Ready for Liftoff: BHMS Backs Boost

A captive is an insurance entity that a business creates, rents, or owns in order to self-insure risks. A cell captive, sometimes also called a protected cell captive or segregated cell captive, is a specific insurance captive structure that allows an entity to segment or separate business in one cell from that in another cell, so that a particular cell’s assets and liabilities are insulated from anything that happens in another cell (even if both cells are part of the same overall captive facility).  Using captives to self-insure risk offers businesses a number of benefits: they can participate in some or all of their program’s underwriting profitability, maintain end-to-end control over risk (including pricing and claims handling), and avoid paying significant overhead fees to a “middleman” insurer. Companies have several options for structuring and utilizing an insurance captive. They might build a single-parent captive, pool risk in a group captive, or make use of a cell captive. In this blog, we’ll take a look at each.  In a single-parent captive, a company will often partner with a fronting carrier to reinsure at least part of their own risk. These are most commonly used by very large companies with exposure to multiple lines of business, which they can insure through the same captive entity.  Example: A national food-delivery business wants to provide insurance to its restaurant partners, to protect against the risk of lawsuits related to food safety for meals delivered through the service. It discusses partnerships with several major insurance carriers, but none are willing to provide the level of coverage that the business is looking for at a reasonable price. To get what it needs, the food-delivery business sets up a captive to reinsure a fronting carrier partner, enabling the business to insure its own risk and provide the coverage it needs to its restaurant partners. Setting up a single-parent captive is a considerable undertaking with high capital requirements and a complex setup, with significant ongoing operational requirements going forward. In order to make sense financially, it usually requires a high volume of premium. For that reason, this option is usually only viable for very large businesses. For businesses that can’t afford (either in time or in money) to set up their own captive, a second option is to partner with other businesses in a related industry to set up a group captive. In this scenario, a single captive maintains portfolio capacity that can be shared by a group of entities. The entities can then pool risk together in the single captive. Example: Several real estate companies form a partnership to share a group captive to pool their similar risks. Each company contributes a certain amount of capital to fund the captive, and the capacity is shared among the partners. The participating real estate firms are then able to leverage the captive’s capacity to exercise greater control over their risk, and avoid paying high fees to middlemen. This can allow the partner businesses to share risk (and benefits) between them, and works well for trade associations and other groups of companies in related industries, that share similar risks. However, since the fund is shared between partners as well, one partner’s negative returns can impact the other partners involved.  In a cell captive, the business first sets up an entity called a core, which is a similar process to setting up a single-parent captive. Once the core entity is complete, however, the business can much more easily spin up additional cells within the captive structure. The financials for those individual cells are separate from each other, rather than the combined funding of a single-parent or group captive. For many companies, however, using a cell captive doesn’t mean building one themselves. While there are use cases for single-parent cell captives, most businesses that create them then rent out cells to other businesses. Using a cell in another company’s captive entity (also called captive-as-a-service) allows a business to reap the benefits of an insurance captive at a much lower cost. We’ll look at some examples in the next section. The first step in creating a cell captive is to create the “Core” entity. This process is similar to building a single-parent captive:  Once the core captive entity has been created and adequately funded, the owner can spin up individual cells within the captive’s structure to support different lines of business, segments, or partners. The Department of Insurance will still need to approve all new cells, but the process is much more streamlined than in prior cases. New cells can often be set up in weeks instead of the months or years typically needed for entirely new captive entities.  