Behind the Headlines: InsurX’s Gilbert Harrap on the evolving world of smart follow

Hello and welcome to Behind the Headlines brought to you by Insurance Insider. I'm your host Sam Casey and before we begin a reminder that you can subscribe to the show on our website or on all major podcast platforms. In today's episode we are exploring an area of the market which has experienced rapid structural expansion in recent years, the smart follow market. I'm joined by Gilbert Harrow CEO of Insurance Insider. Since launching in 2020, the company has established itself as a well-known player in the sector, providing a solution to brokers and underwriters to allow them to trade algorithmically. Gilbert told me that the next step for the business will be to ramp up the work it does with lead underwriters in the open market. You know, this is the year where we kind of really grow up into that kind of business. I think we always want to maintain that kind of start-up mindset. But what we're kind of really looking at is that growth into working with open market teams and actually really allowing them to go. This isn't just technology for portfolio solutions. It's broader than just smart follow. It's sort of how does leads get involved in this as well. We're doing that in the construction market where we'll be helping leads as well as followers trade capacity. Before that, I'm joined by Insurance Insiders Abbey Day for our news discussion. Abbey, thanks for coming and speaking to me today. Thank you for having me and it's my turn to ask questions in time. Indeed! So, a piece deal has been struck between Iran and the US. Maybe you could tell us a bit more about the latest developments in the Strait of Amuse following these piece negotiations. What's going on? Yes, so really since the end of February, when this war kicked off the shipping situation and the Middle East and the Gulf has been a huge news story across the world. Massive breakdown and trade and flows, particularly of energy, other core assets. So, there's been a real impetus to get the Strait of Amuse back open as part of this piece deal which Trump struck with the Iranians. He did in his unique way send out some bombastic tweets saying everything is fine and Andy shipping can get back to normal. The reality is I think that it's going to be a very gradual resumption of shipping activity. Speaking to insurers, they say their clients still have a very cautious view of the risk there and it will just really be a case of a few ships sailing, seeing if the crossing is safe and if it is, it'll gradually pick up from there. So, it's not quite the revolutionary shift back to normality which has been trumpeted but it might be a step in the right direction. Okay, so it's not necessarily a quick change but are there any immediate kind of changes that insurers should be looking out for or anything that even is going to happen in the short term? Well, there has already been a small uptick in the number of vessels sailing and therefore opportunities for warranturers to provide coverage. In terms of pricing, I think that's still really staying a very elevated level whilst everyone digests what the level of risk is. So, this type of insurance is charged by the percentage of the value of a ship for seven days typically. You're still talking a minimum probably of 2.5% of a ship's value really up to breaks have said to me sometimes seven and a half percent if it's viewed as a particularly risky asset. So, these are huge amounts of money so clients as well have to think very carefully before they decide so. Okay, and now we're kind of reaching towards hopefully the end of this and we can look back. Maybe you can tell me a bit more about how the market has responded through this crisis. I think the marine war insurance market has come in quite a lot of criticism during this crisis. Most of it slightly unfair because there was a perception which emerged due to this function of notes of cancellation which exists in policies whereby underlying coverage is cancelled and then reinstated to account for elevated level of risk and this was misinterpreted globally. It seems also by President Trump himself as insurers stepping away and being totally unwilling to provide coverage. The markets remained open throughout its function as it has through other wars. So, I don't think there's too much to learn in terms of how the market is structured but maybe in terms of how it puts its message across some lessons to learn more. And you mentioned lessons learned. Are there any lessons that the market has implemented from years gone by or any lessons they think they'll take away? I think there's a specific thing which I know is happening. I was at a conference this morning and she the camera of the LMA was speaking about it is that there are moods of foot to try and rephrase these clauses of notes of cancellation to as yet unsided wording but something which makes it a bit clearer that insurance is not being cancelled. It's being adjusted and reprised to reflecting elevated level of risk. So, I think if that can be achieved it'll hopefully avoid these kind of misinterpretations which happened during this crisis. Okay, great. Thank you so much. Abby, thank you for coming and speaking to me. Insurex was established in 2020 with a tech proposition to help brokers and underwriters trade in the smartphone market. Given how much the smartphone space has evolved and expanded in recent years, it's great time to be sitting down now with its founder and CEO Gilbert Harib. Gilbert, thank you for coming on the show. Brilliant to be here. So, you launched insurex back in 2021 but you've been in the insurance market for a bit longer than that. Can you explain your career in insurance and what pushed you to launch this company? I actually started as an underwriter, property treaty underwriter. So, I did about six years in the market for Amlin as it then was. I've always said I sort of loved the market, loved working with people, loved working with kind of numbers. I couldn't believe how sort of backward the market was on process and how it was sort of leveraging data and technology. And given that is the market's product, we don't physically make anything. I kind of thought that we were sort of missing something. That motivated me to think, yeah, I think this industry is going to really change and I like to sort of be part of that change. So, I went off, actually got an MBA and then came back, I sponsored the MBA, so I came back to Emma Salmon as it then was