What is VAVE?
Marek: In 2018, we spotted an opportunity to underwrite high-volume business, which is more than 40% of Lloyd’s premium, in a vastly more efficient and precise way.
The premise was simple: instead of delegating underwriting to a long list of brokers with varying specialisms, we create products in-house, and give our brokers the means to digitally distribute these products within their own networks.
Jamie: We focus on a small number of products with broad market appeal – this allows us to really invest in making each one a success. VAVE currently offers a Flood-only and US Homeowners product and we are currently launching our US Commercial Property product.
These products are controlled entirely by algorithm, which means they make decisions in real time and can underwrite with amazing precision.
Rob: If you were tasked with underwriting insurance in 2021, with no prior knowledge of how it is done currently or any systems legacy, then VAVE would be what you came up with. It allows for improved efficiencies in the supply chain by creating a quicker underwriting process at a lower cost, and with transparency throughout the whole process.
Jamie: Having the backing of our parent company, coupled with the independence of operating as a standalone MGA, allows us to be nimble, make quick decisions and focus on innovation.
Having the capital behind us, we had time to develop and build on the VAVE proposition without having to launch prematurely. We were able to work with all areas of the business to our advantage. For example, actuaries validated the model, we gained access to troves of data that wouldn’t otherwise have been available to us and we were introduced to the biggest wholesalers in the US.
Marek: Armed with little more than a compelling idea and a bunch of enthusiasm, Canopius granted us the time and resource to build the VAVE concept in a ring-fenced environment. It says a lot for the confidence of a business that it is willing to disrupt itself in the quest for innovation.
However, this commitment had to work both ways: to make it successful we had to call time on our day jobs, hand in our notices and make the success of VAVE our sole priority.
Rob: Now VAVE is an MGA, our close relationship with Canopius remains crucial – we have an alignment of interest between underwriting and capital that few MGAs can achieve.
Tell us more about the VAVE team structure
Marek: VAVE doesn’t have a traditional hierarchy and it shouldn’t. In a traditional underwriting team, the underwriter is the single point of all decisions. At VAVE, it is the algorithm making the decisions, and it is our responsibility, as a team, to service it in different ways, whether it’s feeding it data to improve the decision making, ensuring it runs optimally or providing distribution.
Jamie: At VAVE, we ditch the silos. We merge all of our skillsets and experience into one. The people in our team come from a range of different backgrounds: data science, catastrophe modelling, underwriting and portfolio analytics. We bring the whole team together so that everyone can have a say and suggest ways to build and improve on our products.
Rob: Encouraging people to opine on problems that would not have previously been in their remit has been really beneficial. Removing those traditional barriers is a cornerstone of our culture, it allows all us to speak about what we know.
Is VAVE another InsurTech?
Rob: There is a buzz around the word InsurTech – with VAVE our focus is simply being at the leading edge of underwriting. To occupy this space, innovative techniques and new technology certainly play a part, but they are not an answer in themselves.
Marek: We’ve been beneficiaries of the boom in the InsurTech space. It has opened doors and allowed us to build relationships with valuable partners who bring innovation to insurance.
What is the future of VAVE? What’s on the horizon?
Jamie: To see where we have come from to where we are now, so much progress has already been made and we’re just scratching the surface. The people within our team will help us to establish where we want to go from here and how we will get there, while also continuing to look for ways to improve the speed and quality of our products, user experience, claims settlement process and our impact on the market.
Marek: Launching as an MGA this summer was a milestone for us. It opens a new chapter where VAVE can really start to achieve scale by attracting new underwriting capital and distribution.
Rob: We’ve emerged from incubation and are on course to hit our growth target within Canopius – $100m of gross premium by the end of this year. It is truly exciting that we are bringing new business into the Lloyd’s market that is underwritten by our own proprietary recipe. Our next steps are to broaden our product suite through commercial property and parametric solutions and keep iterating and improving our live products as we gain insight from our data.
Marek: Diversity of opinion is key for us. Bringing people together from varied backgrounds who offer unique skillsets, think differently and aren’t afraid to put their point across. We’re passionate about retaining the spirit of innovation as VAVE matures – the answer lies in the quality our team.