London is the insurance capital of the world, right? Wrong – that title is held by Hartford, Connecticut, who have managed to nab this coveted title and own the name. Whilst some in the UK might quibble with this global accolade, it is true that Hartford has a pre-eminence in the US for being host to numerous insurance company headquarters (Travelers, HSB, The Hartford, Aetna, and Cigna to name a few), and is fast becoming a magnet for insurtech business as well.
Last week I had the pleasure of meeting up with the Connecticut team behind this powerful ecosystem at the Hartford Symposium. CT IFS and the Metro Hartford Alliance promote Connecticut and the state capital, Hartford, as a centre of excellence for insurance and financial services. Over the past few years, they have been heavily investing in insurtech and, together with the UK Department for Business & Trade, have developed the Connecticut-UK ‘Insurtech Corridor’. The Insurtech Corridor is designed to provide a smooth landing for those UK insurtech companies wishing to expand into the US.
Insurtech UK fully supported this initiative and in fact, was one of the original signatories to the agreement. Since its inception, some 17 UK companies have been accepted under the scheme, receiving support to establish their businesses in Connecticut, including help obtaining regulatory licences, introductions to carriers, investors and partners, access to advisory services, and a wealth of local knowledge. The UK companies that have taken advantage of this service have enjoyed the opportunity to successfully scale in the US.
Connecticut offers a number of advantages for UK companies: it conveniently located halfway between New York and Boston, it’s in the Eastern time zone, and the cost of establishment is less than other states, especially its bigger neighbour, New York. Its government-imposed costs (ie taxes) as also lower than other states. Its capital, Hartford, is truly an insurance town, with 22% of its employed population working in insurance, the highest density in the world. It also has more insurance companies headquartered there than anywhere else in the US.
Innovate UK, the UK Government R&D agency, took a delegation of UK insurtechs to the Hartford Symposium to find out more. They had the opportunity to speak to a UK company who was already benefited from the corridor, Matrix IQ. Phil Powell, chief revenue officer, explained how the team in Connecticut had made a number of helpful introductions to carriers and provided support with establishing a presence in the state.
Matrix IQ has found genuine business opportunities in Connecticut, has set up an US entity, made some initial hires, and is now poised to establish an office and employ a team of staff within the next 18 months. It sees huge opportunities in bringing its technology to large US carriers who have an up-to-10x the customer base of their UK counterparts ‘Working with the corridor has opened the door to a number of large carriers we may never have spoken to otherwise. We have also been boosted by introductions to financial and legal support that has expedited, simplified and derisked our route to establishing a presence in Hartford.’
The UK Department of Business & Trade is keen to encourage more UK companies to take advantage of the opportunities offered by the corridor. UK insurtech has so much global potential – according to McKinsey’s 'The United Kingdom: The nexus of insurtech' report, insurtech is worth $20bn to the UK economy - and they are keen for UK insurtechs to export services to bigger markets such as the US. Who will be the next successful scale-up in the US remains a hot topic, but for now, we helping to ‘Connecticut the dots’ so that as many UK insurtechs as possible can take advantage of this opportunity.
