Speaking to The Insurer TV in our latest edition of Leading Voices, the former AIG, Zurich and XL executive acknowledged that securing reinsurance capacity in the current marketplace is not an easy task.
The start-up began underwriting on 1 July last year on the E&S paper of strategic backer SiriusPoint supported by a panel of reinsurers led by RenaissanceRe.
In its pitch to secure capacity, Joyn had been able to demonstrate that it had a “highly experienced” underwriting team with an “impeccable track record”, and it had also talked reinsurers through its “secret sauce”, said Macia.
This included how the insurtech’s machine-augmented underwriting and its technology and data strategy addresses underwriting leakage and can drive better underwriting decisions.
“That is really a very compelling value proposition to the reinsurers and it also instills confidence in growth, because we know exactly what every underwriter is doing and why they make an underwriting decision,” Macia explained.
“Usually in insurance growth is a dirty word because they all think you compromise your underwriting integrity. Well, the technology really addresses that – that was the main reason the reinsurers supported us and so far they seem to be very happy,” she continued.
Macia said that Joyn also recognises the importance of demonstrating alignment of interest with its reinsurers, whether by becoming a full-stack insurer, or through profit sharing and similar arrangements.
“You need to have skin in the game and we’re very comfortable having that. We are first and foremost an underwriting company. Our technology is completely designed to make fast and smart underwriting decisions, which is why we got the reinsurance support.
“We’re very comfortable having skin in the game because we believe in what we are doing,” she commented.
The executive said the insurtech remains open-minded about the path it will take and whether it will stay as an MGA, transition to a full-stack company or explore other structures such as a reciprocal exchange.
Joyn is also open-minded about future fundraising options as it continues to build out its business.
Macia said the public route would require a certain level of maturity as she also highlighted the increased scrutiny associated with that path.
“I think as long as you have enough capital to fund your growth – and there’s plenty of capital in the private sector – you’re probably better off to stay supported by private funding until you reach a certain maturity level.
“We’re really focused on the foundation and the basics – getting a really good solid underwriting company in place that can grow profitably through the cycle and deliver a great experience to our distribution partners,” she continued.
Admitted and product add-ons
Joyn began by offering E&S property in July last year and has subsequently added excess liability and general liability products in a multi-state roll-out as it initially targets six industry verticals in a commercial SME market it estimates to represent around $100bn of premium.
Macia said the insurtech had started in the E&S space because of attractive conditions and the speed to market it provides.
“We knew we could build the technology fast and with the admitted product it just takes a lot longer to get the state’s approval. So we said let’s go non-admitted first and then add on admitted products,” the executive added.
The current expectation is that Joyn will enter the admitted market in 2023, which will likely see it introduce package policies, umbrella and at some point auto.
Before then, the MGA will bring cyber, employment practices liability and equipment breakdown to its current E&S offerings as add-on coverages.
Longer term, Macia said that as well as growing Joyn to have a big book of business as a “really valuable organisation”, she hopes the insurtech’s tools and platform will help transform the industry.
“We believe this industry really is ripe for transformation so we’d hope that in five years’ time when we look back there are things Joyn did that will help make the industry better,” she commented.