Can Mustard’s model change how the shared economy engages with insurers?
Can Mustard’s model change how the shared economy engages with insurers? | Insurance Business Australia
Technology
Can Mustard’s model change how the shared economy engages with insurers?
“A contract of insurance should be a true partnership,” says CEO
Technology
By
Daniel Wood
In April, a new Australian MGA launched, offering public and products liability insurance and backed by a Lloyd’s syndicate. Mustard’s coverage is aimed at companies operating in the shared economy, including ride sharing, delivery services and creative and professional services.
However, this agency’s novelty could be what it calls its Risk Enhancement Fund (REF). According to Mustard’s website, this model, “will change how the digital marketplace engages with insurers in the future.”
CEO Stuart Byars (pictured above), told Insurance Business that he hopes the digital marketplace sees a business relationship with Mustard as “a true partnership” because his firm is “vested in” helping them manage risk better.
Risk managing like a football referee
“Our REF model supports the notion that a contract of insurance should be a true partnership where the risk taker looks to support the risk by creating an environment that delivers year on year improvements to the exposure,” said Byars.
He said this model is based on providing coverages for “seasoned operators” rather than startups.
“This allows us to look at the risk long term and enables us to allocate a percentage of our earnings to support the insured by designing a risk management framework that sets out a plan of how we collectively look at improving our partners business exposures,” said Byars.
He said year on year “engagement and support” should see “vast improvements” in risk management and better results in a company’s loss history.
“We genuinely see us a bit like a ‘ref’ on a football pitch, making sure the rules of engagement are understood and the outcome and decisions are seen as beneficial to all partners,” said Byars.
The origins of an insurance proposition for the shared economy
The Mustard CEO said his agency’s focus on the shared economy was the result of working on a consulting engagement with a leading p2p platform to resolve their insurance needs.
“We quickly worked out that the industry was under-serviced, the solutions they had were not necessarily fit-for-purpose and the size and growth in this category was huge,” said Byars. “Coupled with the fact that no one provider catered holistically for this segment and, in a lot of instances, the target platforms have global reach.”
He said brokers will play an important role in an agency’s REF offering.
“Brokers already play an important role in finding solutions for sharing economy businesses,” said Byars. “We need to work with brokers to offer more tailored, relevant and holistic solutions to their clients.”
Underwriters with novel offerings and digital upgrades
Despite the current economic challenges, some of Australia’s underwriting agencies continue to offer new options for the insurance sector and customers.
“The concept of Rhodian is around building a platform that allows people to come in to incubate and start their agency with all that structure and support, including finance, compliance, HR, marketing and tech,” CEO Simon Lightbody told IB.
Despite the insurance industry’s sometimes unfair reputation as relatively slow to adopt new technologies, some agencies are also keeping up with the leading edge of technological change.
Late last year, GT Insurance, an underwriting agency specialising in transport coverages, completed the replacement of its entire digital infrastructure.
Dodd successfully argued that the best approach was to replace the entire system in one go rather than in a piecemeal fashion.
“To rip the band-aid off and go in one foul swoop, while it appeared on the surface to be a significantly risky approach, the longer-term benefit of being able to move in a far more agile process made it worthwhile,” he said.
Are you an underwriter? What novel offerings has you firm come up with lately? Please tell us below
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