Business insurance

Exclusive: CFC secures first-mover advantage with latest global offer

So why – until now – has the SME mergers and acquisitions market not been served in terms of declarations and warranties coverage or warranty and indemnity insurance? CFC’s head of transaction accountability, Gus Marshall (pictured), believes there are three main reasons.

“One is that the M&A insurance market or the transaction liability insurance market has been so successful,” Marshall said. Insurance company, “in some ways maybe too successful as a product that there was no time to develop new products because there was so much to write about.”

Another reason given by Marshall is the economic structure or model of monoline GMs which he says limits MGAs in their ability to create a large-scale product. In Marshall’s view, his camp – which in April announced the creation of CFC Syndicate 1988 – occupies a unique position and does not have the same limitation mentioned above.

He notes: “CFC is an MGA, but it acts more and more like a diversified insurance company. The union that was launched puts us in a unique position straddling that of an insurer and that of an MGA. Our success has allowed us to focus on these kinds of new innovations in transaction liability.

“From our early days, SMEs were always a key part of our business and we are slowly evolving into more than just an SME,” Marshall continued. “But we were struck by the fact that, yes, we are playing on the lower transaction spectrum on our core business of transaction responsibility, but we don’t have anything that is pure SME – and that’s pure SME, which suits us perfectly. because one of the theses of the success of this product is that you must be able to make it evolve.

“And this is the third reason why no product has been developed for the micro and SME market for transaction liability; that is, it is a difficult underwriting process to try to industrialize and scale.

According to the head of transactions responsibility, CFC has “rethink and deselect” the process of underwriting declarations and guarantees and reinventing it for an SME policy in order to make it scalable. Part of what went into development is CFC’s experience as one of the largest cyber SME underwriters in the world.

“The design of the product allows people to subscribe quickly, buy it cheaply, and not have to involve expensive lawyers and advisers too much in purchasing the product, all of which are hallmarks of the main market. responsibility for transactions, “said Marshall, who added that the evolution of the new policy is far from over.

“A reality of product development,” he stressed, “do you create a product and it evolves over time – and we expect it to evolve because when you think of the SME market? , you’re talking about millions of different types of businesses. doing different things in different places for different reasons.

“One of the challenges I had to put in place was how to create a fairly standardized underwriting process for an economy like the United States that is so sophisticated and diverse with a multitude of different issues. It was the biggest challenge I had.

In addition to the myriad of SMEs the product will target, CFC’s private company policy for sellers will also be available in four distinct markets: Australia, UK, US and Canada. And since the agency “makes” the market in this case, Marshall said it is committed to tailoring the proposal to become what the market wants.

“What’s interesting about this product is that it’s the same product idea, but we had to recreate it for each different market, which is a challenge,” noted Marshall. “We’re excited about each market because it’s just a full white space and no products are available. And I think our customers will probably buy it for different reasons in different markets.

“This underpins the evolutionary aspect of the product; we have to evolve and learn from our brokers and clients as this product becomes much more relevant and mainstream, which I think is a compelling proposition to provide a lot more certainty for people leaving a business. It almost seems unfair that this product has been denied to small business owners but available for sophisticated investment for so long. “

With the launch of the product, one of Marshall’s priorities is an educational trip with all CFC brokers. Because while the product labels are written in such a way that they are easy to understand and in plain English (as with all of CFC’s offerings), Marshall believes it is crucial to make sure everyone knows how to produce. the company.

“There’s no point in having a great product when brokers don’t understand how to place it,” he said while setting some goals for the future. “In terms of priorities for this product, we ideally like to write business the first year in any territories where we offer it. It is a priority. “

Another, broader priority is to stay the course in terms of product innovation at CFC.

Marshall said Insurance company: “This is not the last step in the overall innovation effort led by both Transaction Accountability and CFCs. Our slogan, as cheesy as people might think, is the truth, and it is “an emerging risk pioneer.” This is a good example, and we want to continue our momentum in developing new products.

“It’s amazing how successful the transaction liability market has been, but we also recognize that today’s addressable market is only a tiny part of the larger M&A picture. And we think there is a huge amount of opportunity in all kinds of different products. My priority is therefore to make Private Enterprise a success, then to continue this dynamic of innovation to continue to serve our brokers and our clients with new ideas, new products and new solutions.

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