in the trashy role becoming their head of trashy for the re-insurance business. And it's really through that work that I was really allowed to explore the kind of as the future of the market and really kind of uncovered this of the opportunity that insurex is pursuing. And can you explain for people who don't know what insurex does, broadly speaking, you're involved in the world's of smart, but that's quite a broad, all-encompassing term. So, today, a lot of what we do is what we call smart follow, which is really allowing brokers to get access to capacity from insurers in a kind of tech-enabled manner. So far, that's been about follow, although we are now deciding to move into applications for lead as well. We're now calling it broaders of smart trading, but insurex, so they kind of abroad a level our mission is to connect any broker and any insurer so they can trade risks without friction. So, that's the kind of longer-term mission we're working towards. In the shorter term, we've realised there's a kind of opportunity to help the London market in particular, be able to sort of trade more efficiently and out for that capacity out around the world in a more efficient manner. The whole smart-follow market has been on a massive period of growth structure in the last few years, and that must be a nice tailwind. It always nice to have a tailwind behind you, I suppose, in my role at Emma Samlin. We were looking at that tailwind, which started, I always think, with Bach's Halfway and the Aeon, sort of sidecar back in 2013, saying, "This thing's going to kind of really run, and I was working on a lot of projects around data at the time at Samlin. I realised data's only getting better and better from the brokers, and that's going to mean that larger and larger portfolios will be able to trade it in a block basis. I was lucky to see that tailwind maybe earlier than some other people, and I think there were some challenges going through the last soft market where kind of ACT had to be restructured, but you could see on the back of that, these structures would come out with often big opportunities, and I think that's what the market has really jumped on, and it's been fantastic to see businesses like QB and Beasley really build out kind of franchises in that space. And how was the start-up process? Must have been stressful and exciting? Yeah, I don't say to my wife, don't start off a company if you don't want to have a little bit of stress. The highs are higher, probably the lows are lower, but it's been a fantastic idea, we've been doing it for four years, we've now got about 40 people, and we've got some rule momentum behind the business. It's really exciting to see that we've created a business that's part technology, part insurance, and to kind of get that working really well together, it's really exciting. Was the whole COVID and contributory factor at all in terms of digital trading in the market? On a personal level, I saw COVID and went, wow, this is going to completely change how the market, which has always been a face-to-face market, we're sharing a hat-to-to-trade remotely or digitally. What I realised is that the market was doing that, it didn't really have the right tools, so it'd almost gone backwards, it'd become less efficient, and so I had been really working and sort of noodling away on this idea, and then COVID happened, I went, "I've got to go and do this," but trying to launch a business in COVID was a horrendous type to that, so I sort of worked away, and then as COVID dropped away, that's when I quit my role at MS Amnin, and decided to set up insurance with my business partner, Williles. Imagine I'm an insurer thinking about deploying some smartphone capacity. What's the pitch for insurance? So it's a really nice pitch in that we can help you win new business in a softening market. People are looking for profitable growth. We can open that up and allow insurers to work with their broken palms to do that. We also actually allow them to reduce their cost, so trading sort of 10 million GWP through us is a lot more efficient than it would be doing with a sort of traditional more open market approach, so we sort of help them win new business and we actually reduce their cost. Third benefit, I think it's going to be a real kicker, it's really going to build out the next couple of years is the data. So we're producing really high quality data and sharing that with our partners. We share that data with our broken and insured partners and I think that will then encourage me more trading on the back of that because you can use that data to build better algorithmic appetite and feed that back into this type of trading. And a lot of the structures which you're setting up is quite often class of business specific. Yeah so smart trading I think they can sort of roughly be four as sort of broken ed structures and insural ed structures. And then you might have sort of single class structures or sort of stuff that's involved in one particular class or more on a multi-class basis. The trackers that you've seen from AMCline Treaty or kind of the equivalence at Marshall Willis they are more cross class whereas we're seeing some applications for this technology in particular classes. So we've done a lot in property and we've done quite a lot in the sort of contingency market. We recently launched into the marine market and the marine whole market and we're about to sort of do a major launch into the construction market. So we actually think by focusing on particular classes you can then really customize the technology, get the data working really well and almost create a better product. So that's how we're rolling out the technology. And when you're speaking with insurers is it often portfolio solutions type teams or class of business underwriters as well a bit of both. It's a bit of both historically we kind of really focus on the portfolio solutions teams and partly that was because they'd already seen the like they were saying if you give us data we'd like to trade in this new manner. But I'd say over the last kind of 12 months we've really started to ramp up what we're doing with open market teams and probably most of our near-term growth is going to be with those open market teams who can say tough let we know what our appetite is. We just don't have the technology to express it to the brokers. Can you help us and the great news is we've got kind of proven technology now that it's trading in 75% of Lloyd's classes. It's kind of ready to go. So does it