, the amount issued in the first six months of this year has already surpassed the total issuance for the entire year of 2022. As a result, 2023 is on track to become the fourth highest year for new issuance, Swiss Re said.

The report also highlighted the cat bond market as an alternative and complementary option to the traditional (re)insurance market, particularly during its hardening phase. Notably, the primary market experienced significant activity from both repeat sponsors and new entrants. Six unique first-time sponsors joined the market in the first half of 2023, bringing a diverse range of risks, such as US wind and New Zealand earthquake, to the forefront, Swiss Re reported.

Additionally, the Swiss Re Global Cat Bond Total Return Index achieved remarkable success, mirroring the primary market’s performance. It generated an impressive return of 10.34% since the beginning of 2023, marking a record-breaking six-month period.

Have something to say about this story? Let us know in the comments below.

Aston Lark Ireland, a Howden company, has agreed terms to acquire Dublin-based Kegra Limited (Finance Solutions). The acquisition is subject to regulatory approval.

Founded in 2011 by Ken Murray, Finance Solutions is a financial services intermediary specialising in mortgage broking. It also offers tailored financial solutions such as life cover, income protection, investments, and pensions.

The deal significantly strengthens Aston Lark’s offering to the mortgage broking market.

With 40 members of staff, Finance Solutions serves around 7,000 clients and has won multiple awards, having scooped the Brokers Ireland Mortgage Broker Expert award for the last three years in a row.

While Finance Solutions will sit within the Howden Ireland structure, the team will work closely with SPF Private Clients to develop their offering. Howden, the international insurance broker, acquired SPF Private Clients (SPF), one of the UK’s leading mortgage brokers, in 2023.

“I’m delighted to welcome Ken and all the team at Finance Solutions on board. Finance Solutions is a stand-out business in its sector, highly regarded as one of the best mortgage brokers in Ireland, and passionate about delivering the very best outcomes for clients,” said Robert Kennedy, Aston Lark Ireland CEO. “Their reputation and shared value of care, for their clients and their people, make them a fantastic addition to the Aston Lark and Howden business.”

Ken Murray, founder and managing director of Finance Solutions, said the acquisition is a significant milestone and will cement its position as one of Ireland’s leading mortgage brokers.

“Our growth over the past 12 years has exceeded expectations, and this acquisition allows us to further accelerate that growth,” he said.

“It demonstrates the confidence that exists in our offering, our people and in the opportunities for growth within the market here. Aston Lark and Howden’s experience, network and support will enable us to create more choices and an even better experience for our valued customers while still retaining the trusted advice and personal touch for which Finance Solutions is known.” 

What are your thoughts on Aston Lark’s newest acquisition? Tell us in the comments.

The Bermuda Monetary Authority (BMA) has joined Aon business White Rock Insurance (White Rock) to take action over alleged fraud involving insurtech Vesttoo.

The BMA and White Rock have jointly agreed to a course of action in the Supreme Court of Bermuda. The move is intended to pursue “maximum recovery” for insureds affected by alleged fraud involving Vesttoo and fake letters of credit (LOC), the BMA said in a news release on Friday.

The pair have agreed for the Supreme Court of Bermuda to appoint Charles Thresh and Michael Morrison of Teneo (Bermuda) to act as joint provisional liquidators for impacted White Rock Vesttoo cells, the BMA said.

“This action applies only to the impacted Vesttoo Cells. White Rock Bermuda continues to operate in the ordinary course of business, and this action has no effect on any other cells or White Rock Bermuda clients,” the BMA said in the news release.

Vesttoo scandal – what led to BMA and Aon taking action

The Vesttoo scandal, which relates to the emergence of allegedly fraudulent LOCs provided for reinsurance transactions through the insurtech’s platform, has led to some fronting insurance companies being placed under ratings reviews, and at risk of potential downgrades and credit profile weakening.

The source of the fraud is external to Vesttoo, Israeli insurtech Vesttoo has said.

Earlier this week, the insurtech commenced Chapter 11 proceedings as it faced court action in Israel and the US.

“Not only will they result in a strong, more sustainable capital structure, but they will provide us with the platform to aggressively pursue all parties that harmed our business.”

