Why success or failure is in the DNA of a digital platform

Aegis London’s head of digital trading Tom Squires on steps insurers can take to be successful when developing digital platforms.

2024 hasn’t been a great year for some insurtechs. First, tech behemoth Amazon shut down its nascent UK insurance business, then a number of other big names reported less-than-stunning results.

By way of contrast, Opal, Aegis London’s modest online quote-and-bind platform, has just reached the milestone of handling $500mn of premium, and is set to launch four new products this year.

How, you might ask, did it all go so right for Aegis London? The answer is: it didn’t. In fact, for a number of years immediately post launch, problems came thick and fast. Technical problems, product problems, supplier problems. At times, our frustration with Opal boiled over. But we kept plugging away.

Now, seven years since launch, we’ve reached what might be called a good place. User numbers continue to grow and Opal is having a significant impact on Aegis London’s bottom line – so much so that, to all intents and purposes, it has changed the shape of our business and its philosophy.

Ten years ago, we were what commentators liked to refer to as “a traditional Lloyd’s syndicate”. We focused on the underwriting room at Lloyd’s and delegated authority arrangements in territories like Canada and the US. But two things were nagging at us. First, a lot of smaller, less complex risks were not coming to the Lloyd’s market. Second, the early wave of insurtechs had opened our eyes to the potential of digital trading. Somewhere, in the hinterland between those two totems, we felt certain, was an opportunity.

Opal, an online quote-and-bind platform offering a range of Aegis London products to coverholders and brokers far from London with distribution costs kept to a minimum, was born out of a proof of concept. This was followed by an intensive six-hour planning session that laid the foundations for the firm’s new digital trading division.

We worked with a technology partner to build a first iteration of the platform, which proved slow and unwieldy. The next two years were spent re-platforming Opal – a tortuous experience I hope never to repeat. Covid struck in 2020 and the new version of the platform was boosted by a tsunami of online activity as face-to-face trading in London was suspended. Indeed, many online platforms benefited from the impact of Covid as even underwriters and brokers who’d sworn to keep the pen in their hands took to their keyboards in droves.

Post Covid, the London market struggled to find its new equilibrium. Some Opal users disappeared but more materialised to replace them. Today, the platform is one of the keystones of Aegis London’s construction, and has sparked changes in our business such as the creation of the digital trading division and a new strategic prominence for the D-words – digital and data. We’re also now at the stage at which we’re considering opening Opal to third-party products, if we can find the right ones. Creating an Opal ecosystem, so to speak.

So where did it go right? The lesson, I think, is that the seeds of success or failure lie in DNA of a digital trading platform, specifically its parentage. The early insurtechs were the progeny of the tech sector. They had great ideas, great technology – and at some point, a decision was made to deploy that technology into the insurance sector.

The problem many of those insurtechs encountered is that insurance wasn’t in their DNA; no, that was full of algorithms and binary numbers. They were digital companies that wanted to make an insurance play. Digital start-ups are heavily reliant on third-party capital that has invested in their technology. Having invested, that capital shouts “Go! Go! Go!” – it demands growth. Rapid growth. History shows us that therein lie the seeds of many a start-up’s downfall.

Opal, on the other hand, is the digital offspring of the London insurance market. Compared to its rivals, Opal was relatively cheap to build, its technology is not so advanced, and it took a long time to reach the point at which we were happy with it. But we got the insurance right. We took existing successful Aegis London products and digitised them. In fact, right now I’m considering just how much of Aegis London’s product line we can digitise.

For us, Opal began life as an offensive, disruptive play but, over seven years, has evolved into a defensive one. Digital has become the norm; without a digital offering, a London business will miss out.

Where did it go right? By accepting that we’re not the smartest people in the room. By accepting that we’re not inhabitants of Silicon Valley. By trusting that if there’s one thing we do know, it’s insurance.