Insurance Covid-Cast episode 18: Brit's James Birch on digital Lloyd's start-up Ki's plan to be a top 10 syndicate by 2025

Opening for trading on 1 January 2021, Ki’s algorithm enables it to automatically quote for business through a digital platform which brokers can access directly anywhere and at any time using Google Cloud technology. The selection process is performed using a proprietary algorithm developed with support from University College London and its computer science department. Ki will follow several ‘nominated’ lead syndicates across the Lloyd’s market, including Brit.

“Ki is a partnership between Brit Insurance, Google and UCL,” according to James Birch, head of innovation at Brit, speaking during the latest Insurance Covid-Cast newsmaker special.

“This is something we have been working on collectively for about nine months and the initial hypothesis was around the expense pressure that the Lloyd’s of London market has been under for so long. And rather than trying to gain a point here or there on commission, take our destiny into our own hands and reduce it.

“And that is how the concept for Ki came about and we looked at other financial markets, particularly the capital markets, where they have leveraged technology and data science to drive a lower expense base and improve performance.”

Birch said the UCL team has built 37 different algorithms to date, and that Covid-19 had not sped up Ki’s unveiling as it had always planned to go public once it had regulatory approval in principle and capital commitments from investors.

Ki is backed by Brit, Fairfax and other private capital investors. It will be run by a dedicated team reporting to Mark Allan, group CFO at Brit, who will act as executive chair.

“It really illustrates the need for a digital approach for the Lloyd’s of London market which has been so traditional for so long and in my mind is the last financial market to be affected by ‘digital,’ continued Birch.

“So Covid-19 will help push it into a new digital era and Ki will be the first mover and I am sure others will come. And we welcome that because from our perspective we imagine our peer group will launch similar platforms over the next year or two which will validate our business model and the requirements for a new approach to doing follow capacity”.

Birch said that the response from intermediaries had been positive, and that it had spent the last fortnight doing roadshows with strategic broking partners: “[Ki is] broker-led in terms of design and function, so we have tried to take out all the fiction and all the pain points from the user journey. So where previously it might have taken two weeks to get follow capacity, now takes a matter of clicks or minutes.”

Although Birch explained that its launch capacity was to date confidential, he concluded: “That has not been approved by Lloyd’s and the regulator, so we are still in discussions. But the ambitions of the syndicate, I can speak about that, are by year four or five it will be a top 10 syndicate in terms of premium.

“So we are trying to get to scale pretty quick, and we should be able to get their pretty quick. Year one has yet to be approved in terms of the definitive number but the important thing to take away is that is not going to be a small start-up syndicate. Even from year one it will be a sizable syndicate within the market.”

In 2018 it was reported the tenth largest Lloyd’s syndicate was Syndicate 2008, Starstone Underwriting with $1.2bn of capacity. Brit Syndicates syndicate 2987 was third with $2.1bn.