At the World Federation of Insurance Intermediaries (WFII) annual meeting in Amsterdam in 2022, Nic De Maesschalck, our sovereign leader, noted that it was extraordinary that representatives from both the United Kingdom and the United States of America had cited “political instability” as a key concern in their country. It was June. 

At home we were mired in the dying days of the Johnson premiership. In the US, the immediate past-president was doing all he could to stamp his mark on the upcoming mid-term elections by endorsing candidates running for the Republican nomination against incumbent party candidates.  The sense that two of the world’s most stable democracies were in, at best, turmoil was tangible.

Fast forward 14 months and has this problem gone away?

The Rishi Sunak-regime, by restoring the concept of basic competence to the governance of our country, has certainly calmed tensions.  But we are very far from a stable base where industry can plan and lobby to add our expertise to help drive public policy. 

We have spent considerable time over the last few years working with a number of government departments to help develop their net zero strategy. And we have been reasonably successful (I hope) in persuading ministers and civil servants that we are a community with deep knowledge in the area who, with the right incentives, can help deliver very positive outcomes. 

This work is valuable on several levels.  It helps develop compelling solutions for clients – specifically around climate transition and new green technologies.  But it also develops our relationship with government such that, when other subjects arise, they think of us a trusted partners to consult. 

A shifting focus on net zero

But the result of the Uxbridge and Ruislip by-election has, despite protestations to the contrary, seen government appear to retreat from a key focus on net zero. This comes only a couple of weeks after Lord Goldsmith’s resignation letter suggesting that the climate challenge is not at the forefront of the prime minister’s mind. 

Emission zones and low traffic neighbourhoods are in the government’s crosshairs; fossil fuel extraction is back on the agenda. Whilst the science remains the same and so helping clients meet the need to wean themselves off carbon is crucial, it does present a conundrum. Clearly meeting client need must be paramount over flirting with politicians.

But what if the two aren’t mutually exclusive? The issues around regulatory treatment of new technology and potential need for tax incentives to aid green development have not gone away.  But will they be met with as sympathetic an ear as they might a few months back?

Meanwhile, in our largest market, the man facing three criminal trials before the general election next November, is currently, according to the RealClearPolitics average, nearly 36% ahead in the polls for the Republican nomination for President. (Spoiler alert: US polls this far out from election day do tend to be disproportionately influenced by whether people have heard of the candidate, but it is still quite a big number.)

And even conviction in any of the trials is unlikely to preclude him from running for and, potentially, winning the Presidency. The only misdemeanours that would rule that out, I believe, being acts of rebellion as set out in the 14th Amendment and it may be a stretch to include the events of January 6 2021 within that definition.

Which presents another conundrum.  Not wanting to beat the climate drum too much but it is a good yardstick, the difference in environmental stance between a second Biden administration and a second Trump one is likely to be stark. And even if Trump is not successful in winning the nomination, there is a reasonable possibility that whoever does will have had to make significant concessions to the climate hawks to do so. So, again, the long-term interests of clients and the short-term interests of having influence with government might not align.

A chance for the insurance profession to shine?

All of which could come to vex, say, the person running the trade association representing London and international insurance brokers. But I think there is good news. This is a live issue, but managing issues is what this industry is supposed to be good at. 

Indeed, when we returned to the subject at WFII this year, we agreed that a world of heightened risk should be an opportunity for the purveyors of risk management solutions. And we will act on that. 

We will look to engage with the Labour party on this and other topics. And whether January 2025 brings President Biden, President Trump or President Brian Kemp (you heard it here first) we will find a way to ensure our voice still carries weight whilst continuing to do right by our clients. Political instability in UK and US may not be what you would want or expect in 2023.  But break it down to its component parts and it is just another thing we are good at handling.

What goes on behind the scenes of a successful fundraise in the insurance ecosystem? Lending their insights from both an investor and investee perspective, insurance industry stalwart Neil Utley (pictured left) and MD of Percayso Inform Rich Tomlinson (pictured right) each emphasised the blend of timing, trust and opportunity it takes to form a successful funding partnership.

