George Beattie – Beazley
This week Sønr welcomed George Beattie, Head of Incubation Underwriting at Beazley, into our Spøtlight. We discuss innovation at Beazley, how ideas make their way through the business, and Beazley’s view on the market at the moment.
Hi George, can you tell us about yourself, and your background prior to joining Beazley?
Professionally, I’m someone that likes to spend time on the really ‘new’ stuff; things that will change how insurance products work, what they look like and whom they serve. As a ‘plant’ personality (Belbin behavioural test), I tend to enjoy ideation, solving hard problems and the excitement of creating something new. By contrast, I tend to get frustrated when things become routine. So – I suppose it’s lucky that I’m doing the job that I am!
Prior to Beazley, I worked at Willis Towers Watson- leading the Product Recall, Environmental Liability and Reputational Risks practice In London. I also spent some time at CFC, the MGA, helping to establish the Crisis Management team there.
On a personal note- I enjoy cooking (and eating), Netflix and I play far too much Call of Duty. I also became a father for the first time in lockdown; it’s the best and hardest thing I’ve ever done.
What does your role at Beazley involve?
I lead the Incubation Underwriting team at Beazley. Our role globally is to discover, develop, launch and underwrite brand new commercial insurance propositions. The products we work on are things that don’t fit naturally within an obvious area of the business – so one could define our objective as ‘breakthrough’ innovation, as opposed to more incremental adaptation (also an important part of innovation).
In addition to working on products from idea stage to fully functioning product, and then underwriting those products, we provide due diligence on insurtech and other unusual MGA opportunities. For example we assisted the Cargo team at Beazley to understand and participate in the Global Health Risk Facility (GHRF) which is led by Parsyl syndicate in Lloyd’s and aims to insure the transportation of Covid-19 vaccines to lower income countries.
What did innovation look like at Beazley when you arrived, and how is it now set up?
Like most companies, Beazley has had a variety of teams and functions working on innovation in the past. The toughest thing about working in innovation is that it’s a broad topic, so knowing what’s valuable over time to different stakeholders is difficult over the long-term without a clear guiding principle as to what it is that a Company wants to achieve. These teams have delivered great results, and I think we have a blueprint now to create something differentiated, that will stand the test of time.
What I like about what Beazley has done with innovation as a theme is that the Company has essentially deconstructed innovation into different pots. These pots can loosely be defined as ‘breakthrough products’ (the part that Incubation Underwriting deals with), ‘product development’, ‘technology’ and lastly ‘cultural/social’, which is owned by every team. The last one is important – Beazley attracts creative people who are keen to problem solve and who think differently to come up with new solutions. We put a great deal of effort into getting people invested and excited about change and the role they can play in it.
Getting into a little more detail, how do ideas make their way up through the business, get evaluated and ultimately get brought to market? Is the process top-down or bottom-up?
We designed a proprietary framework for assessing, progressing and launching ideas – similar to the ‘123’ framework from 90 Consulting. Fundamentally it’s a lean methodology that enables us to avoid bureaucracy and make fast decisions. Critically it allows us to fail in a transparent and constructive manner. One has to ‘kiss a lot of frogs’ to be successful at innovation, and in the 9 months we have been together as a team we have seen over 50 formal ideas.
In terms of where the ideas come from, there are a number of sources. Our own research, our management team, the underwriting teams, other functions at Beazley, brokers, academia and VC funds are the main channels. So – there’s a lot going on.
What’s unusual about my team is that we are empowered to underwrite ourselves. Typically we will hold products in a trading and accounting sandbox for a period of time before handing off to a sponsoring underwriting team to trade forwards. How long we hold them for depends on a) complexity and b) resource availability at the receiving team and c) achievement of incubation objectives (premiums, bound risks etc). If one considers the disincentives to innovation – namely lack of time and financial risk (there are others) – this approach is critical to overcome those boundaries.
How does Beazley measure success?
I see there being three things that define Incubation Underwriting’s success as a team:
A. Situational awareness
We aim to deliver the most sophisticated ‘house view’ possible in areas of interest. This may not always substantiate why we are doing something, but rather why we are choosing not to enter a space.
B. Future profitability
We want the products we launch to be successful and contribute to future profitability. The phrasing here is intentional; our role is not writing for top line income- it’s writing to test and validate. When we hand over to underwriting teams – they can expand appropriately.
C. Brand
We represent the company at events and bolster its innovative credentials and leadership.
What’s your view on the market at the moment? What are some of the key opportunities and threats presented to insurers right now?
Firstly – it’s a hard market where rates are heading up exponentially in some areas, so selling any new insurance products requires an even more nuanced understanding of value vs. cost. At a time where some lines of business are seeing rate increases of 30% or more – looking to sell new expenditure is harder than ever. Second – the industry has turned a corner in terms of accepting that it must do more, and faster, to make insurance more relevant to buyers. With some 80% of the average company’s value comprised of intangible assets, the fact that most insurance products cover only the tangible ones is symbolic of waning relevance.
So – while the industry knows that it’s time to walk the walk on innovation to ensure continued relevance, insurance buyers are in one of the toughest markets since 9/11 and so are prone to concentrating on saving their insurance programs in the short-term.
The danger is that insurers and brokers prioritise existing areas because there’s more money to be made, and they forget about innovation. Financially this might seem sensible for the short term, but the market cycle will turn, new capital will enter and inevitably innovation will move to the forefront of differentiation again. Innovation takes time- one can’t switch it on and off and expect (genuine) results.
I have some basic innovation lenses that are helping me to maintain focus:
- What’s uninsured or underinsured, that’s hurting companies?
- How do we improve what it’s like to interact with a product (claims)?
- How do we pay faster while retaining reasonable control?
- How do we enable better risk awareness for policyholders?
What’s your view on the future of Beazley, and the role innovation plays across the company?
Beazley is in a great position and I’m excited for the future; we are a thought leader in a variety of specialised commercial risk areas and have a talented team. Innovation has always been at the core of the company’s contrarian culture. People genuinely believe that they own a piece of the innovation puzzle at Beazley and are excited to play a role. Beyond the window dressing on every corporate website, one can’t say that about many companies.
What technology trend are you most excited about that could change insurance in a big way over the next 5-10 years?
Probably blockchain, but not in the context of solving insurance problems; in the context of what blockchain could do to the global financial system. The cryptocurrency market is growing at 70% CAGR and there is over USD 2trn of value in such assets right now. From dapps to ICO’s and NFTs- there are some incredible technological leaps being made. My excitement in the context of the insurance industry is that, if we lean into the challenge, we get to try to solve for these new problems and increase our relevance. This is a massive market with huge implications for how people and businesses interact in the future.
Finally, traditional insurance companies are not always known for innovation, though attitudes are changing. What are the key factors that enable a successful culture of innovation?
Four things. Most companies don’t (really) have them. Those that do need to fight to continue to be able to say it.
A. Patience
Innovation that prioritises short-term reward above all else is doomed to long-term failure.
B. Resilience
Most of innovation looks a lot like failure. You learn from mistakes. Some would argue this is critical for success.
C. Willpower
There is no reassuring consistency in innovation; it’s a street fight, every day. Stamina is key.
D. Curiosity
People who read (or watch) widely and organically are the best innovators. Also – innovators like solving problems everyone else ignores.
If you’d like to find out more about Beazley, please visit its Sønr profile, or you can check out its website.
