Originally starting her innovation work at Liberty Specialty Markets, Hayley now leads the innovation vertical within the Apollo ibott Syndicate 1971. Through this, Apollo provides insurance and reinsurance capacity to support new and innovative products. To do so, it makes use of the Lloyd’s ICX allowance.
ICX — supporting innovation at Lloyd’s
ICX is a class of business at Lloyd’s. It allows syndicates to use an additional 2% of its Syndicate Business Forecast GWP for innovation. Lloyd’s started the initiative a few years ago, at a similar time to the launch of the Lloyd’s Lab. The aim of these initiatives has been to foster more innovation within the market.
Whilst Lloyd’s provides some guidelines for ICX, it does not strictly define ‘innovation’. This means that it can be used to support new products, distribution or data for underwriting. For example, a syndicate could use the allowance to explore algorithmic underwriting or innovation within the claims process.
For Apollo, specifically within ibott Synidcate 1971, the ICX allowance is used exclusively for new products, with the aim to fill existing protection gaps. Hayley explained:
The benefit of trialing new products through ICX is that syndicates don’t necessarily have to provide additional capital for the central Lloyd’s fund. If the product doesn’t go well, the loss isn’t felt across other lines of business. This makes it a great way to test truly new insurance products.
Innovation at Apollo
Hayley went on to explain how Apollo approaches innovation:
“We’re looking to change existing products that are not fit for purpose, or to create new products for clients with unmet needs.”
Whilst Apollo supports MGAs looking for capacity, its innovation vertical also focuses on creating new products in-house. If it sees enough interest from clients within a certain area, it will work to bring a new product to market.
“A good example is autonomous vehicles. We were hearing a lot of conversations about risk exposure — people were asking if the focus was motor, cyber or product liability. We decided to create an autonomous vehicle liability product that wrapped all of these pieces together.”
Creating a consortium
Despite the availability of the ICX allowance, a lot of Lloyd’s syndicates have not been using it. Hayley believes that this is due to innovation barriers within these organisations.
“Whilst some syndicates might not know they have this allowance, a lot do but still aren’t able to make use of it. It can be difficult to do so when innovation isn’t a key part of the organisation’s culture or the internal resources just aren’t available.
“Although Apollo had been using the ICX allowance for a while, we found that our clients needed more capacity than we could give them. Syndicate 1971 is relatively small, so the 2% for innovative business began to be limiting.
“To tackle these issues, we created our ICX Consortium.”
Through the consortium, Apollo can underwrite ICX business on behalf of other syndicates. For 2024, the consortium allows for $40 million in premiums to be underwritten with an $18 million limit per risk.
A mechanism for new products
Having this mechanism to support the development of new products has been beneficial to both brokers and end clients. Apollo is able to create products that meet the underserved needs of clients far more quickly. It also removes the need for brokers to go through governance processes with multiple insurers. The ICX Consortium provides much quicker access to capacity for risks that would previously be very difficult to place.
Hayley notes that ICX is also particularly beneficial for companies coming through the Lloyd’s Lab:
“If a mentor has really bought into a startup’s product, the next logical step is to use its syndicate’s ICX capacity to take them out of the Lloyd’s Lab and onto the next phase.”
Apollo’s innovation focus
Since Apollo launched its ICX Consortium a year ago, it has been focused on six key areas for new products. This includes parametric, embedded, usage-based solutions, new mobility, intellectual property and insurtech.
Within the ‘insurtech’ category, Apollo is looking to support MGAs or other organisations that have deep expertise or data within a particular area. All of the companies that fall within this category have to have an ESG angle — by this, Apollo means to support insurance products that are doing something “inherently good”.
Over the last 12 months, Apollo has launched eight new products under ICX. This includes usage-based product liability insurance for eCommerce business owners, launched through MGA Assureful, and a pay-per-kilometre motor product, launched with Australian MGA KOBA.
One of Apollo’s latest products to launch is JustParent. It is a parental leave insurance product, aimed at SMEs in the UK. It allows these businesses to offer enhanced parental leave to both mothers and fathers. JustParent’s coverage pays the full basic salary of staff on parental leave above an agreed excess.
The product aims to help SMEs attract the best talent through offering competitive parental leave. It also aims to show prospective employees, especially women, that they won’t be discriminated against in the hiring process. Hayley adds:
“The product is only a few months old, so there’s still a lot of learning to be done — but we’re excited to see where it goes. We’ll also be keen to explore if there are any adjacent products that we can create off the back of it.”
Bridging protection gaps of the future
Hayley went on to explain what Apollo will look for when creating new products over the coming years.
We don’t want to create products that don’t provide value — we want to bridge true insurance gaps. This means not building insurance add-ons we think are important and then wondering why they don’t sell. We want to meet the real needs of clients.
Whilst Hayley highlighted the client-driven nature of Apollo’s product building, she mentioned a few key areas that they are likely to focus on in the future. The first is autonomy, which is a space Apollo is already active in. This includes not just robo taxis, but wider use cases within areas such as agriculture and mining.
Apollo also sees potential for insuring AI-related risks. These risks are mostly silent in existing policies, but soon insurers will likely exclude them within existing coverage, leaving protection gaps. Hayley notes:
“We need to build fit-for-purpose products now, rather than wait for the risk to happen.”
Apollo also sees potential within the carbon credit insurance space. It will be building out its strategy for this over the rest of 2024.
How to be a good innovation partner
Apollo is looking to connect with insurtechs, brokers and potential clients to help develop and launch new insurance products.
When it comes to insurtech partnerships, Apollo wants these relationships to be open and sustainable.
“Transparency is really important to us,” highlights Hayley. “We need data to be shared openly to enable innovation. With embedded and usage-based products, for example, data needs to be monitored and reviewed on a monthly basis. The partners we work with need to be willing to share this information and to make any necessary tweaks to the product.”
“At Apollo, we take a long time to ensure a product is right before we launch it. We have a dedicated innovation team, so we need our products and partnerships to be sustainable. We don’t follow the ‘fail fast’ mentality — we want the relationships and products that we back to be successful, and this can take time.”
Hayley encouraged those who may be interested in partnering with Apollo to reach out:
“We’re always looking for new partnerships. We’ll also be building out capacity for our ICX Consortium in 2025 — we’d love to hear from anyone who isn’t yet using their allowance and would like to learn more.”
