Nick Wright: Chief Business Development Officer, Pen Underwriting: Every problem has a solution

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The Managing General Agent (MGA) model has become a successful way for many insurtech startups to establish themselves, but the subject of this week’s podcast is a bit different to other MGAs in the marketplace.

Pen Underwriting was created by bringing together 12 companies in 2014. Its work covers claims, pricing, and distribution with more than £650 million in gross written premium per year.

Chief Business Development Officer Nick Wright joins Matthew on Podcast 163 to explain how Pen Underwriting supports its partners and why investing in innovation is a key part of the company’s approach.

Talking points include:

  • Advantages of the MGA model
  • Creating products for insurer partners
  • Monitoring the market and looking outside of insurance
  • The growth of parametric and usage-based insurance
  • Using telematics to mitigate risk

More information on Pen Underwriting is available from the company’s InsTech London member profile page.

If you like what you're hearing, please leave us a review on whichever platform you use, or contact Matthew Grant on LinkedIn

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Continuing Professional Development - Learning Objectives

InsTech London is accredited by The Chartered Insurance Institute (CII). By listening to an InsTech London podcast, or reading the accompanying transcript, you can claim up to 0.5 CPD hours towards the CII member CPD scheme.

The Learning Objectives for this podcast are:

  • Identify some of the benefits of innovation in insurance
  • Understand what is unique about MGAs and some of their advantages
  • Determine how telematics can be used to mitigate risk

Let us know you have listened to this podcast by emailing and if your organisation is a member of InsTech London you will receive a quarterly summary of the CPD hours you have earned.

To help us measure the impact of the learning, we would be grateful if you would take a minute to complete a quick feedback survey.

Every problem has a solution - Podcast 163 highlights 

Matthew: Nick, can you describe Pen Underwriting? 

Nick: Pen Underwriting was created back in 2015 by bringing together twelve different underwriting companies acquired by our parent Gallagher, integrating them into one cohesive business and looking for opportunities to grow. When we factor in our recent acquisition of Manchester Underwriting, Pen is now an MGA responsible for more than £650 million of gross written premium.  

As one of the UK’s largest MGAs, Pen is like a ‘mini insurer’ and can do everything an insurer does, such as claims, pricing, distribution, sales and marketing - except carry risk. 

Matthew: How do you define an MGA? 

Nick: MGA means ‘managing general agent’ – we effectively rent capacity and capital from insurers, use this to develop our own range of risk solutions and deploy and distribute that capacity and those solutions via insurance brokers to our end customers. 

One advantage is that MGAs can be nimbler than insurers; they can do things differently and can create new solutions more quickly. So while an insurer generally has only one risk appetite, our 30-40 insurer partners all have different risk appetites, enabling us to create diverse and innovative products which suit them. 

Matthew: What does your role as Chief Business Development Officer involve? 

Nick: In simple terms my role is to make the boat go faster or build a bigger boat. It’s on me to find ways to accelerate the growth of the business. We have spent a lot of time putting the foundations in place, and now aim to double its size over the next five years. That involves investing in opportunities, making strategic hires, increasing our product offering or finding new technology. We are interested in acquisitions that can complement our offering, not replicate it. 

Matthew: What areas of innovation do you find most interesting? 

Nick: App-based customer journeys have already created a huge transformational change and parametric and usage-based insurance are genuinely creating new marketplaces. But it’s all about delivering the right product to the right customer at the right time – and even if that is facilitated through bots or digitalisation, you still need a combination of people and tech. Not one or the other. 

Matthew: Use of telematics is quite advanced in motor insurance now, but what are you seeing elsewhere? 

Nick: Telematics can be used in many ways. Cargo is a great example – you can track it minute by minute, see when it arrives and when a unit has been opened. But it’s also about the insurance industry using tech to mitigate risk, to try and prevent injuries and accidents, or damage to the environment. For example, you can now get high-vis jackets that can be fitted with sensors to alert workers if they are in an unsafe area or about to lift items with the incorrect posture risking injury and therefore help reduce accidents in the workplace. 

Matthew: How do brokers fit into the innovative solutions you are providing? 

Nick: Brokers can sell risk mitigation solutions such as telematics-based driver training to clients directly, or Pen can help them find and apply the right solutions. Either way it results in a better risk to underwrite. Our mantra is that every problem has a potential solution, so that’s what we’re focused on providing. 

Matthew: How does Pen identify these solutions? 

Nick: InsTech London is a great resource and Pen has a team of people actively monitoring new developments in the market. We also have our own innovation forum where any member of staff can bring forward their ideas and suggestions because making sure all employees are invested in innovation future-proofs the business. 

But we also need to look outside insurance and learn from the innovations in other sectors that are more advanced or using tech better. My team and I are presented with many ideas and explore different business models. If it works, we invest. Pen Underwriting will continue to be successful for as long as it invests in people and technology. 

Matthew: What types of coverage are part of your growth plan? 

Nick: Tech sector specialist Tom Dixon has just joined us to lead the development of solutions that respond to the different needs of the fast-growing and fast-evolving technology sector – now such a major contributor to the success of the UK economy. The provision of tailored professional indemnity and supporting insurance covers will be a big growth area. 

And so could offering alternative solutions to existing areas of risk exposure such as a parametric ‘increased cost of working’ insurance, instead of full blown, complex business interruption cover. Something that could pay businesses a set amount of money triggered by specific, pre-defined circumstances, and enable them to move from one premises to another in the event of an incident like a fire or flood. 

Matthew: Any final thoughts? 

Nick: The buying habits of customers are changing. I would like to see innovative approaches that better align these new buying habits with selling habits.