Captive cells’ assets and liabilities are then statutorily protected from each other (which is where the ‘protected cell captive’ name comes from). This means that if one cell has a difficult year and experiences significant underwriting loss, the assets of the neighboring cells can’t be used to fund that loss.  There are multiple ways that cell captives are used, including offering captive-as-a-service (also called rent-a-captive) to other partners or businesses, and separating different parts of the parent company’s business for performance tracking.  In a captive-as-a-service or rent-a-captive scenario, the company that owns the captive core would allow other businesses to use cells in its captive. For a fee, the owner can set up a new cell specifically for the partner business, and manage it on their behalf. This lets the partner business leverage the owner’s infrastructure to achieve many of the same benefits of a single-parent captive, without the cost and complexity of creating one. Example: An insurtech specializing in commercial insurance has built a very strong customer base, and wants to further grow its business by participating in some of its own risk. However, building a full captive is too resource-intensive for the insurtech to take on. Instead, the insurtech partners with a CaaS provider and rents a captive cell. The insurtech then uses the cell to self-insure some of its risks, enabling it to participate in the underwriting returns and further scale towards a full-stack insurance business.  While the most common reason for building a cell captive is to rent out cells to other businesses, there are a few reasons a company might build one for its own use. Because the cells’ financials are statutorily separated from each other, a cell captive allows a large enterprise to delineate between different lines of business or geographic regions, and monitor their performance separately. Example: A nationwide property management company offers several insurance products to its customers to help protect their personal property and finances.  For planning and budgeting purposes, each line is supported by an individual cell in the management company’s cell captive. Over the course of the fiscal year, several lines perform over their targets, while one line significantly underperforms. The other LOBs’ budgets are unaffected by the low-performing LOB’s losses, and the company has clear visibility into which of its products are doing well and which may need a course correction. Cell captives provide a number of benefits to both their owners and the end users: Cell captives are popular for a reason: they offer significant value to both the companies with the resources to build them, and the companies that would rather rent a cell than build a single-parent entity from scratch.  To learn more about Captive-as-a-Service with Boost, contact us.

A big part of Boost’s platform is MGA infrastructure, but many of our customers are also MGAs in their own right. So, what does it look like for a business that’s also an MGA to partner with us? MGAs generally work with Boost in one of three ways: white-labeling one of our insurance products, working with us to develop a new product, or rolling an existing book of business onto our platform. In this blog, we’ll take a look at all three. The first way MGAs work with Boost is to expand their insurance offering by white-labeling one or more of Boost’s existing products.  Boost offers a range of in-demand insurance products, including SMB cyber insurance, startup management liability insurance, pet health insurance, and more. These products are designed to be modular and highly configurable, so our customers can build the perfect insurance package to offer their customers. Boost’s insurance products are accessible through a simple API connection between our platform and our customers’ front-end. So what does this mean for MGAs? Three things: a high-quality product configured to complement their existing offerings, faster time to market, and complete control of the experience.  While numerous insurance businesses provide products available for partners to sell, traditionally these products have not offered much flexibility or customization. This means MGAs looking for differentiated insurance product offering have often needed to build what they want themselves - a very long, very expensive process.  Boost’s products, however, are designed in-house to be modular and highly configurable. MGAs who white-label with Boost are able to select the protections they want to offer from a range of optional coverages, and build a package that will complement the rest of their lineup at a price point that will be attractive to their specific target customers. While integrating with a traditional provider to offer their product can take a long time (and building a new product takes even longer), working with Boost allows MGAs to be in-market and generating revenue with a new LOB in a matter of weeks.  