Howden seals £500m support to turn tech start-ups into underwriters
Insurance broker Howden has secured £500m of delegated underwriting capacity from a group of Lloyd’s of London firms for a new division that aims to turn tech start-ups into underwriters.
The new arm, Howden Ventures, backed by Lloyd’s underwriters, including Tokio Marine Kiln, Chaucer and Liberty Speciality Markets, have pledged to hold the risk for a total of £500m of insurance coverage to support technology start-ups.
Howden Ventures also concluded its first investment in CetoAI, the maritime technology company that combines data analytics, engineering and artificial intelligence to manage machinery shipping maintenance.
CetoAI’s uses live data to allow ship owners, operators and insurers to reduce machinery breakdowns and understand operational risks in more detail.
Howden, which specialises in corporate broking, has grown to 15,000 employees after multiple acquisitions with revenues last year of £1.8bn.
Tom Hoad, head of Howden Ventures, said that the new venture will combine the traditional managing general agent model of insurance with so-called insurtech, which, in turn will “foster collaboration, and to merge external talent, fresh thinking, new technology, funding, and underwriting capacity”.
Hoad told the Financial Times that the model could work across speciality lines of insurance, where start-ups’ data edge in niche areas could mean more competitively priced coverage.
The Howden platform has a range of safeguards including exposure limits and other governance checks, such as an underwriting committee that includes the insurers partnering with the start-ups, Hoad told the FT.
As new funding for the global insurtech sector has continued to fall since the collapse of Silicon Valley Bank, Howden Ventures has initially committed £10m of new funding to the sector, with a view to support at least five new start-ups over the next two years.