Utley recently led a second major investment into Percayso alongside the insurance data provider’s venture capital investor Praetura Ventures, securing £2.7 million in funding. Contextualising the current environment, Utley highlighted the number of businesses that are failing to secure funding and how Percayso is not just bucking this trend but subverting it by commanding investment either from existing investors looking to invest again or people like himself who have been in the industry for decades.

“I’ve been in this market for donkeys’ years and I partly exited into semi-retirement about eight years ago after listing Hastings but I still kept an active interest,” he said. “Either by keeping up with the Press or through my friends in the market, I am always looking at opportunities. I believe the insurance market in the UK is probably the most disparate but competitive market in the world.

“And there’s always people wanting to start new ventures or expand existing ventures. So, there are always opportunities coming across your desk for funding and support. And to be honest, most of them don’t really have great potential or they’re in a very crowded market where you don’t really see anything different.”

Utley noted that he looks for three key factors in any prospective opportunity – that the people running it know what they’re doing, that he feels he can work with them and trust them, and that he believes their product(s) will make a difference. With Percayso, he said, the team at the top are very well-regarded and respected across the industry and they have a strong track record in creating market-leading propositions and products that stand out as new and innovative.

“Rich and Simon [James, Percayso founder] know the market from having built a successful, market-leading business before,” he said. “But they’ve created [Percayso] from scratch, from the ground up – starting with the Cloud and going down into the bespoke databases and creating something that’s flexible for all brokers, MGAs and software houses to easily integrate into.

“It’s a mixture for me of the team, the space, the opportunity and the product all being fantastic. I’ve seen the team do it before, so it wasn’t a difficult decision. Having turned down virtually everything else I’ve seen, it’s unusual for me to be so excited by an opportunity but I think this is very different.”

It’s not the first external funding raise round Percayso has been part of with the firm commanding a £3.4 million investment led by Praetura Ventures in February 2022. That was a big step for the firm and allowed it to gain a lot more traction in the market, Tomlinson said. In the intervening period, Percayso acquired the automotive data insight platform Cazana – a move which opened it up to a much bigger and broader client base and expanded its product proposition and internal capabilities. 

“But it also opened our eyes to the inherent opportunities and additional potential in the market,” he said. “It made us even more ambitious and gave us the platform for further expansion over the coming years.”

Percayso’s high-profile acquisition of Cazana as well as the expansion of its proposition to deliver a full quote intelligence suite has certainly made it quicker and somewhat easier for the firm to foster the relationships it has across the entire market. However, Utley highlighted that these have served as “acceleration” rather than a redefinition of the firm’s tried and tested growth strategy.

With an eye to where Percayso goes next with this new investment to its name, Tomlinson shared that there are a variety of growth plans on the agenda.

“We’re planning a lot of new product development,” he said. “There’s a lot of new areas that we’re looking to get into. Having all that ex-Cazana data in-house with our Percayso Vehicle Intelligence offering has sparked a lot of new product development ideas around where we could take that next.

“Equally we’re looking at our core platform and the amount of data we’re collecting on a daily basis now with 10s of millions of quotes and policies [feeding in] huge amounts of information about vehicles and individuals. That just leads to more and more opportunities to create new products out of that for things like verification, fraud detection, and understanding your policyholders and customers as an insurer.”

New product development is a core area of focus, he said, but that doesn’t mean that Percayso will be taking the eye off the ball when it comes to its existing platform. Making sure that core platform continues to be resilient and high performing is essential because customers rightfully expect a lot from Percayso as a partner in terms of how it supports them.

“We’re very proud that we’ve had 100% uptime, bearing in mind the amount of transactions we’re doing, and the resilience we need for that kind of capability,” he said. “There’s never been any outage or downtime. We’re pretty proud of that and obviously we want that to continue so we need to continue to invest in the platform so there’s lots of plans there.”

Having access to Utley’s 30-plus years of insurance expertise will also be “hugely invaluable”, Tomlinson said, and he noted that he’s already received affirmation from the market of the natural fit represented by the partnership.

