How a small insurance company thrives in 2021

It takes a lot to make a last-minute turn in your career, when you follow three decades in an industry by jumping ship and coming onboard what is essentially a startup.

Paul Little, chief operations officer of Protecdiv, performed such a manoeuvre a few years ago in joining the relatively new company. He spoke to the 1:1 Club, Intelligent Insurer’s online, on-demand platform for one-on-one interviews with industry leaders, to explain why and what this new offering brings to the market.

It began two years ago when founder and chief executive officer Kael Coleman approached Little to form Protecdiv, with the pair raising capital in 2019 and launching the company officially the following year.

“What we wanted in forming Protecdiv was to be able to leverage process, technology, and diversity. In fact, the name comes from the first syllable of those three words,” Little said.

“Since then, we have spent a fair amount of time focusing on how we improve processes within our own firm and within our communication and interaction with our clients and markets.

“We look to leverage technology in unique ways, whether it’s proprietary technology we develop internally, or the integration of technology that exists through third parties. Diversity is obviously a very important component in in the industry and to our firm,” he added.

Diversity does more than form part of the company’s name—it is integral to the core business, Little said.

“We know that through a diverse society, we’re going to encounter many advancements in the level of innovation. There’s an increasing recognition among major companies, and in general, that we benefit from having a more diverse society.”

Forced delay

Between raising capital in 2019 and today, the world has undergone a once-in-a-century pandemic. That changed things for Protecdiv. Little placed it within the context of a typical startup.

“The expectation in the first couple of years is that you’re not likely to break even. In our plans, we did think there were some near-term wins that we could have accomplished in 2020 that became likely to happen or partly happened in 2021,” he explained.

“It delayed bringing some business on the books, but at the same time, as a startup, you’re used to being agile and quick to market. We were able to pivot very quickly and utilise our skills in developing much stronger, detailed relationships, particularly on the primary insurance side.”

As to what the inevitable economic recovery would look like: “There are a lot of predictions about whether the recovery is going to be ‘V’ shaped, or ‘L’ shaped,” Little said.

“But it seems it will probably be more ‘W’ shaped because of some of the variants that have caused further lockdowns.”

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This obviously has some impact on the industry. “From a primary buyer standpoint it’s a very tough market. It’s a hard market, generally, across all lines of business,” he said.

“When we talk to companies, the focus they have right now is talking about the changes they’re making in terms of their business operations as they come out of COVID-19, how their exposures have changed over time, and what their plans are going forward.

“The market, generally is a tough one for buyers, and it does require that we understand and communicate their story in a way that creates differentiation for them in the marketplace.

“We do see that there would be some amelioration in the terms and conditions and pricing for the companies that have a strong story to tell in terms of how they’re managing their business.”

Secondary perils

On the property side, Little observed that the main talking points over the last year had been the effects of secondary perils.

“The focus has been on perils arising from wind, storms, and earthquakes, but we’ve seen over the last one to three years what would have been a moderate loss for some companies become an earnings event from secondary perils with the conflagrations in California, major floods, winter freeze losses in Texas from Winter Storm Uri—and then there was Hurricane Ida,” he said.

Protecdiv is a new company, and a relatively small fish within a large pond. It must be hard to make an impact, given those circumstances.

Not so, said Little. “We consider ourselves a challenger broker,” he explained. “We have relationships going back 30 years in this business, and this is a business of relationships. What we say to clients is that we can provide the same level of service in the US as any other broker. Part of the way we’re able to do that is through our strategic partnerships.

“We have the expertise and experience in the business, and access to all the tools that are needed to run the data and analytics of the company, and we have the access to the markets. We’re licensed in all 50 states, we’re appointed with most of the major reinsurance companies, and we have more than a dozen appointments on the retail insurance side.”

The forthcoming year will be interesting. Little said that Protecdiv is working on a number of projects, including year-end renewals and new business.

“We also want to leverage technology,” he said. “We are developing a number of proprietary tools and we’re working on our reinsurance broker placement platform.

“We know there have been some initiatives in the market in the last 12 months for brokers to work together to try and streamline that process and make it easier for the markets as well as companies to do business with the intermediaries,” he concluded.

To view the full 1.1 Club interview click here