December 29, 2023

Meet Arch’s New Program Management Vertical

Insights Canada

This article originally appeared in Insurance Business Canada.

Arch Insurance is taking its programs capability in a new direction.

First and foremost, Arch is an underwriting company. But about a year ago, there was a recognition that it needed to change how it did business.

“We realized with all of the different competing priorities for underwriting teams on a daily basis, there may be a better way to achieve everything we need to and also remain focused on the key priorities — so we decided to split the department into two verticals,” said Jeff Robinson, vice president of programs.

“The underwriting vertical remains the lead on the day-to-day underwriting decisions and managing our partnership relationships, while the program management vertical supports the team by handling audits, wording changes/updates, and program analysis and segmentation.”

The decision to create the two verticals was made in the summer of 2022.

Financial Strength Ratings

A+   Standard & Poor’s, A.M. Best Company
AA-   Fitch Ratings
A2   Moody’s

Robinson, who has been with Arch for about a year, joined around the time that the two verticals were really starting to come on stream.

“I really like that we divvied it up and have two separate teams [each] with a very specific focus,” Robinson said. “I don’t think many markets are doing that in the industry, and I think it can be an advantage for us as it allows us to manage the day-to-day actions and at the same time creates understanding of trends that can help us improve and make changes to a program.”

I like partners who go not on the journey, but on the odyssey with us.

Erin Macdonald, arch insurance

Robinson has led commercial underwriting teams in the past, and has seen how underwriters can be taken away from their core tasks to deal with audits, training, analysis, etc. The change has also proven to be a boon for employees looking to move to the vertical that appeals more to their passions and talents. The underwriting team also takes the lead on day-to-day matters with clients, but program management can add value to the relationships with clients by bringing data to clients’ attention and encouraging action on their part.

“That two-pronged approach is not being done in the industry very often, so it’s an advantage,” said Robinson. “The program manager vertical allows us to detect jumps in the market, to hear the voice of the customer and create unique solutions to support our partners. This information is shared with our broker and MGA partners, who in turn can add value for their insureds.”

By making life easier for the underwriting team, there is a knock-on boost for brokers and MGAs, too.

Arch has brought some new talent on board, mixed with some more veteran team members, to bring about the change.

Kimberley Quon is the head of programs, underwriting, who has been with Arch for about seven months, and was attracted to the company because of the current leadership team, its recent growth, and “the direction in which they were headed,” she said. “I was excited to bring forth my expertise and to help grow this department.”

Robinson, having been part of large organizations in the past, agreed that being part of a smaller team has meant sharing the success, as well as “the opportunity to bring us to the next level.”

Core fundamentals were another important draw for veteran Macdonald.

“There are three cultural makeup behaviors that speak to who we are in relation to the program management vertical – be meticulous about the details, be relentless about improvement, and be open-minded and embrace innovation,” said Macdonald. “These behaviors are core to the way we approach the business with which our program managers and MGAs support us.”

When Macdonald first arrived at Arch, the programs department was “very small,” with only two underwriters. But that was seen as an opportunity for growth, and Arch has grown significantly in the past four years.

“You have to be agile, and you have to be able to adapt quickly,” Macdonald said. “Looking back on it now, it’s like, ‘Wow, we actually did accomplish something,’ as opposed to just rowing the boat.”

To Macdonald, Arch is not afraid to take on ventures and dive deeper into segmentation studies so that sound underwriting decisions can be made. From risk selections and appetite formation to limits and rate development, the program management vertical is already disseminating data to empower decision-making.

Arch Insurance’s Businesses

  • Arch Insurance Canada: A commercial property casualty insurer. The company provides specialty products through an exclusive distribution network, serving global clients based in Canada.
  • Arch Insurance (United States): Provides a wide range of property, casualty, and specialty insurance for corporations, professional firms, and financial institutions across the U.S.
  • London Market: Arch’s Lloyd’s Syndicates and Arch Insurance (UK) companies underwrite more than 20 classes of business.
  • UK Regional Division: This division provides specialized insurance solutions for a range of UK businesses. It focuses on commercial property, motor, financial, and professional lines, personal accident and travel, and a range of risk management and associated professional services.
  • Arch Insurance Australia: Provides specialized insurance solutions across both corporate and commercial market segments. Its product lines include financial, property, casualty, and accident & health.
  • Arch Insurance Bermuda: Provides specialty casualty, executive assurance, and professional liability insurance on an excess basis for large commercial and financial companies globally.
  • Arch Insurance (EU) dac: A provider of specialist property and casualty solutions to a broad spectrum of companies and institutions.

That two-pronged approach is not being done in the industry very often, so it’s an advantage.

jeff ROBINSON, arch insurance

What Does Arch Look For in an MGA Partner?

The team-centred approach at Arch goes beyond the internal team, and is a focal point of its external partnerships, too. Arch looks for MGA and broker partners that are well-established in the Canadian market, with a proven track record of profitability and transparency.

“I believe that the only way to do business is to be transparent,” said Quon.

Another important part of a distribution relationship is for a partner to have strong expertise in a certain class.

Analysis of pricing, as well as data sharing, is another component of that strong relationship.

“I like partners who go not on the journey, but on the odyssey with us,” Macdonald said. “We want long-term partners.”

Post-Change Success Stories

The two verticals are working well together, and from a team perspective are achieving their goals on a regular basis. Robinson himself has seen, working with some partners who have really good underwriters, that “there are ways that we can adjust what we’re doing to garner better program results. We’ve seen a couple of examples of that lately,” he said.

Another success story was with a large partner who had a renewal and did not accept the rate increase that they needed. Through segmentation and outlining some of the things that were going on, especially when it came to water-damage coverage, Arch illustrated for the client that the changes needed to be made, and Arch worked with them on different options and coverage levels. These changes will help continue to keep the program profitable on a long-term basis, which is good for all parties involved.

Macdonald said that he was confident about Arch’s future because “honestly, I don’t think we have a choice not to be successful. We have to embrace innovation and technologies,” such as AI, which will allow the team to slice and dice data for even more informed decisions on, for example, cat modelling and forecasting. Technology doesn’t stop evolving — and Arch won’t, either.