feel like more people in the market are seeing the lights beyond those kind of individual teams? I think they are. It's always what causes people to see the light but I think the softening market forces everyone to think a bit more creatively about how their business models are successful. When it's a super hard market kind of everyone makes money as the market gets a bit softer you need to think what's your strategy to win. I think art or technology because it's allowing people to win new business because it's taking out costs and giving better data there's a lot of people who are going that's something that I would like to be doing and so they're kind of ramping up what they're doing. You work with brokers as well. What's the pitch for that side of the market? So with brokers, I suppose brokers are at a very very basic level. They care about sort of winning more business in. They want to sort of service their current clients and you know retain them and hopefully win new clients. We think that's super important so we can find applications that our technology helps do that. That's really useful. You know brokers they like making money so they anything they can do to increase how much they can make out of that same flow. They're very interested in doing they can sort of package new products and services. Think about data on the back of that. They're really keen to do that. So thinking about how you can allow brokers to do additional things on top of that flow. And then finally they're also looking at costs. They're going got a lot of people pushing whether it's PayPal to need emails around or just generally trading in that kind of analog unstructured manner. And they're going to the future is digital and we're seeing our broker partners heavily invest in workbenches. You guys have been covering that quite a lot. So we're seeing heavy particularly the big brokers really investing in those workbenches. And I think they're now looking going well how do we plug those in with the insurers and there's quite a lot of insurers subscribing ahead. How do we do that? And again, I think that's an area where insurance is technology is perfectly kind of positioned to plug into both of them and help both sides. Is it a challenge you see that insurers and brokers are developing proprietary technology themselves or actually I think it's fantastic. The more people that want to trade in more technology enable manner the better the insurers. We have to build differentiator technology if people can build it in house. Better than we can. They absolutely should. I think the advantage we have is because we're not owned by a broker or not owned by insurer. We can work with multiple different parties and that allows us to build that technology once and then partner up with those multiple different parties. Thank you. Agnostic in the value chain. Yeah, we sort of talk about our independence as a real key differentiator. We can look everyone in the I&T. We are completely independent. You are the client and we can build something that's kind of useful for you. That allows us to build that one technology and share it with multiple parties. You talked about the soft market and the opportunity to cost three underwriting in this manner. The other tension which we foresee might emerge as pricing becomes more marginal. People are more oversight of how their diploma and their capacity may be more reluctance to follow automatically, historically sometimes some of these big facilities. People have their fingers burned. Do you see attention emerging then? There's two sides of the argument. There's definitely that sort of people delegate and they don't have the oversight and then things go wrong and then that's what makes the next hard market happen. What I think is generally different this time is there is this technology available and that means people can actually put in place more efficient structures that actually take costs out and yet still allow the insurers to have full underwriting control. I think the real danger is if the underwriters don't use that underwriting control bad things will happen and I suspect that will happen and that will cause the next hard market. So we spend a lot of our time actually trying to work real partners, trying to educate them on how to exercise that underwriting control so they really are aware of what they're doing, how they're setting the appetite and so then they're empowered to make those decisions. In theory, using technology to cut costs is a benefit whatever points of the cycle that you're in. We can't open a newspaper or anything nowadays without reading about artificial intelligence, how it's changing the world and the insurance market as well. Are you using a lot of AI in your day to day? Yeah, I mean I think both for insurers as a business we use it to make all our teams, whether they're software engineering teams or our commercial team, more effective, we're using AI in a various aspect. So that's just kind of increasing our own productivity as a business that allows 40 person business to probably do what 120 person business could do five years ago. So that's an enormous boost. But actually for Roman technical perspective, we're using it in the platform. So we've got it integrated. We're using it to structure data and there's one of the fantastic use cases of AI is taking kind of unstructured data and turning it into a more structured format and that sort of has been a perennial problem for the insurance market. There's so much a bit data sort of out there, but it's actually turning into something that's kind of usable. So that's sort of deeply embedded into it. Has that been a big reason change since you launched? Yeah, I sort of talked about it. When we launched five years ago, AI was very much on the horizon. There was a nice idea, but it wasn't making real impact whereas in the last 12 months, it's completely changed how we can operate as a business. I think it was maybe 2022 or 23, the GPT launch, wasn't it? And that's kind of the day zero for AI. Yeah, that was for day zero when people woke up and went, wow, this thing's actually really pretty powerful. But I think what's actually happened in the last 12 months has then been that one kind of steroids. And what we're saying, we use a lot of Claude internally is now really impacting. It's no longer asking a fun question that's a bit better version of Google. It's kind of this is actually completely changing how we can operate as a business. You're over five years now and you're up to 40 