by Greg Boutin, CEO of Relay
People often ask us if Relay is meant to disintermediate (re)insurance brokers. It makes me chuckle every time, based on what I have observed in the industry so far, and how we came up with the idea for Relay.
The risk-placement function is a specialised one. Many insurance carriers have created specialised “ceding” functions for reinsurance, but have yet to displace the brokers themselves. In fact, we see a counter-trend at play for “reintermediation”, which Relay is more in favour of, by allowing brokers to move deeper “inland” into their client operations, to optimise and package previously unsupported placements.
Relay helps brokers structure placements at their origins alongside their clients, animating the whole value chain to work more collaboratively. Brokers, alongside ceding departments where they exist, are the natural users of Relay.
We first conceptualised Relay, then called Parachute, as a placement tool to “tech-enable” brokers. While I ran with the idea, I have to give credit to our investor – Highline Beta’s Ben Yoskovitz, who co-authored Lean Analytics – for suggesting it.
Equipped with Ben’s idea, our next step was to speak with brokers themselves. They told us that until we had an actual product and some of their clients on board, they weren’t interested. Brokers are not tech ventures, they said, and they have little time to play with product concepts.
So we followed their advice. We built the best platform in the market for fac reinsurance, for both cedents and reinsurers first. We made it visual, fast, and easy to sign up for online – which apparently no other platform had done until then.
We quickly expanded this platform to B2B insurance placements, and enroled insurance brokers. We took an investment from NFP Ventures, the VC arm of US brokerage NFP. And we finished our broker module for both fac and insurance, with help from NFP and other brokers.
We are now expanding Relay to reinsurance brokers, as well as Programs (in the US sense of the word, i.e. MGA/MGU/TPAs) and Treaty – both of which companies can already pre-sign on to and experience. We think having all risk transfers in one engine will be revolutionary, and we are rapidly proving it.
Along the way, I learned a few things that are relevant to brokers:
Recommendation #1: embrace technology specialists to expand your brokerage’s reach. You will save time and money by working more effectively with insurtech ventures (such as ours).
Many brokers are more worried about disintermediation than they should be, if experiences in fintech or real estate are any guide. This insecurity can drive defensive behaviours, including a lot of money spent on internal platform builds. While internal platforms are sold by their proponents as the only way to achieve control, we have proved that Relay can have brokers digitise faster, better and cheaper while integrating with other systems and retaining control, through our new white-labeled or co-labeled solutions.
Recommendation #2: do not embark into multi-year transformations, but favour agile solutions that will adapt to rapidly changing conditions. Correspondingly, identify internal change agents who are inherently incentivised for tangible results and make them transformation leaders and champions.
Brokers are not a uniform bunch. Even within the same brokerages, we find pockets of progressive brokers who understand that in the 21st century, speed and agility will drive more business than focusing on control and creating more siloes. Find those practitioners and put them in charge, supported by the right external technology partners. Avoid establishing permanent internal transformation roles, rewarded for building the longest, largest initiative possible, and often moving to a new role during the project.
Recommendation #3: broaden your talent pool, and welcome inputs from non-traditional industries and backgrounds.
While brokers are not a uniform group, they lack diversity, just like (re)insurance in general. And that certainly impacts creativity, as countless studies have shown. Hire with a view to greater balance in gender, cultures, ethnic backgrounds and sexual orientation, among others. Don’t just open your systems, open up your mindsets and entire organisations.
Major opportunities are being lost right now by brokerages both large and small, to adapt to changing conditions. Pick bold partners, and go for rapid changes, even if some mistakes are made along the way – innovation rewards those, but not regrets.
I’d very much welcome your perspective – reach me at email@example.com