‘This sector is a fabulous industry, but fraught with unsolved problems,’ says chief underwriting officer.
Many firms within the insurance industry claim to be synonymous with the sort of innovation that drives excitement in the future but, in the Apollo Group’s case, you would be hard pressed to deny it.
Whenever news has broken in the last 12 months of an innovative product or proposition launch in the London market, the insurance group has been odds on to be involved – whether that be directly or through its strategic partner syndicates at Lloyd’s.
For example, Apollo was responsible for underwriting the AppliedEV, the first fully autonomous, zero passenger vehicle to drive on European roads in 2022 via its Ibott managing general agent (MGA).
It also supported drone insurance MGA Moonrock to become a Lloyd’s coverholder earlier this year, as the firm’s long term insurance partner, and partnered with Innovative Risk Labs to launch a parental leave insurance product.
Speaking to GR, Apollo chief underwriting officer (CUO) James Slaughter, (pictured), explains that this commitment to innovation is no accident.
On the contrary, he believes: ”In the last 12 months, quite a lot of very exciting things have come out of a very deliberate business strategy around engaging with opportunities.
”It all comes back to one fundamental capability, which is culture aligned the values of the business and the people in it.”
Wings of fortune
Slaughter’s journey to his role as CUO at Apollo Group has been what he calls a “long old story”, but it began with him visiting a friend in the City, who had just joined Commercial Union’s graduate scheme, and deciding to do exactly the same.
In a full-circle moment, that friend – Carl Day – was recently announced as Apollo’s new deputy CUO and will link back up with Slaughter in late 2024.
Following on from joining Commercial Union’s graduate scheme, Slaughter says that he “rode the wings of fortune” by “grasping opportunities” that presented themselves to him.
In one of the acquisitions that followed Commercial Union’s merger with GA to form CGU, Slaughter took the opportunity to transfer across to Berkshire Hathaway rather than remain on what had become Norwich Union’s graduate scheme.
After a formative period at the Warren Buffet-owned firm, which covered the time period including the 9/11 attacks, named storms Ivan, Charlie, Jean and Francis and “a massive correction in ratings”, Slaughter joined Liberty Mutual’s Syndicate 4472 in the middle of 2005.
It was there, in 2010, that Slaughter was responsible or the launch of Liberty’s global reinsurance strategy group, of which he became global chief executive in 2017.
Slaughter says: ” Through that whole process, I learned a huge amount at a relatively young age. But when Covid hit, running a global business was really tough, with 18 hour days back to back over Zoom.”
It was at this point that Slaughter went decided he “had given it his all” at Liberty and left to begin “an early retirement”.
This didn’t last long, however. Slaughter explains: ”During that phase, I increasingly thought that I hadn’t quite exhausted all of the avenues that I felt I could in the industry. This sector is a fabulous industry, but fraught with unsolved problems, principally in the deployment of technology in a sophisticated way.”
Gin and tonic document
It was during his early ‘retirement’ that Slaughter completed his “gin and tonic document” – so-called because he put it together “while travelling Europe with my family and sipping gin and tonics by lakesides”.
He explains: ”The gin and tonic document is my thesis on the future of the industry, which become what we call augmented underwriting at Apollo. It’s a philosophy of human-integrated technology around how we can improve as an industry – our customer focus, our engagement, performance, product, all of these aspects – by correctly embedding the opportunities that technology brings.”
Slaughter eventually joined Apollo after he was introduced to chief executive David Ibeson and had a chat around “how we saw the world”.
He says: “It turned out that we were 10 for 10 on all the things we agreed on and the rest was history.”
However, Slaughter says that, prior to agreeing to join the firm, he performed some due diligence with people he knew at Apollo, to check whether it walked the walk on its outward, innovative appearance.
”Apollo, almost by serendipity, turned out to be exactly the platform that was a natural fit for me. We have innovation running through our blood here.”
Character of innovation
As Slaughter puts it, the prerequisite of Apollo’s success in innovation is culture – but the prerequisite of culture is a shared vision of success from the top down in an organisation.
He says: ”As a leader, you’ve got to persuade your people of your vision – and everything that goes with that – and bring them along with you on that journey. One of the most important things for leaders in our industry is to be really thoughtful about how you see the market in the five to 10 year time horizon.”
As the prerequisite for innovation, however, a culture of innovation is not the same thing as innovation itself. So what is?
Slaughter explains: “Innovation is a quirky thing that covers a lot of things, but what we mean by it here [at Apollo] is building new markets and new products that solve real customer needs.
”For example, Ibott was all about addressing the needs of the sharing economy, Moonrock was all about trying to address the fact that a standard aviation policy is not sufficient or appropriate for an electric take-off and landing vehicle.”
The other important aspect of Apollo’s success in innovation, as Slaughter sees it, is a commercial focus.
“Our innovation is commercial so, in that sense, we learn painful lessons more quickly,” he explains.
”If you have a lesson to be learned in our business, it’s probably because you need to reprice or change the coverage to make it commercially viable. One of the reasons it’s so successful is that every single one of those innovations has someone that’s responsible for [profit and loss].”
Most importantly, however, Slaughter believes that truly succeeding in innovation is about persistence.
He finishes: “If you want to be successful with innovation long term, you have to bring people with you right from day one – and they have to ride the bumps in the road with you because, because the rewards are not going to come in the first couple of years unless you’re very fortunate.”
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