Insurance group Howden is to launch a new innovation hub amid warnings that the insurance industry requires a new approach to ensure it remains relevant to clients.
Howden Ventures will be backed by £500 million of delegated underwriting capacity, to create an investment and risk incubator that will fast-track insurance product development.
The company said Howden Ventures will draw expertise and resources from specialist innovation teams across the global insurance market. The platform includes what Howden said is a world-first delegated underwriting authority, backed by leading Lloyd’s underwriters, including Tokio Marine Kiln, Chaucer, and Liberty Specialty Markets that provides £500 million of syndicated underwriting capacity to support the development of new insurance solutions.
As new funding for the global insurtech sector continues to fall following the collapse of Silicon Valley Bank, Howden Ventures has initially committed £10 million of new funding to the sector, with a view to support at least five new startups over the next two years.
“By bringing together funding, underwriting capital, expertise, governance and distribution all in one place for the first time, Howden Ventures will create an end-to-end platform and commercial solution that accelerates new product development and insurance innovation,” the company explained. “As the UK government moves forward with its planned Solvency II reforms, Howden Ventures will help bring these policy priorities to life by developing innovation in the insurance sector and helping improve the sector’s social impact.”
David Howden, (pic) CEO, Howden added: “MGAs are the innovation dynamite of the insurance industry. Cyber insurance, insurance for renewables, D&O insurance… they were all born in the MGA marketplace where capital meets innovative and entrepreneurial talent and capacity providers can be part of critical R&D that clients are crying out for by sharing the risk.
“I always say that the insurance industry needs to remain relevant to its clients and that is Howden Ventures’ job: to supercharge innovation by bringing great talent and quality capacity together with a turnkey platform to solve the big problems.”
The launch came as Howden Ventures announced it has concluded its first investment in CetoAI, a maritime technology company combining data analytics, engineering excellence and artificial intelligence to manage machinery breakdown risk in global shipping with predictive maintenance.
With Howden’s investment, CetoAI’s suite of solutions will allow ship owners, operators and insurers to use live data to reduce machinery breakdowns, increase vessel utilisation rates, understand operational risk in more detail and reduce performance related emissions, aiding the transition to the low carbon economy.
Daniel Whiteside, global head of marine, Howden added: “Our investment in CetoAI is the perfect example of the power of insurance to drive market innovation and the development of new products that address climate risk and resilience. With Howden’s support, CetoAI can draw upon the best minds and expertise that the specialty insurance market has to offer as it solves some of the greatest challenges facing the maritime industry.”