Boost’s insurance products are all preconfigured with our proprietary policy admin system, and all an MGA needs to do to get started is build an API integration between Boost’s PAS and their existing website or app. And since Boost’s API was designed to be developer-friendly, the integration process can be completed far more quickly than with a traditional insurance partner.  The third reason MGAs choose Boost as their white-labeling partner? Control. While Boost’s PAS handles the insurance transactions via the API, the end buyer’s experience is wholly owned by the MGA. No barely-customizable templates here - the MGA builds the exact front-end experience that they want to offer their customers, and Boost’s platform powers it. Buyers can digitally manage every aspect of their policy’s lifecycle, without ever leaving the MGA’s website or app. For MGAs that seek to offer new, innovative coverages for emerging risks, working with Boost can achieve their goals at a fraction of the time and cost required to build a new insurance program in-house.  Boost is the only outsourcing partner that can provide everything needed to create a new insurance program, under one roof. Traditionally, MGAs would need to manage a roster of specialized partner firms to produce the various pieces of a new program, as well as the complex project-management required to bring them all together. Instead, MGAs work with Boost to have every aspect of development, including forms, rating, underwriting guidelines, tech integration, reinsurance, and filing, handled by a single partner. The internal Boost insurance team has built 9+ products over the last few years, and we’ve put together a proven development process that enables us to get MGAs to market with new products on an accelerated timeline. Phase 1, Research and Proposal. The Boost team collaborates with MGA stakeholders to outline the scope of the product, create a product sketch, and iterate to a proposal that both companies can agree to. Phase 2, Product Development. Once the proposal is approved, Boost’s team will develop the forms and rates, create the underwriting guidelines, determine the program operations, design the claims workflow, and finally submit the product to reinsurance and fronting carrier partners. Phase 3, Technology and Product Filing. Once reinsurance and carrier partners approve, Boost will file the product in all applicable states, and configure the Boost PAS to support it.  Securing reinsurance capacity is usually one of the biggest challenges of building a new insurance. Partnering with Boost gives MGAs access to Boost’s dedicated panel of 12+ global reinsurers, plus the potential to self-insure some of the risk through Boost Re. Boost is also appointed by some of the most reliable fronting carriers in the United States, giving MGAs the peace of mind that their products will be sold on ‘A’ or ‘A-’ rated paper.   The third way that MGAs work with Boost is to roll an existing book of business onto Boost’s platform. If the MGA’s product is active and in-market, the process is similar to an expedited new build.  Boost configures the PAS to support the MGA’s product, and handles other tasks like refiling the product. Since the product is active, the product forms, underwriting guidelines, and other documentation is already complete, and so the process can move much more quickly than an entirely new product build. There’s a few different reasons why MGAs decide their book is better off with Boost, but the two biggest are tech capability, and capacity. Boost’s PAS is one of the most sophisticated in the industry, and supports end-to-end digital workflows and policy management. For many MGAs, this means the opportunity to move away from time-consuming manual processes and increase their efficiency with programmatic underwriting and all-automated workflows. Boost’s PAS also enables MGAs to provide the fast, convenient, all-digital transactions that their customers want (and expect). Rather than wrestling with trying to adapt legacy technology to changing times, MGAs who roll their books to Boost are able to leverage Boost’s API-based PAS to create modern, seamless customer experiences. MGAs looking to scale an existing product can move their book to take advantage of the Boost platform’s reinsurance capabilities. Boost’s dedicated panel of global reinsurers connects MGAs with risk capital, while Boost Re enables self-insurance through captive-as-service (CaaS). With CaaS, MGAs can access all the benefits of an insurance captive at dramatically lower cost and operational requirements. Learn more about how to leverage the Boost platform to grow your MGA’s offerings, or get in touch with an expert today.

