Meet a Black Insurance MGA: Russell English, Assumarisk SAS France
Insurance is a competitive business, costs of distribution, administration and pricing adjustments are all areas that everyone in the insurance chain can have a direct influence on. Constraints imposed by laws and regulations are factors in the equation that cannot be ignored.
1. Tell us a bit about yourself — what kind of business your are in today and some interesting and/or fun fact(s) about you are also welcome
In the context of my interest in BLACK I am a co-owner of a small to medium sized French insurance group including a retail broker and a wholesale MGA within the EU. Our product lines are specialist and are sold to businesses rather than individual consumers. My background is one of starting out as a specialist consulting engineer before entering the successive worlds of reinsurance, insurance, a Lloyd’s Syndicate and now that of the MGA. Initially I went into reinsurance giving it a 6-month trial period, I found it fascinating and am still enjoying it 40 years later.
2. In your opinion, what are the greatest constraints and issues in insurance business today?
Insurance is a competitive business, costs of distribution, administration and pricing adjustments are all areas that everyone in the insurance chain can have a direct influence on. Constraints imposed by laws and regulations are factors in the equation that cannot be ignored.
The Insurance broker is close to his client base. He is alive to any mis-match between what insurers offer and what his clients need. He is a source of ideas in how to correct this. The broker is constrained in that any changes to product scope are often slow at best to get approved. Once approved it is then given to all competing brokers eliminating any edge that the originating broker would have had.
The MGA or holder of one or more delegated authorities from insurers is acting for those insurers as their agent. Survival depends on providing value added services to clients and producing a profitable portfolio to their principal, be it insurance company or Lloyd’s or a PCC. A significant share of the risk bearing capital could well be provided by a reinsurer behind any one of these. To achieve these the MGA develops best in the more complex or non-standard areas of insurance. The biggest constraints are those of cost and the need to provide full information and monies as quickly as the supporting insurer needs to fulfil the more demanding regulatory control and reporting requirements.
What are the main benefits/values of cryptocurrency and blockhain from your perspective?
From the perspective of both the underwriting agency Assumarisk SAS and the retail broker Smart Courtage SAS, the potential advantages of blockchain and cryptocurrency are cost savings, transparency, the speed of transmission of documentation and cash or cash equivalents.
Stability in cryptocurrency conversion rates and the credit worthiness of the system once achieved and accepted by Regulators, at least in the EU, will create the necessary new dynamic to fully develop these initiatives forward.
3. What other ICOs you have been taking part of?
I haven’t
4. How did you first learn about Black?
Mart Parve sent us an email about Black Insurance, we looked into the concept and followed up with Mart.
5. What makes you believe in BLACK business model?
Any insurance broker, with a profitable stable portfolio, could conceptually use the Black business model as a potential route to participating in and creating risk bearing capital. This could provide a greater control in servicing their client base in a number of different ways.
For an MGA, such as our own, the principle of being more in control of your business is very attractive indeed. The potential to be able to participate in the risk bearing capital supporting what we do is equally as attractive. The Black business model provides for this possibility. In the past such owners transformed their agencies into insurance companies, however today the relatively high capital investment needed precludes this for many. With this model a lower capital threshold is necessary and provides for an equivalent way forward either on a stand-alone basis or as a PCC or even a syndicate at Lloyd’s.
The insurance industry is vast and different solutions for different situations will be required. To my knowledge Black is attempting to become the first or one of the first entirely blockchain/cryptocurrency insurance networks in tandem with matching risk bearing capital to specific insurance portfolios. It opens avenues for new forms of risk bearing capital with the potential to create some fascinating opportunities.
Scale is important, in that a small to medium sized insurance company, syndicate at Lloyd’s or cell of a PCC needs reinsurance with a financially sound reinsurer. The role of reinsurance in these circumstances is compatible with the Black business model.
There are practical and regulatory issues. With innovation and working with Regulators and established insurance entities we are confident that they will be surmounted and are following your progress with interest.
6. What are your expectations and future visions on insurance on blockchain in the broader sense?
It is just a question of time before it becomes commonplace over the whole spectrum of insurance and reinsurance.
7. What other trends or developments in insurtech you are keeping your eye on?
My interest otherwise is that of the layman looking superficially at developments in technology, AI and software for implications on current software development and future staffing needs for our group.
8. Is there something else you would like to add/comment from your side?
Yes, that these comments are limited to those of an insurance broker and MGA looking at the Black insurance business model.
