Pushing Boundaries and Fostering Innovation – A Unified Approach

12th April 2024

In the ever-evolving landscape of the insurance market, Davies has a long-standing reputation for driving innovation, challenging the conventional, and creating new opportunities for growth.

The strategic acquisition of Asta in 2022 significantly enhanced Davies’ offerings, bringing into the fold a partner with an unrivalled reputation for creating and managing underwriting businesses, including  in the Lloyd’s market. This synergy between Davies and Asta has not only solidified their position as industry leaders but also underscored their commitment to supporting clients through every stage of growth.

This commitment to leading market trends and pioneering new initiatives was vividly brought back to me at the World Captive Forum last month. Supported once again by Davies Group as a platinum sponsor, I had the privilege of attending and presenting at the forum, which not only highlighted the sector’s growth in 2023, but was a vibrant platform for exchanging insights and discussing new ideas.

The shift toward captives, driven by rising insurance rates, has positioned them as an attractive, cost-saving alternative for many. The fronting markets’ readiness to embrace new kinds of risks, including employers’ liability and cyber threats, has widened captives appeal beyond the large corporations to small businesses looking for effective risk management solutions. The high attendance and the many conversations our Bermuda Captive Management team had with delegates, reflected the increasing attraction of captives across the spectrum of business sizes.

A key focus of my presentation was on the innovative Lloyd’s captive syndicate initiative. This enables companies to create their own captive syndicates within Lloyd’s, which is particularly beneficial for businesses dealing with risks in multiple jurisdictions. Asta was at the forefront of designing the framework with Lloyd’s for the captive syndicate and our focus now is on educating businesses about this opportunity and providing the necessary support for those keen on exploring it. My discussions in Orlando revolved around the advantages and the setup process for a Lloyd’s captive syndicate, and there was strong interest from the delegates I spoke to. Despite the framework being in place, the anticipation for the first launch is palpable. Lloyd’s has kept a low profile about the scheme, but I anticipate that interest will surge once the first captive syndicate makes it over the line.

The Syndicate-in-a-Box (SIAB) initiative, now in its fourth year, further highlights Asta’s proactive approach to innovation. I was seconded to a project team at Lloyd’s to examine how we could increase access to the market. The result was the now established SIAB model, designed to bring new capacity and risks not traditionally underwritten at Lloyd’s, and which has fundamentally changed the entry process for new entrants with unique underwriting propositions in niche or emerging markets. By offering a streamlined approval process, reduced regulatory oversight, and lower operational costs, we’ve made it easier for these innovative ideas to find a home in the Lloyd’s market, with Asta looking after them as Managing Agent.

Reflecting on the SIAB initiative’s journey, it’s clear that it has lived up to its promise. Our strategy has always been to carefully select opportunities that not only align with Lloyd’s appetite but are also areas where we believe we can provide substantial support. A prime example of this approach is evident in the six SIABs we currently manage, including Carbon syndicate 4747 which began as a MGA with Davies. With Asta’s support, Carbon established its SIAB in 2020 and after a successful start-up phase, graduated to become a full syndicate in 2023. This illustrates the SIAB model’s role as a vital stepping stone for smaller underwriting businesses aspiring towards growth in Lloyd’s.

The effectiveness of the SIAB model was further highlighted in January this year with the launch of Oka Syndicate 1922, which aims to bring innovative carbon credit coverage to the market. By leveraging the SIAB model, Oka Syndicate was able to swiftly access Lloyd’s with significant premium capacity, demonstrating the model’s effectiveness in facilitating market entry for specialised risks. More recently, the in-principle approval of MCI Syndicate 1966 marks another exciting development. This syndicate-in-a-box introduces a new insurance product for clinical trial funding, accelerating the development of new therapeutic drugs and again illustrating the SIAB model’s capacity to support innovation and contribute positively to the Lloyd’s market.

The continued operation and success of the SIABs under our management underscore the initiative’s viability. It also speaks volumes for the work that Asta has done across the Lloyd’s market that we were asked to be part of its creation and I take a great deal of pride in the support we’ve provided to clients in setting up their SIAB, and enabling them to realise their ambitions.

Looking ahead, I’m excited about the combined opportunities for Davies and Asta in 2024 and beyond. Our commitment to innovation aligns with our strategic vision to ensure the insurance sector remains vibrant, responsive, and capable of embracing the complexities of the global risk landscape.

If you would like to continue the conversation, get in touch with Business Development Director, Keith Nevett at k.nevett@asta-uk.com

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