For insurance carriers and agencies, a policy administration system is the most essential piece of their tech stack. Whether you’re an insurtech startup researching your first insurance policy admin system, or an established player looking to upgrade, this comprehensive guide will cover the most current options on the market. A policy administration system (PAS) is the system of record for every transaction related to an insurance policy. The insurance policy admin system supports all operations that can be taken on a policy or quote, such as rating, quoting, underwriting, document generation, document storage, billing, endorsements, cancellations, invoicing, and more. Whenever anything happens with a policy, the PAS records the transaction and takes any necessary action. This includes things like generating a quote based on information provided in an online form, modifying the policy’s coverage endorsements, or generating the appropriate documents for a new policy and facilitating delivery to the policyholder. Because the PAS is the technical underpinning for all-online insurance transactions, a robust PAS is essential to offering the convenient digital insurance experience that modern customers expect. If your business needs a new PAS, you have a few different options: you could build one yourself, buy a third-party PAS and the custom development work needed to use it with your offerings, or partner with an insurance-as-a-service company and integrate with their PAS. The biggest selling point for building your own PAS is the control. When you build your own, you have complete control over every aspect of the system, and you can determine how it will run. You have the freedom to customize the system to best suit your products and customer needs, and you can avoid the compatibility issues that you might have with a pre-built product. But that freedom comes at a cost.  Building a PAS from scratch is a very difficult and time-consuming task, with costs that run in the millions. Additionally, there are many details to consider that require nuanced expertise and ongoing attention.    The biggest challenge that developers face when building a PAS is state-by-state variances in insurance laws and regulations. When it comes to insurance, each state operates like a separate country. Insurance products must be approved in each state individually, and every state has its own requirements for how insurance products should be sold. This includes rates, underwriting guidelines, notifications, how policy documents have to be delivered to the insurer, and more.  In order for a PAS to function smoothly, it must be able to automatically identify and follow all applicable laws for the state a policy is sold in. Otherwise, your agents would need to manually check and set up each transaction in the system - which essentially defeats the purpose of having the PAS. This means that you'll have to build the legal requirements for each state you do business in into your PAS so that it can automatically enable compliant transactions. Here are a few examples of areas with significant state-by-state variation, that your PAS will need to account for:  For any policy life cycle event–like a quote, policy issuance, midterm endorsement, cancellation, or renewal– documents need to be generated and provided to the insured. For admitted-lines products, individual state requirements can get very granular on what information each document must contain, and even specify which fonts and font sizes can be used.  Once the documents are generated, certain states may also mandate how they can (and can’t) be delivered to the policyholder. When building your own system, you would need to take those different requirements into consideration, and build them into your policy administration system. If a customer doesn't pay their monthly premium, your PAS should give them a notice saying that their policy will be canceled. However, each state has a unique timeframe by which that notice has to be sent. In some states it’s as little as 10 days after an unpaid bill, in others it’s as much as 40 days, and there is a lot of variety in between. For your PAS to function legally, each state’s timeframe needs to be built into your system so that the proper notification is sent out at the right time required by each policyholder’s home state, and the policy cancellations are executed correctly. To top it all off, laws are constantly changing, and the requirements for documentation, cancellations, taxes, and billing–to name a few–are always evolving or being added. Keeping your PAS up-to-date, and legally compliant with each state you sell insurance in, means keeping up with contract and insurance laws in each individual state. This means building your own PAS requires more than just technical resourcing - you’ll also need ongoing input from insurance law and compliance experts in order to stay current.  