New incubator backed by delegated underwriting capacity from backed by Lloyd’s underwriters, including Tokio Marine Kiln, Chaucer, and Liberty Specialty Markets. Its first investment was named as CetoAI, a marine technology firm.
Howden has announced the launch of an innovation hub to fast-track insurance product development, backed by some £500m of delegated underwriting capacity from Lloyd’s market carriers.
Named Howden Ventures, the incubator has committed £10m of fresh funding to the insurtech sector, concluding its first investment in maritime technology company CetoAI.
The incubator combines technology investment with risk taking via a managing general agent (MGA) business model.
Carriers committing capacity to Howden Ventures at launch include Tokio Marine Kiln, Chaucer, and Liberty Specialty Markets.
The broker’s new innovation hub will be led by Tom Hoad, previously Tokio Marine Kiln’s head of innovation, named as the head of Howden Ventures.
“Innovation is all about working together and, for the first time, Howden Ventures will assemble the most innovative thinkers in the insurance ecosystem to help solve some of the world’s most critical risks,” Hoad said.
The broker’s project aims to bring together funding, underwriting capital, expertise, governance and distribution in one place.
“Combining the MGA model with insurtech innovation provides the ideal platform to foster collaboration, and to merge external talent, fresh thinking, new technology, funding, and underwriting capacity,” Hoad continued.
“By doing so, Howden Ventures is aligning interests from all corners of the market to create an economic model that will help the insurance industry invest in the type of long-term, innovative solutions that clients are looking for,” he added.
Howden noted that new funding for the global insurtech sector continues to fall following the collapse of Silicon Valley Bank, but that Howden Ventures launches “with a view to support at least five new startups over the next two years”.
Howden Ventures said that as the UK government moves forward with its planned Solvency II reforms, it will help bring these policy priorities to life by developing innovation in the insurance sector and helping improve the sector’s social impact.
David Howden, CEO of Howden Group, said: “MGAs are the innovation dynamite of the insurance industry. Cyber insurance, insurance for renewables, D&O insurance… they were all born in the MGA marketplace where capital meets innovative and entrepreneurial talent and capacity providers can be part of critical R&D that clients are crying out for by sharing the risk.
“I always say that the insurance industry needs to remain relevant to its clients and that is Howden Ventures’ job: to supercharge innovation by bringing great talent and quality capacity together with a turnkey platform to solve the big problems,” he added.
Dawn Miller, commercial director, Lloyd’s, also commented on the launch.
“Howden’s new commercial mechanism is a great example of industry collaboration which leverages the Lloyd’s market’s ecosystem of innovation and the MGA model to fast track new solutions,” she said.
“We’re proud to be able to bring people together through the Lloyd’s Lab to solve complex problems and find solutions to help our customers tackle critical risk management challenges and become braver, smarter and more resilient,” Miller added.
The recipient of the hub’s first investment, CetoAI, was described as a maritime technology company, “combining data analytics, engineering excellence and artificial intelligence to manage machinery breakdown risk in global shipping with predictive maintenance”.
The insurtech aims to allow ship owners, operators and insurers to use live data to reduce machinery breakdowns, increase vessel utilisation rates, understand operational risk in more detail and reduce performance related emissions, aiding the transition to the low carbon economy.
“We are delighted to welcome Howden as an investor in CetoAI,” said Tony Hildrew, founder an CEO, CetoAI.
“Their financial contribution and unparalleled network, including some of the largest ship owners across the maritime sector, will support our significant growth ambitions as we continue to bring fresh thinking to the maritime market,” he said.
“The funding, underwriting capacity and expertise that we can access through Howden Ventures is unparalleled and will allow CetoAI to address the emerging risks faced by clients as vessels become larger, more connected and technologically advanced,” Hildrew added.
Daniel Whiteside, global head of marine, Howden, said: “Our investment in CetoAI is the perfect example of the power of insurance to drive market innovation and the development of new products that address climate risk and resilience.
“With Howden’s support, CetoAI can draw upon the best minds and expertise that the specialty insurance market has to offer as it solves some of the greatest challenges facing the maritime industry,” he added.