A fast track to building a new insurance business

The Problem

It is not easy creating a new business from scratch. It is even harder when you need to convince the FSA and Lloyds of London that the new business – an insurance underwriting supervisory body known as a Managing Agency – warrants a license. This was the challenge facing an insurance company looking to transfer responsibilities from an external Managing Agency to a new purpose-built business. And the work had to be done quickly, to maximise the benefits to investors and to minimise the risk of slip-ups during migration.

Our Solution

First and foremost we recognised that any solution would need to pass muster with a number of key stakeholders with different motivations and demands, each of whom were critical to the success of the enterprise. Our approach was to ensure complete transparency - both for what the new agency would look like, within a Target Operating Model (TOM), and for how we would get there, by designing a clear and credible plan of creation and migration. Following our TOM design approach, we represented how the new business would work on a single page; something we find to be far more powerful and engaging than a technical representation of organisational structure. Building on this common and agreed understanding of the new business and the necessary change, we then delivered the stakeholders’ distinct requirements:

  • For our client; we identified the business case for each function to be migrated or developed, what the costs might be for parallel running and at what point a positive cash flow would result. We also identified how and when the accountability would pass so that there were clear lines of authority in the management of underwriting.
  • For the new management of the fledgling Agency; we identified the timetable for building the necessary capability and for gaining the licence to operate independently.
  • For the existing Managing Agency; we identified how the movement would affect cash flow and resource demands.
  • For the Regulators; we identified how each function could be scrutinised to ensure compliance before, during and after migration.


Client's Benefits

The new business was established, took on responsibilities from the incumbent, and gained a Lloyd’s licence, all in accordance with our vision and roadmap. Replacing the existing Managing Agency has allowed our client to deliver savings expected to reach £6.6m p.a. across a number of areas including commission on profit, fees on approved stamp, and cost of services.




 
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