Essentially, the work of building a policy administration system is never done. You have to keep checking for new state filings, rules, and laws so that you can build them into your system. Simply put, building your own policy admin system will cost you a lot of time and money. Building a PAS that supports one insurance product can take two to three years to complete, and several million dollars in development costs. As we’ve seen, however, the initial build is only part of the PAS equation. After your system is launched, you’ll still need to budget for regular maintenance and update costs. These will vary based on the changes you make to your products; every time you refile your insurance product, you’ll need to update your PAS to support the changes. If you never update your products, then this cost will be minimal. However, if you want your products to stay competitive, you’ll probably do it regularly. Adding or updating PAS features is another frequent driver of maintenance costs. If you have a multi-line business with more than one insurance product, the process becomes even more complex, expensive, and time-consuming. You would need to build a system that works for your most complex product and your simplest, taking all of their differences and intricacies into consideration. For businesses that specialize in a single line of business and don’t intend to expand beyond it, building a PAS in-house can be a good option to create a system well-tailored to their specific needs. For businesses that don’t fit that scenario, it can quickly become a large ongoing expense.  If you’re considering building your own PAS, it’s important to take these ongoing costs into account as you calculate the potential return on your investment.  If building a PAS isn’t in scope, a second option is to buy an off-the-shelf software system from a company that specializes in building policy administration systems.  There are several well-established companies that offer policy admin systems to insurance businesses of all shapes and sizes. However, the “off the shelf” label is a bit misleading. Deploying a third-party PAS isn’t as simple as adding to cart and installing software.  By definition, a third-party PAS is a generic piece of software, designed for use with any insurance company that buys it. What that means in practice, however, is that it’s not ready to use right out of the box. Before you can use a third-party PAS, it will need to be configured to support your business’s specific products and workflows.  When you buy a third-party PAS, the amount of time required to get to market depends on the amount of customization you need and the kind of experience you want to offer your customers. In general, however, it’s a good idea to budget around a year. You would likely kick off the process with a planning meeting to determine the scope of your needs. This includes issues like how many products your PAS will support (each product will need its own monthslong configuration), which specific products you offer and where you sell them, and whether you need any specific custom work from the vendor (for example, building a front-end to offer your products digitally). Once the contract is signed, the third-party company would adapt their baseline PAS to build a system to fit your specs, and integrate it into your existing systems and workflows. If you have a single product line and are willing to accept a customer experience that may not fully incorporate your brand (for example, taking customers to a differently-branded portal), it can take around six months to a year. For multiple product lines, your vendor will need to do a separate configuration for each, which obviously would expand the timeline. Similarly, a highly customized front-end experience will require significantly more time and labor to bring to market.  If you have specific goals like a mobile-first experience or integrating your PAS into your website, that will require working with an API. This means you’ll need development resourcing on your side as well, to create the integration between your systems and your vendor’s API. How long this takes depends on several factors, but one of the biggest is the quality of your vendor’s API. If their API is low-tech or otherwise difficult to work with, it will negatively impact your developers’ timeline. The total cost of buying an off-the-shelf PAS will depend on your vendor’s pricing model. The more traditional vendors tend to charge per-year service costs for building out and maintaining your PAS. These costs can be quite significant; some vendors’ prices start at $400,000 annually, with the potential to increase exponentially with any customization needs. Rather than a large fixed yearly rate, newer vendors tend to charge a relatively low baseline platform fee, and then take a percentage of your gross written premium. Depending on your volume of business, this can be a more affordable option for companies that want to buy off-the-shelf. However, keep in mind that you’ll still need to pay a separate cost for the customization work to enable the PAS to support your products, and the managed services to build and implement. These indirect costs can sometimes be quite substantial, so be sure to ask questions about what you’ll need and get the full picture before making your decision. A third option is to partner with an insurance as a service company. This is a bit different from the other two options, as an IaaS partnership goes beyond just using your partner’s policy admin system. Insurance as a service (IaaS) provides the whole solution necessary to support an insurance program. This includes a tech-forward PAS but also includes things like operational infrastructure, regulatory compliance, the insurance capacity needed to sell policies, and insurance products that can be white-labeled and sold under your brand.  