The Role of Insurance in Innovation
It is an interesting paradox in the insurance industry right now: An industry that can, at times, struggle with innovation due to its own legacy systems, is the very same one critical to the support and facilitation of innovation in other businesses across the global economy.
There is perhaps no better illustration of the insurance industry’s potential impact on innovation than the increasing shift from carbon to clean energy and the challenges met when looking to find appropriate coverage in this nascent business segment. Just as a new manufacturing company would struggle to launch without protection from a potential fire via property coverage or an exceptional Board of Directors could not attend its first meeting without a Directors and Officers policy in place, clean technology in development simply cannot flourish without a product liability policy built by underwriters with a deep knowledge and understanding of the technology’s complex engineering and unique risk profile.
Facilitating a sustainable future through insurance requires the engagement and contribution of the myriad stakeholders in the insurance value chain. Opportunity exists for our industry to provide commercial leadership via meaningful, free-market solutions. And while insurance companies often define their Environmental, Social and Governance (ESG) efforts in the context of what they will not underwrite, it is just as – or perhaps even more – important to talk about the commercial solutions, such as Property & Casualty coverage and collaborative risk management strategies, available to emerging technologies in the ESG space. When structured and distributed affordably and efficiently, commercial insurance allows these entrepreneurial and innovative organizations to focus on building their technologies and reaching scale, rather than the risks associated with these endeavors.
MGUs such as Ethos Specialty are uniquely positioned to provide specialty niche underwriting and claims expertise on the front end while managing and diversifying risk on the back end. In the case of renewable energy, Ethos Specialty has identified specific segments with a critical market need for coverage and aims to support small and medium-sized U.S. businesses that are developing cutting-edge products in the Clean Technology segment and who have historically struggled to find coverage in the traditional markets. By taking a unique engineering approach to underwriting – that is, by developing, training, and transforming sustainability engineers into specialty underwriters, rather than the other way around – and partnering with third-party experts to aid in superior risk selection – there is ample opportunity for profitable business that solves for this gap in the market.
To support the journey toward a cleaner future, and the build out of our specialty insurance programs, Ethos Specialty is proud to announce the launch of its Clean Technology program in partnership with Accelerant. The product will be available in Q3 2022 for limited retail distribution, providing our trading partners with a dedicated team to quote and bind select small business General Liability and Excess Casualty coverage.
Ultimately, as enablers of change and opportunity, it is the responsibility of insurance professionals to refuse the status quo and instead, develop smart solutions like our new Clean Technology program that can help protect businesses that are driving us to a more sustainable future. Visit ethosspecialty.com to learn more.
Jeff Canfield is the Executive Vice President, Casualty and Product Innovation for Ethos Specialty. He can be reached at firstname.lastname@example.org.