It can be hard winning over an insurer on a not-before-tested product. Insurers love the stability of ‘knowing the numbers’ – especially the interest from customers and the viability of a product.
From providing cover for exotic pets, drone racing, microbreweries to providing public liability insurance for am dram societies there appears to be no end to the diversity of products that insurers could provide as entrepreneurs flex their muscles and venture into so-called unchartered territory.
Top sectors to watch, particularly in London, include tech, fintech, design and creative industries and we’ve seen a number of private equity firms and other strategic investors putting their money in them.
With such interest and backing it’s hardly surprising that there will be many niche spin-off businesses that will be pushing the boundaries. And, as their success escalates, they will be in dire need of insurance to manage their risks and to flourish.
But when it comes to revolutionary niche products it can be difficult to gauge the interest from consumers or businesses that will potentially benefit, especially if there’s no historical data and a mere handful of new entrants.
Many questions will be asked. Can this new venture continue on its successful trajectory? Or is it simply the next ‘Bitcoin’ – full of promise but lacking in substance.
It’s impossible to claim that something is fool-proof, but specialists like SchemeServe can provide insurers with some vital insight before they commit to providing capacity.
If you create the right partnerships, then a case for the new scheme can be built and the benefits highlighted to the insurer. It doesn’t have to be an entirely complex or costly process.
SchemeServe is a software platform that builds quote and buy and back office functionality specifically for weird and wonderful schemes ideas. John Price, the chief operating officer, says that builds can take a matter of weeks and will cost “a pin number”.
“We can put the entire scheme to the insurer so they can see how much traffic is likely to go through it and the kind of claims they might see. The insurer can physically use the site in real time – they can trial it and use it with existing brokers if they want. The conversation about getting capacity then becomes easier,” he says.
The concept is best used for niche schemes ideas where there is little to no experience or historical data to turn to, a common sticking point for a schemes pitch.
That’s not to say that brokers don’t have their own part to play. It’s vital to demonstrate expertise in the niche market you are pitching for. The credibility of the sector, as well as those venturing into it should be demonstrated and regulation should also be considered too.
Competing in the generalist insurance market is difficult when you consider the number of bigger players dominating it, particularly in the car and home insurance market. If you find the right niche, your brokerage could accelerate as much, and as successfully as the niche itself. This is why it’s so vital to partner with the right experts that can help to demonstrate a scheme’s potential as well as its future sustainability.