“My role is to help where they need it,” Utley said. “I don’t pretend to be an expert on what Percayso are doing, they’re the experts on what they do. What I can do is be a sounding board for ideas and ask pertinent questions on monthly board packs and help Simon on structuring things and things like that.

“But I’m not interferer of good businesses. I’ll help them with the issues that they will inevitably have at various times, because I will have probably been in a similar place before at some time or another. My role is very much as a helper and a coach, doing whatever I can to help while not interfering in the business plan. They’ve got a very strong strategy and plan, and I’ll just be helping them put it into place.”

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Destructive February earthquakes in Turkey and Syria proved a devastating example of global challenges around building safety standards and resilience measures.

The February 6 earthquakes that shook Turkey and Syria were the deadliest global disaster since 2011 and are expected to have driven economic losses of more than $90 billion (£71 billion), according to Aon.

The death toll from the earthquakes, which struck on February 6 and hit 7.7 and 7.6 on the Richter scale, quickly surpassed 50,000. As of March 1, more than 11,000 aftershocks had occurred, according to Turkey’s Disaster and Emergency Management Authority.

In the aftermath of the quakes, footage showed downed buildings and widespread devastation.

Among these buildings, according to media investigations, were new builds, which should have been held to a rigorous set of safety standards.

“Turkey has quite modern building codes, which are supposed to help with how buildings perform in earthquakes,” Aon head of catastrophe insight Michal Lörinc told Insurance Business. “The reality is that in some cases, the building codes were not followed properly, or they were not properly enforced, which resulted in physically higher material losses.”

While the economic loss of the earthquakes across both Syria and Turkey is projected at $91 billion, a fraction of this is likely to be covered under insurance.

The Insurance Association of Turkey has estimated private insurance sector losses at TRY76 billion (£2.2 billion). The Turkish Catastrophe Insurance Pool scheme has received almost 600,000 claims, but total payments could reach just TRY29.5 billion, according to estimates published by the entity and referred to by Aon.

Turkey had building safety standards, but experts fear these were not adhered to

Turkey is no stranger to destructive earthquake activity. In 1999, the country was rocked by the magnitude 7.6 Izmit earthquake, estimated to have led to more than 17,000 fatalities. It was in the aftermath of this catastrophic event, more than 20 years ago, that new standards began to be brought in.

But soon after the February 2023 earthquakes hit, experts shared concerns that some of the damage could and should have been prevented.

Speaking in February, Professor David Alexander, an emergency planning and management expert at University College London, told the BBC that part of the problem was “that there’s very little retrofitting of existing buildings, but there’s also very little enforcement of building standards on new builds”.

“This is a recurring theme around the world and there’s a need to adapt to the disasters of today, because we’re talking about climate change, and how it’s going to affect future catastrophes, and that’s going to put even more pressure on the building stock,” said Lörinc. “We’ll need to prepare and invest into resilient building stock, and you can see that even now it cannot perform 100%.”

“This event showed that there are still problems – even though there were building codes in place, they were not properly enforced entirely.”

Hurricane Ian impact in Florida showed how rigorous building safety standards and adherence can help

Like Turkey, the US state of Florida is no stranger to disasters, and it too has a stringent set of building safety codes.

Hurricanes, rather than earthquakes, are the potentially costly and deadly major threat facing Floridians.

“We also saw this theme in Florida last year with Hurricane Ian, where you can see how building codes help protect the property,” Lörinc said. “Our teams went to Florida to examine the damage, so all the parameters and the stuff that is put into the buildings that helps to prevent damage from hurricanes, and in Florida, it works relatively well.

“Florida is, again, one of the places where the building codes are stricter, and more properly enforced.”

Individual and smaller dwellings also at risk without resilience boost

It is not just larger buildings that pose a risk, with individual homes and units potentially built of materials that may prove counterproductive or lacking resilience in the face of a catastrophic event.

Across continents, insurers and authorities have pushed for disaster affected regions to look to greater resilience measures, through initiatives such as the UK’s ‘Build Back Better’ scheme.

With economists’ projections undulating between prophecies of doom and forecasts of blue skies in the form of a V-shaped economic recovery, insurance intermediaries are facing a tumultuous period.

