Insurance Day is part of Maritime Intelligence

This site is operated by a business or businesses owned by Maritime Insights & Intelligence Limited, registered in England and Wales with company number 13831625 and address c/o Hackwood Secretaries Limited, One Silk Street, London EC2Y 8HQ, United Kingdom. Lloyd’s List Intelligence is a trading name of Maritime Insights & Intelligence Limited. Lloyd’s is the registered trademark of the Society Incorporated by the Lloyd’s Act 1871 by the name of Lloyd’s.

This copy is for your personal, non-commercial use. For high-quality copies or electronic reprints for distribution to colleagues or customers, please call UK support +44 (0)20 3377 3996 / APAC support at +65 6508 2430

Printed By


New CFC innovation facility seeks ‘uncomfortable risks'

Head of innovation, George Beattie, says new products are needed to address a growing protection gap

New products will initially be put through a ‘test phase’ with small limits and a limited number of policies to control downside risk and establish whether they are a good market fit

CFC Underwriting’s innovation binder is looking for risks that are too “uncomfortable” for other underwriters, its head of innovation said.

Speaking to Insurance Day, George Beattie said the facility would take on risks that others might pass on because they are perceived as being too dangerous, unknown or because there is too much data scarcity.

“We're looking at ideas that are defined as new because of four reasons: the product is new, meaning the actual insurance product is new; the target market is new; the distribution angle is new; or the technology is new,” Beattie said. 

He continued: “Another way you can view it is: how uncomfortable does it make a conventional insurer or a broker? The more uncomfortable it makes them, the better a fit it is with my team.”

The specialty managing general agent announced the binder earlier this week. Led by CFC’s syndicate 1988, the innovation facility will develop and underwrite products under Lloyd’s "ICX" innovation risk code to create insurance products for emerging risks not yet addressed by the market.

Over the years, the insurance industry has been catering for a diminishing proportion of GDP, and new products are needed to address this growing protection gap, said Beattie. Underwriters have “become quite good at tinkering with existing products, adding on different attributes offering existing products into new industries in adding in consultancy," he said. To arrest that decline, however, "we can't just carry on tinkering with existing products", Beattie added. 

One area of focus will be providing new insurance products for intangible business assets, as much of the market is still focused on fixed assets such as property or machinery, Beattie said. “This is all important stuff, but in the past 10 to 20 years the proportion of company value that is made up of intangible assets has grown to be the majority.” This could include things like intellectual property, trade secrets and digital assets.

The binder will initially put new products through a “test phase” with small limits and limited numbers of policies to control downside risk and establish whether they are a good market fit. After the test phase, CFC will return to its capacity supporters with the data and decide on whether to scale. “Scaling the product might look like a bit more limit per policy, it might look like a larger aggregate deploy on the initiative as a whole, but it's very structured approach,” he said.

The facility already has a “robust pipeline” of both near- and longer-term projects. “Some of that work might look like innovating quite close to the core, taking products that we know and love and using new technology or using new distribution theory to get them to new markets. Other things we're looking at look very standout and extremely new, and represent really big, probably multi-year efforts,” Beattie said.

Related Content





Ask The Analyst

Ask The Analyst - Ask Your Question Send your question to our team of expert analysts. You can: • Ask for background information on/explanation of articles in Insurance Day * • Find out more about our views on industry developments • Ask for an interpretation of market trends • Source supplementary data relating to articles • Request explanations to further your understanding of current issues (* This relates to any Insurance Day that is included as part of your subscription) We will do the research and get back to you personally with the information you need.

Your question has been successfully sent to the email address below and we will get back as soon as possible. my@email.address.

All fields are required.

Please make sure all fields are completed.

Please make sure you have filled out all fields

Please make sure you have filled out all fields

Please enter a valid e-mail address

Please enter a valid Phone Number

Ask your question to our analysts