When you partner with an IaaS provider, you’ll select which of their products you want to offer your customers, then integrate your website or app with your partner’s system via API. This offers insurtechs a significantly faster and lower-cost path to expanding their insurance product offerings than building a new insurance program themselves.  From a technology perspective, the PAS is provided as part of the IaaS provider’s standard solution. An IaaS provider’s PAS will only work with that partner’s products. An insurance as a service PAS offers some considerable speed advantages vs. building a PAS yourself or buying a third-party system. Since the system will already be configured to support your partner’s white-label insurance products, there will be no need for the time-consuming development work required to build product workflows or customize an off-the-shelf PAS.  This is particularly beneficial when expanding your product offerings. If you wanted to add another insurance product to your lineup, you could simply select the product you wanted from your partner’s available portfolio, make a few modifications to your existing API connection, and begin selling a new insurance line within a few weeks. However, there is still some initial development work required. You’ll need to build the connection between your digital front-end and your partner’s PAS, using their APIs. The good news is that insurance-as-a-service systems are designed for this, and so their APIs tend to be well-documented and easy to use. With a small development team and a high-quality partner API, you should plan for this step to take 3-6 months. The actual API integration itself usually accounts for about a month of development, with the rest of the time spent building the front-end to transact with the consumer.  Because the PAS is included as part of an insurance-as-a-service offering, the cost structure differs from build or buy. When you work with an IaaS partner, you will pay them a commission for sales of their product, and usually also a platform fee for using their service. The PAS will be included in these standard costs, with no special purchase or subscription required.    Another major savings point with IaaS is maintenance. As we saw earlier, a PAS is never really “finished” - in order to stay fully functional, it needs to be continually updated with the latest state regulations. A major selling point for IaaS, however, is that the insurance backend is essentially taken care of.  This includes keeping the policy admin system up to date - your IaaS partner is responsible for staying on top of compliance developments and ensuring the PAS continues to meet all regulatory requirements. With a good IaaS partner, these changes should happen in the background without any need for your involvement. New state requirements or product updates should simply be there when you use the PAS. The most significant cost of integrating with an IaaS partner’s policy administration system will likely be paying your development team to build the API integration and front end. The cost for this can vary depending on if you plan to use in-house resources or an outside development firm. As we saw previously, the majority of the time (and thus expense) necessary for this step is related to building the front end, so your costs will also vary based on the scope and complexity of what you intend to build.   The policy administration system is a complex but critical system for any insurance company, and acquiring a new one can be a major project. Consider your budget and timing needs, as well as how to manage ongoing requirements, when deciding whether to build a system in-house, buy from a third party or integrate with a partner who’s already done the heavy lifting.   If you want to learn more about insurance-as-a-service through Boost, get in touch today.

Big news for Boost today: we’re excited to share our partnership with Amwins Program Underwriters, part of Amwins Underwriting Division. We recently helped Amwins launch enhanced, technology-enabled versions of two longstanding Lawyers Professional Liability (LPL) programs, and relaunch a third.  Amwins leveraged our MGA platform to modernize and enhance their LawGold, Firemark, and Attorney’s Select programs with more-scalable digital infrastructure. The programs each provide different coverages for law firms with 1-40 attorneys, including both admitted and non-admitted solutions. The updated versions feature streamlined, programmatic underwriting guidelines and all-automated digital workflows, which eliminate former manual processes and help increase overall efficiency. We’re also providing Amwins with end-to-end program administration, A- rated paper, and reinsurance capacity (the first new programs to launch with our expanded capacity pool).  While none of the LPL programs were “new,” the process for significantly updating an existing insurance program shares some commonalities with building a new program from scratch - which is something of a specialty for Boost. Because we already had the pieces for new program development in place, we were able to get the updated versions ready for market on an accelerated timeline. Amwins is a market leader for specialty insurance, and we’re excited to help them scale these already-successful programs to even bigger heights. We also look forward to working with Amwins to address new needs and opportunities in the insurance market. More innovation in what insurance can offer? That’s a win for everyone.

