Issues & Answers Special Advertising Section:
July 2021
Noelle Collado
Vice President
E&S/Specialty Programs, Nationwide
“We continue to see many insurtech opportunities and anticipate they will be a growing segment of our portfolio.”
Large brokerage firms acquiring smaller brokers and program managers continue to be a trend in the program space. We are seeing large wholesale brokers looking to diversify revenue streams by investing more heavily in program business. Many segments of program business have been fragmented and in need of consolidation. Brokers recognize that these acquisitions will allow them to scale more quickly and more efficiently. If they leverage their distribution and technology, they can aggregate and monitor the business holistically.
Is consolidation leading to opportunity?M&A in the insurance industry continues to thrive, even after a slight pandemic slowdown. We are certainly seeing program opportunities because of the continued M&A activity. Consolidation causes disruption which puts more programs into the market. As carriers merge you may find overlap within the combined portfolios or you may find that the acquiring company does not have an appetite for program business or a particular line of business. Additionally, M&A is also creating the opportunity for underwriters who do not want to join the merged entity to become displaced and seek out alternative options such as starting an MGA or joining an existing MGA.
How much is technology and insurtech impacting programs?
When considering partnerships with new program managers we prefer partners who have a competitive advantage. Technology is oftentimes a key differentiator identified in the due diligence process when seeking best in class program managers. That technology could be a customer facing platform, a digital footprint that attracts a certain customer base, or real-time data that improves pricing. More startup MGAs today are changing the way we do business and that’s where insurtech comes in. Insurtechs are another way to meet new or developing customer needs. Insurtechs are not only on the forefront of emerging risks, they also are providing traditional products in a differentiated way; whether that’s how they assess risk, package products, or access customers.
What are some of the emerging risks that are catching your eye?
Emerging risks that are of interest to us are ones that have high growth potential. We are already thinking about the aging population and how technology is changing in response to this issue. An example would be telemedicine and developing a product around the platforms that support telemedicine visits. Responding to climate change through both traditional and supplemental products is also an area catching our eye. We started building products in the intellectual property space and will continue to pursue this segment. We continue to discuss evolving ways to manage cyberrisks, insure A.I. and develop products around social responsibility/ESG.