The Different Shades of Insurance-In-A-Box Solutions

Back in 2007, when the concept of a pre-configured, fully integrated framework for transformation was largely unheard of, Infosys Technologies had launched Finacle Bank-in-a-Box (BIAB), a fully web-enabled application and process stack in a ready to deploy state for three regions – Europe, Middle East and South East Asia. Bank Sohar in Oman had successfully implemented this core banking and treasury solution in a record 56 days. Standard codes like ISO Country/Currency, SWIFT BIC Codes, UCPDC Codes were available in the BIAB and included 300+ process Maps.

In the recent past, insurance-in-a-box (IAAB) has gained traction and we witness developments from diverse market players. While digitally advanced carriers like Chubb have announced ecosystem-friendly IIABs, technology vendors such as WNS have launched core-system shaded IIABs for carriers. Lloyds of London, in its Future of Lloyds roadmap, announced Syndicate-in-a-box (SIAB) as one of its cornerstones. This article attempts to peer under the covers of few prominent solutions.

Chubb Studio is a partner-friendly platform consisting of customizable microsites, mashable widgets and APIs to rapidly deploy embedded insurance products (e.g., small business, personal accident or travel) for customers. Akin to insurtech startups offering embedded products and experiences through channel partners including e-commerce sites, auto dealerships (e.g., DealerPolicy) and travel websites (e.g., Cover Genius), Chubb offers equivalent speed and customer experience.  Sean Ringsted, Chief Digital Officer, says: “Chubb Studio provides significant speed-to-market for our partners.. What once took months can now be accomplished in days. It’s what we call ‘insurance in a box.’”.

Some digital providers are combining the best of worlds: modern technologies, customer engagement, enterprise-scale architecture and BPO. Through Insurance-in-a-Box, WNS helps set up (re)insurance operations from the ground up, executing technology platform deployment, process design and implementation. Designed to deliver with much shorter timeframes, these modular solutions support core operations while delivering Finance & Accounting (F&A), Human Resources (HR), and analytics and technology services. The Convex Group has appointed WNS as its long-term strategic partner to build a unique, integrated, “Platform + BPM as-a-service” proposition. While Convex Group capitalizes on its underwriting and claims management expertise, WNS will provide processing support.

Such solutions offer multiple benefits, key ones being: a) Cost effective alternative to complex core system transformation b) Accelerated approach to integrate and launch new lines of businesses c) Ability to stay current through auto-updates of content and upgrades.

Syndicate in a Box

Lloyd’s has conceptualized syndicate-in-a-box (SiaB) to make it easier for innovative capital to enter its fold, with fewer caveats compared to traditional syndicates. Munich Re Syndicate Ltd was the first company to launch an SiaB. While Lloyds mandates the SiaB to write unique risks, the volume expected is less than £100 million premium, which is the de facto minimum for conventional syndicates. The lower premium requirement minimizes barriers to entry. It also reduces risk to Lloyd’s by limiting exposure to new products bereft of adequate statistical data to support pricing.

A syndicate-in-a-box is designed to incur lower expense ratios compared to conventional syndicates. Despite the apparent constraints, it has benefits over regular syndicates, such as reduced application fees and Lloyd’s support for capital modelling. Where a traditional syndicate might take 1-2 years of build time, an Siab could be operational in three months. It’s worth noting that Siabs lack historic data for their lines due to the novelty and hence, are subject to greater market oversight.

The insurance-in-a-box construct fosters agility and lets carriers and startups focus on their core businesses, without fretting too much about processes and technology implementations. While traditionally the vanguard of technology vendors, it is a sign of the interesting times we live in that a large carrier and a marketplace have adopted similar approaches to streamline business operations of partners and intermediaries.

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