For many new parents in the U.S., getting the time off to care for their new child is fraught (and for some parents, simply not possible).  Unlike most other countries in the world, the U.S. has no national requirements for paid parental leave, and so parents are left to navigate a patchwork of options that can vary widely by location and employer. Out of the options above, short-term disability is the most widely available, and the most commonly used solution for paid parental leave. One big problem: in most cases, it’s not available to new dads. Excluding fathers from parental leave isn’t just unfair - it’s increasingly out of step with U.S. families. The average amount of time U.S. dads spend caring for their children has Invalid Link, and fathers now make up Invalid Link.  Dads’ expanded role as caregiver is reflected in changing social attitudes as well. In a 2023 survey Invalid Link with the statement that children are better off when both their mother and their father are equally focused on work and childrearing. Research has also shown a link between taking paternity leave and Invalid Link for the family. So, how can businesses support their employees who become fathers, without breaking the bank? Parental leave insurance is designed to make it affordable for SMBs to offer paid parental leave to their employees.  Parental leave insurance is a commercial insurance program; like other types of commercial insurance, the SMB gains coverage by purchasing a policy. The SMB can choose the level of benefit they want to offer their employees, including things like length of leave and percentage of salary covered, and then pay a regular premium based on the selected benefits and the demographics of their employees.  When a covered employee takes parental leave, the SMB can file a claim through their parental leave policy to be reimbursed for the cost of paying the employee during the covered leave period, as specified in the company’s parental leave policy.  Parental leave insurance is a much more inclusive option than STD. Boost’s product, for example, will cover paid leave for any new parent, regardless of whether they are actually giving birth. This includes not just fathers, but also foster and adoptive parents (who are generally also ineligible for STD).  With parental leave insurance, SMBs can offer equal maternity and paternity leave benefits. Not only does this acknowledge and support the role of new fathers in caring for their children, it also empowers families to choose leave that is right for them, instead of making the best of whatever they can cobble together. A parental leave insurance policy benefits the business as well as the employees: Lower expenses. Funding a paid parental leave program requires a business to try to forecast how many employees might take leave in a given year, set aside money to cover those potential costs, and sometimes pay an extra temporary employee to fill in while the parent is out. Buying parental leave insurance means much lower costs overall to providing this benefit.  Predictable costs. One of the more challenging aspects of self-funding parental leave is the uncertainty: it’s impossible to actually know how many employees will become parents in a given timeframe. This means costs can vary wildly from year to year. With parental leave insurance, these unknown expenses are replaced by a regular, predictable premium payment, making it much easier for the SMB to budget around it. Talent attraction and retention. Highly valuable employees are often in hot demand, with many companies competing to hire them. As we’ve seen, paid parental leave is a very desirable benefit, and offering it can help an SMB differentiate themselves as a great place to work. It also helps retain top employees if they become parents. In Invalid Link, many reported that “they felt more motivated after taking leave and that they were considering staying in their organization longer.” For insurtechs and other businesses that work with SMBs, offering parental leave insurance provides your customer with an affordable path to supporting (and retaining) their employees who become parents, regardless of gender.  Interested in adding parental leave insurance to your offerings? Get in touch today.

A big reason that businesses choose Boost is that we can help them launch scalable, profitable insurance programs much more quickly and cost-effectively than the alternatives. In this blog, we’ll explore the time and cost requirements for using Boost to develop a new program vs traditional build or buy, and how Boost is able to offer a better option. We’ll break it down by the three main components you need for a new program: the MGA infrastructure to support it, the new product itself, and the distribution technology to sell it online. The first step to developing a new insurance program? Being legally permitted to do so. And if you want to create your own product versus just selling someone else’s, your company needs to be an MGA. In this section, we’ll look at the cost and requirements for building a new MGA. There are two big requirements for building your own MGA: hiring the right people, and securing the right partnerships. On the hiring side, you’ll need to build an organization to run a full-stack insurance business. This includes everyone from underwriters to claims administrators to compliance managers to regulatory experts. As you might imagine, this is a significant, ongoing resource commitment, particularly for positions requiring experienced senior employees. On the partnership side, you’ll need to build relationships with reinsurers and other risk capital providers, and with fronting carriers who will allow you to write on their paper. This can be difficult, especially without existing connections. Total estimated cost: $5 million Total estimated time: 2 years When creating an MGA, there’s actually not much difference between building and buying.  