people, beyond startup mode now. What's next on the horizon as you look for your next phase of growth? I think we always want to maintain that kind of startup mindset. But what we're kind of really looking at is that growth into working with open market teams and actually really allowing them to go, this isn't just technology for portfolio solutions. It's sort of how does Leeds get involved in this as well. We're doing that in the construction market where we'll be helping Leeds as well as followers trade capacity. And I think it's also about thinking about integrations. So at the moment, we have relatively light touch integrations with our broken insurer partners. We're aware the brokers over the next kind of 12 months are really keen to get the kind of return out of their workbench of investments. And so we're going to be looking to do a lot of integrations there. Equally, we're kind of looking to have the similar sort of conversations on the insurer side. Is it a harder lift trying to speak with the leaders as opposed to the followers? Leaders are sort of like, what's in it for me? And I think traditionally, or let's say over the last couple of years, we've probably had a bit less chance of them. We've had things like our A-Trims Mark and Sortium, which has been a very, very powerful tool for some of our A-Trims. It's given them real relevance in the market. It's been a thing extreme for them. But we've traditionally had less to do for them, whereas I think now we are actually having a direct conversation with leaders saying, look, how can we help you win new business and you wouldn't have been able to serve us before? And that's a really exciting conversation to have. And I suspect the kind of next evolution on that is actually, how can we help use our technology to host their view on pricing and actually articulate that to the brokers as well. And so we're kind of even coming in extension of how the leader operates. I think that's the direction of travel. We're not quite there. Do you eventually aspire to grow beyond the London market? Yeah, we're actually already trading outside the London market. So, for partnership, we have a galaxy facility that we're helping to power. And that's South American brokers actually directly accessing London market capacity. And so we're already doing that today. You know, I can definitely see a world in which our technology is being used between South American brokers and South American insurers. Right now, I think we're going to focus a lot on how to help the London market sort of export its products around the world. That's where we got this kind of real momentum. But there's definitely a use case of our technology more broadly. Historically, the London market has gained a reputation of not being particularly receptive to new technologies. Maybe the pipeway is certain, you know, something we're saying. It's full of lovedites walking around with quills, achieves of paper. Do you think that is deserved or has your experience been different? I think that the London markets are almost very strong-willed, almost kind of very capitalist. So, unless you kind of show the London market how the technology is going to help it, it kind of doesn't care. If you can start working with people and showing actually this technology can actually really help you be more successful, then people adopt very quickly. That's certainly been our experience in the last couple of years. So, we're really looking for those use cases. I think London is generally head versus the rest of the world as a sort of marketplace trade capacity. You know, London's always been the sort of slightly unique insurance market that does kind of collaborate as well as compete against each other versus other markets in the world. And I think that puts in a better position. I structurally think that this technology will be used by few firms to really concentrate flow. And in doing that, the London market's really well positioned. So my sense is that over the next decade or so, we're going to see a lot more flow into the kind of wholesale market. And I think that a lot more that will come into probably London wholesale, maybe versus other wholesale markets around the world. So I think London's really well set up to be a kind of net gain out of this technology. It's for the London market to lose a head side that it's got. And have you been involved much in the broader insure tech community and ecosystem in London? We're super lucky to be able to build this business in London. Most tech businesses, you have to take a business immediately to America to get kind of the biggest market in the world. Whereas in London, we have got that. So there's a brilliant insure tech kind of community. Lloyd's the Lloyd's Lab, done a fantastic job of incubating that. We came out of the Lloyd's Lab a few years ago and we were kind of based there for quite a long time. So there is a really good ecosystem building up. There's kind of now more knowledgeable investors understand the space a bit more. The more that ecosystem builds and again, the more the technology will support the insurers and the brokers operating within it. How was that experience in the Lloyd's Lab? Did you gain from it? It's a fantastic to have that direct connectivity with the market. We got paired up with fundamentals from both the brokers and the insurers. So you get that kind of engagement and really what that allows you to do is we came into it with some ideas of we think that this technology could be using this way. And then we had a bunch of people say actually this is how we want to use it. And so it very quickly allows you to kind of iterate on your product development and get something that's actually really useful for the market and not just a kind of a useful idea and fear. And what are you most excited about for the rest of 2026 for insurers? I think it's that going into the open market. We're doing this major launch in construction. We think there's also going to be big applications for that in the property market as well. We're looking to help our partners win a lot more middle market business in, traditionally, the market sort of struggles the service. We can do that successfully, even in a softening market. We can help people win profitable business. That'll be a great outcome. Oh, Gilbert, I've really enjoyed speaking today. Thank you very much for coming on the show. That's absolutely pleasure. That's all for this episode of Behind the Headlines. We'll be back again in two weeks time. [BLANK_AUDIO]