If you closed your eyes while listening to MarkelTech’s recent webinar on why tech businesses need sector-specific cover, you could believe the conversation was taking place in person. Senior leaders from across Markel UK’s broker development space, its sales space, Markel Tax and Markel Law were on hand to shed light on the current state of the tech sector and the opportunities it holds for brokers and their clients.
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Offering an overview of these, Richard Brooks (pictured top left), broker development director at Markel UK, highlighted the variety of opportunities that reside within the sector. Even pre-pandemic tech was the third fastest-growing sector in the UK and valued at around £200 billion, he said, and the sector’s trajectory has not just been constant but has also grown over the last 12 months or so as home working has become the status quo. Brokers and customers alike are fascinated by the speed with which tech companies grow and the incredibly high business success rate of tech start-ups (80%).
“But I think the most fascinating thing for us,” he said, “is how poorly served a lot of those customers are… in our experience, so many are actually on the wrong basis of cover. [Markel UK’s recent sector analysis has revealed that 69% of businesses do not have the appropriate level of cover in place based on their unique requirements].
“This is because, quite commonly, they’ve been misunderstood to be something they’re not. They’re probably on a standard commercial combined policy, rather than a tech specialist one. Even for those customers who are on a tech specialist policy, it’s very unlikely that that policy provides access to the tax and legal services that Markel UK can offer. So, it’s a really exciting sector, not brilliantly served, but one which we at Markel UK believe we can provide some unique added value around.”
Discussing this value proposition, Mark Lowther (pictured bottom left), head of financial lines sector sales at Markel UK, emphasised that tech is a significant growth area for the business and one which, from an insurance perspective, it defines through three distinct (albeit overlapping) pillars. The first is biomedical and life sciences, the second is IT, technology and communications, and the third is technology products.
Lowther noted that Markel UK is keen to provide its broker partners with a flavour of what fits under each of these pillars as it can often be confusing for them to concretely determine what one insurer deems to be tech, as opposed to another insurer, as well as what wordings the coverage will be placed under. His key message to brokers, he said, is that as Markel UK has created these three pillars, the insurer will worry about which wording is best, where the cover is best suited and what extra endorsements can be included. That’s what his underwriting team is there to do, he said, and they’re able to do that very well.
Markel UK’s products are offered on a combined basis and with a full comprehension of the sheer range of risks that each individual business in the tech space faces, something which only comes from truly understanding the tech business being covered.
“So in terms of what makes us unique,” Lowther said, [it really comes down to what we offer to insureds who are potentially being mis-insured or not buying the right covers. And, while we don’t see that from most of our brokers, of course, when we do see cases, we are able to compete against competitors that are tech specialists but also those that offer a more general commercial combined policy [without] specific covers. And we can offer our advice when we see those inquiries and talk our brokers through that.”
By possessing such a thorough understanding of what brokers need to know about the exposure of their clients, Markel UK is doing the heavy lifting in terms of ensuring tech insurance policies are fit for purpose. Lowther noted that the insurer is always focused on making sure this rings true to its brokers and that, except where necessary, the business is not modelled on sending out generic quotes or proposal forms.
“Sometimes [just detailing] what the client has asked for is appropriate,” he said, “but other times it’s a case of having a tripartite call with the client and the broker, understanding the client, and understanding what you sometimes can’t get from a proposal form, or terms and conditions, or a website. Sometimes you need to actually speak to them and understand what they do, and that’s something that we’re not afraid to do.
“And sometimes insurers don’t talk enough to their clients – to see what they need, to understand what their product does. Because everyone likes to talk about their business, particularly when it’s taking off, or it’s a new starter or it has succeeded… And we’re always delighted to talk to our clients and to our brokers as well.”
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