You can contract with qualified professionals instead of hiring directly (like using a licensed third-party agency for handling claims instead of building an internal claims team), and work with consultants that specialize in other MGA requirements, but you’ll still need to do a lot of the same things that we saw in the build section. The most important and challenging pieces, like the reinsurance and fronting carrier partnerships, can’t be bought. Total estimated cost: $5 million Total estimated time: 2 years Boost has already invested the time and money in building a robust MGA infrastructure to support our customers’ insurance programs, including:  When you work with us, you can leverage our already-existing infrastructure to get what you need to support your insurance programs right away, for an annual platform fee.  Total estimated cost: $150,000 annually Total estimated time: Immediately available The core of a new insurance program is the product itself: the coverages you’re going to offer, the risk capital to back them up, and the administration to support its operations. In this section, we’ll look at what it takes to create a brand new insurance product from scratch. If you choose to build your product from scratch in-house, you’ll need to hire experienced people to do everything mentioned above, including: Additionally, you’ll need to secure capacity for your product. This is often harder than it sounds, especially if you don’t already have relationships in place with risk capital providers. Particularly in the current economic environment, convincing reinsurers to commit financial resources to insuring a new, unproven risk can be a long, difficult journey.  Total estimated cost: $8 million to set up, with $2 million annually to maintain Total estimated time: 5-6 years If you go the “buy” route for developing your new product, you’ll need to contract out to a number of partners to get what you need, including: Each partner will deliver their piece of the puzzle, but it will be up to you to assemble the pieces and ensure everything happens as it’s supposed to. You’ll need to invest resources in project-managing a complex multi-year, multi-partner project. Additionally, some partners’ contracts may include ongoing fees, or a certain percentage of the product’s GWP. Total estimated cost: $5.8 million + 1% of GWP Total estimated time: 3-4 years If you choose to partner with Boost to create your product, you’ve already streamlined the process considerably. Boost can provide everything you need to build and launch your new insurance program under one roof (in fact, we’re currently the only partner that can).  Boost’s in-house team of insurance experts will work with you on market research and scoping for your opportunity, then develop a product sketch for how to address it. Once you and Boost have agreed on what the new product should look like, our team will get to work developing the forms, guidelines, and other program documentation. They’ll also help you design the program’s operations and claims workflows. When the product is ready, Boost will submit it to our panel of reinsurance and fronting carrier partners. Once we’ve secured paper and capacity for your product, our compliance specialists will start the filing process with the states that you intend to sell in. Total estimated cost: $400K Total estimated time: 4-7 months Modern buyers expect convenient, all-digital purchase experiences, and delivering those experiences requires a policy administration system (PAS) with the right capabilities. In this section, we’ll look at options for acquiring a PAS that can support end-to-end digital workflows. A PAS is a very complex piece of software, in no small part because of varying insurance regulations between each state. To function smoothly, your PAS will need to automatically identify and follow all applicable laws for the state a policy is sold in. This includes areas such as:  The time and difficulty of building a PAS also increases with each additional insurance line that it must support. If you build in-house, you’ll also need to plan for regular updates and maintenance to the software, and ensure your organization has the necessary resourcing in place. Total estimated cost: $2 million annually Total estimated time: 1-2 years If you opt to buy the technology you need, the cost will vary by PAS vendor pricing, and also by the amount of development work necessary to customize an off-the-shelf PAS to support your product and workflow needs. Traditional vendors often charge per-year service costs for your PAS buildout and subsequent maintenance. Newer vendors tend to forgo the large fixed annual rates, and instead collect a relatively low baseline platform fee along with a percentage of your gross written premium. In many cases, however, you’ll also need to separately arrange and pay for the custom dev work to configure your PAS for your products. Total estimated cost: $250k + 1% of GWP Total estimated time: 6 months to customize/implement Boost’s state-of-the-art PAS is at the heart of our platform, and is pre-configured to support all Boost products. The annual $150,000 Boost platform fee includes access to the PAS - just integrate with your front-end via API, and you’re ready to get started selling your Boost-powered insurance product.  The Boost API was built from the ground up to be easy for developers to build to and implement, reducing deployment times vs. complex legacy software. This includes a design that leverages RESTful patterns, comprehensive API documentation, and permanent access to a dedicated testing environment, at no additional fee. Total estimated cost: Included in the platform fee Total estimated time: 4 weeks deployment Considering if a new insurance program is the right move for your business? Learn everything you need to know with our free ebook How To Succeed with a New Insurance Program. And if you’re ready to get started with Boost, get in touch today.