This article was produced in partnership with Frontier Global Underwriting
In a market with too much capacity, conditions can become untenable quickly and it pays to be able to distinguish yourself from the crowd.
This is what Frontier Global Underwriting is observing in some parts of the professional and financial lines market of late.
“Too many players hunting in the same pond has seen market conditions turn into what can only be described in many pockets as irrational,” said managing director Joel Pridmore.
Luckily, Frontier’s approach allows it to operate above the chaos of the wider market. This is because it focusses on those risks that others may say no to in the financial services and emerging industries sector.
Some examples of areas that Frontier specialises in are retail investor focussed agricultural and mortgage funds, trading platforms, fintech, blockchain/Web 3, cryptocurrency, AI and cannabis and hallucinogens.
“We welcome the hard-to-place risks as that’s where clients and brokers need support,” said Pridmore.
A number of these areas have reputations that keep some underwriters away – but Frontier provides value and a competitive edge through its meticulous research and deep local knowledge of these industries.
“We seek to provide solutions to misunderstood risks or those with stigmas. We underwrite individual clients and not sectors, this is what we pride our identity on. This resonates with clients as they are often punished by the reputation of their overall sector,” said Pridmore.
The fact is that there are risks in these sectors that can be insured, but that extra work and an intimate knowledge of the client is needed – something that Frontier understands well.
“We firmly disagree with tarnishing every risk with the same brush. In this respect we look to tame the stallions, not ride with the herd.”
Not only does Frontier underwrite these risks, but it also has a wide capacity to do so, backed by a range of international insurers.
“Across the Frontier Global Underwriting Group spanning our UK and Australian offices our capacity providers span Lloyd’s and company markets based in the UK, Australia, Bermuda and the Caribbean. We have nine individual binding authorities with each capacity provider writing 100% of the binder,” said Pridmore.
This capacity makes Frontier a rarity.
“Having this breadth of capacity support across the Group translates into one of the broadest appetites in the Australian market in the financial and professional risks space. Frontier has developed the reputation as an insurer who considers difficult to place risks. In this respect we bring the capacity of the world to Australia,” said Simon Spencer, financial lines and cyber underwriting manager for Australia & New Zealand at Frontier.
Few other underwriters can point to this as a strength in the areas that Frontier operates in.
“Our point of difference is the work we have done to secure binding authorities with a number of world class capacity providers to bring both traditional and innovative solutions to the Australian market. We combine this with deep industry knowledge driven by continuous learning of the sectors and clients that complement our ‘niche’ approach,” said Pridmore.
Frontier freely admits that it isn’t trying to capture a broad swathe of the professional and financial lines business that is out there. Why would it when that market is already competitive to the point that underwriting discipline and pricing levels are so challenging?
“We aren’t everything to everyone, but we don’t want to be – the brokers and clients that partner with Frontier understand the value of our specialist nature and [the importance of] driving solutions-focussed outcomes for clients,” said Pridmore.
Frontier approaches its relationships with brokers with this in mind, preferring to partner with brokers who are proper advisors, and those who are committed to working hard with the insurer to produce the best possible result for the client.
“We want our broker partnerships to be collaborative, dynamic, and reciprocal. We will never be a ‘please quote’ agency as the market has plenty of those types of insurers,” said Spencer.
The underwriter sees a main challenge for clients as the lawful management of employees whilst managing operations in an economic downturn.
This is hard given the lack of internal HR resources at most Australian businesses. External HR support often means using a law firm at law firm rates. To help clients with HR matters, Frontier has teamed up with a specialist HR consultant to offer broker partners and their clients a fully outsourced HR service with broad Employment Practices Liability Insurance provided.
Clients receive the services of a qualified and experienced HR consultant, advice on Australian employment law such as the Fair Work Act 2009 and Work Health and Safety Act 2011 as well as federal laws giving protection against discrimination, bullying, and harassment in the workplace.
“This is insurance as a service in its most pure form, which is something we as a Group are firmly committed to,” said Spencer.
While some of the areas that Frontier caters to are sometimes seen as risky to the uninitiated, the underwriter ironically sees more of a latent risk in the state of the broader market itself.
“The irrational behaviour of certain players within the market has the potential to leave many clients high and dry in their time of greatest need,” said Pridmore.
After all, opportunist insurers have jumped into the Australian market with attractive rates in the past only to pack up and leave when the going got tough. As a local firm with local knowledge, Frontier is committed to the long term.
“Insureds that require professional indemnity for their licencing or for contractual purposes need to partner with insurers that understand their sector and will not run for the hills when issues arise,” said Pridmore.
Frontier Global Underwriting provides world class risk transfer and insurance solutions to clients around the globe. The founders and senior management have over sixty years’ combined industry experience, having worked intimately in the markets in which they serve. With offices in London and Sydney, Frontier provides 24/7, 365 days a year service to its client base. Frontier is a full service Financial Lines coverholder with specific expertise in the Financial Institutions sector.