As executive chairman of intermediary & market services at Davies Group Ltd, Chris Butcher (pictured) has a ringside view of the interplay of these factors and the knock-on effect that these conditions are having on M&A and innovation in the marketplace.

“Being heavily involved in MGA launches, I see the trends around what’s happening in the UK with MGAs, particularly what’s happening in terms of capital flow,” he said. “I think my broadest observation would be around the slight slowdown in available working capital for these businesses. There are exceptions, of course… but that capital element is slower which also affects further raises, where a business was expecting to be able to raise more cash to get it to the next level of growth. It’s just not as available as it was.”

Butcher highlighted that while Davies has not seen any resulting failures in its portfolio of 35+ businesses, it’s clear that conditions are getting tougher and that intermediary businesses are facing a challenge of scale. The MGAs most exposed to this are those which are running on optimistic predictions that can’t meet their rising cost base, he said, though this can be counterbalanced by other factors, including strong customer demand.

“Essentially, if a business has got decent distribution and hasn’t seen a massive reduction in customers, they still have an opportunity to grow,” he said. “The key factor is where they’ve anticipated and slightly leveraged positions in terms of getting cash in that will allow them to step up the business at pace. It’s the rate of growth that will make the difference, though of course this could be offset by the range of global factors coming into play.”

Challenges bring opportunities

As night follows day, challenges bring opportunities – which Butcher noted holds true in the present MGA market where he can see the opportunity for larger, well-capitalised players to sweep up businesses and strengthen their proposition through targeted M&A. This fragmentation element isn’t limited to MGAs, he said, with broker consolidation also opening windows for brokers or broker teams that want to explore new horizons to spin off at the point of acquisition.

“Certainly, we have been setting up new brokers that are offshoots of existing businesses and are coming in as teams,” he said. “We set up Ballantyne Insurance Brokers relatively recently and we have got a pipeline of others that are coming in. There’s fewer than in the MGA market, but they’re there. And there will always be fragmentation, there will always be teams that want a change of environment or who see an opportunity and want to seize it.”

Broker and MGA differences

Discussing the differing needs of Davies’ broker and MGA clients, Butcher identified that the focus of the broker model tends to be on clients. To put it in basic terms, he said, brokers look to enlist Davies to take on the full suite of the back-office activity for a lot longer. And even once they receive full regulatory approval, they often still want to leave that back-end platform work to the expertise of the Davies team, because they don’t view that as their core activity.

Meanwhile, the MGAs tend to be more technology-focused, he said, and they’re looking to build a business and build out their own back-end team. Taking for example, Coalition – a well-capitalised US-headquartered cyber insurance business that recently entered the UK and EU market with the support of Davies – what the firm needed was expertise on how to become operational quickly within a tight governance framework.

“Our model allows us to create a legal entity immediately to which we can lend regulated permissions, subject to FCA approval, quite quickly,” he said. “We can provide that framework of support to the business from day one, because we have all those resources to hand. That model offering speed to market, tight governance and tight control, as well as the ability to trade under our license, continues to be a persuasive offering.

“So, for Coalition, which is highly tech-driven and already has a lot of expertise and a strong proposition, what they needed from us was the confidence to know that they’re doing the right things within the UK business environment. That comes back to compliance structures, knowing the risks of the business environment and the right people they need for the business, and understanding the broader governance framework.”

For Butcher, it is the opportunity to support Davies’ range of clients and evolve the group’s offering as these businesses grow and change that makes his role so interesting. Looking across Davies’ client base, he said, it’s clear that the spirit of entrepreneurship is alive and kicking, and it’s great to see those insurance entrepreneurs who have the energy and the idea of doing things differently and taking the market to the next level.

“I think it’s also a testament to the ability to form a small business under the type of structure we have, which provides an opportunity [these entrepreneurs] wouldn’t have otherwise,” he said. “It’s a point I regularly make to the FCA – that the appointed representative model in the UK and having strong organisations which can support that innovation is critical.

“You don’t want to lose the strength of the AR model because it is a really vibrant and helpful support to the UK economy, providing a sandbox structure, which allows a lot of entrepreneurial, innovative businesses to get their start.”