Collaboration between competitors happens in the property/casualty insurance industry when the goal is to tackle tough risk issues like improving protection for vulnerable low-income populations around the world or making properties more resilient to weather events.

Carrier Management reached out to industry executives recently, asking them to respond to a series of questions about innovation efforts at their companies. Answering our 10th question, seven industry leaders describe collaborative endeavors they engage in with direct and indirect competitors.

Q10: Have you ever collaborated with market competitors to move an innovation forward? If so, why did collaboration make sense in this situation?

McGavick (XL Catlin): We’re proud to be a part of the recently announced Microinsurance Venture Incubator (MVI) Consortium.

Many insurers realize there are some risks that are best not to tackle alone. Together, however, we can address these risks by pooling our resources. While limiting our individual downside risk, we can bring to the table our greatest skills and assets to address some big problem and really show the value and potential of insurance as a solution.

Galanski (Navigators): The Lloyd’s market is a perfect example of collaborating to drive innovation. New ideas can be developed in the subscription market because a respected leader can establish the coverage terms and price, with the placement to be completed by others who “follow” the leader without any one risk-taker having to take on an inordinate amount of risk. We have been part of the Lloyd’s market since 1998. Lloyd’s is a wonderful vehicle for insurance innovation globally.

Rios (American Modern): On the property side, one of the most important industrywide collaborations on behalf of innovation is seen in the broad support for the Insurance Institute for Business & Home Safety and its research, which, over time, will help make residential and commercial structures more disaster-resistant.

Sciolla (Gen Re): There are so many ways that we can innovate. It’s not just about product.

We offer a cyber insurance product for primary insurers, combined with reinsurance. Cyber insurance is not all that new by now, although not all insurers or reinsurers offer it. We took a unique approach of teaming up with a leader in the cyber insurance service space, Beazley. Gen Re and Beazley combined their strengths—pricing tools, policy forms development, breach response management and claims handling—into one product offering with reinsurance. For the insurer, all of that expertise is combined and available in one-stop shopping directly from us.

As cyber exposures and insurance needs continue to evolve, that teamwork helps ensure we respond with the best product and service solutions.

(Editor’s Note: The cyber insurance is written on the paper of Gen Re’s customer—the primary insurer. Gen Re is the reinsurer and delivers product support, while Beazley provides breach response and claim services.)

Lightfoot (Guy Carpenter): Yes, we’ve been working with competitors to support Oasis, a not-for-profit initiative based in London that is creating a platform to lower the cost and complexity of catastrophe model development. We believe it will provide more credible views of cat risk to the industry.

Watson (Argo): We have collaborated with business partners in the past and continue to find value in forming strategic partnerships that support our business goals. For example, in one case, we designed a new product and our competitor/business partner (a reinsurer) assumed the risk. With this particular product, we already had a sizable investment risk out there, so the combination proved to be mutually beneficial and profitable.

Kelley (Ironshore): At Ironshore, we collaborate with other risk-takers in the form of reinsurance. We believe in the necessity of working with reinsurance entities through a range of favorable and far-reaching risk management structures to deliver meaningful, vital market capacity.

(Editor’s Note: In early 2009, Ironshore announced that it would team up with C.V. Starr & Co. to launch Iron-Starr Excess Agency Ltd., a specialty lines insurance and reinsurance managing general agency, offering catastrophic excess casualty capacity for Fortune 2000 companies. In July 2014, Hamilton Re signed on as another subscribing insurer, increasing the amount of capacity Iron-Starr can offer for a full suite of casualty, financial lines and health care products.)
Read more innovation responses:

Click on the each executive to reveal their responses.

Stanley A. Galanski, President and CEO, The Navigators Group, Inc.

1. Stanley A. Galanski, President and CEO, The Navigators Group, Inc.
2. Mark E. Watson III, President and Chief Executive Officer, Argo Group International Holdings, Ltd.
3. Kevin H. Kelley, Chief Executive Officer, Ironshore Inc.
4. John Wurzler, President, OneBeacon Technology Insurance
5. Alan B. Colberg, President and Chief Executive Officer, Assurant, Inc.
6. Manny Rios, President and CEO, American Modern Insurance Group
7. Dave Pratt, General Manager, Usage-Based Insurance, Progressive
8. Berto Sciolla, EVP and Manager of North American Treaty Reinsurance,Gen Re
9. Greg Hendrick, Chief Executive, Insurance, XL Catlin
10. Anand Rao, Principal, PwC U.S. Advisory Practice
11. Mike McGavick, Chief Executive Officer, XL Catlin
12. David M. Lightfoot, Managing Director, Head of GC Analytics – Americas, Guy Carpenter
13. Conan Ward, Chief Executive Officer, Hamilton USA
14. Ming Lee, Chief Executive Officer, AIR Worldwide
15. Laura Hay, National Insurance Sector Leader, KPMG LLP
16. John Lupica, Vice Chairman, ACE Group; Chairman, Insurance–North America

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