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The specialty insurance market is steeped in tradition that has influenced its working ways ever since those early days. It’s this history that has made London one of the world’s best and most experienced markets for specialty risks.
But the digital revolution and the rapid take-up of AI have the potential to re-shape many industries. The insurance markets are no exception; these technologies will have a profound impact upon the way that risks are underwritten.
The creation of Ki — a digital underwriting platform for the Lloyd’s market — was first announced in May 2020. The aim was to significantly reduce the amount of time it takes for brokers to place their follow capacity, after arranging lead terms for specialty risks. The solution: building an algorithm, developed with support from University College London (UCL), to underwrite risks and automatically quote for business through an always-available digital platform, built with Google Cloud.
Brokers log in to the Ki platform, fill out some details about the risk and can instantly generate a follow line, in as little as 10 seconds. The algorithm behind the platform underwrites the risk and determines how much capacity to offer to that risk.
To deliver this innovation, a first for the London market, Ki raised USD500M of committed capital from two backers, Blackstone and Fairfax.

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Ki launched the platform towards the end of 2020, ready for risks incepting from January 1, 2021. Initially the capacity offered was from Ki’s own Syndicate 1618, which was the first digital syndicate on the market — and which quickly became one of the largest start-up syndicates in the history of Lloyd’s. In 2024, the platform expanded to offer capacity from other Lloyd’s Syndicates including Aspen, Beazley, and Travelers. This meant that Ki has not only revolutionized the speed of underwriting risks, but also the way brokers can access significant volumes of capacity, helping them efficiently cover risks for their clients.

<h3>Underwriting risk in less than 10 seconds</h3>
Ki, at its very heart, is an underwriting business. But its unique feature is the way that the algorithm works together with human underwriting expertise to create one of the market’s fastest, most consistent underwriting processes. A quote can be offered to a broker within around 10 seconds of them inputting the risk information into Ki’s platform — a far cry from the two- to three-week lead time common in the market
Ki’s algorithmic underwriting strategy is based on two core concepts: it is data-driven, and technology enabled. Specialty insurance is inherently complex, with subtle nuances. To accommodate this, Ki’s algorithmic strategy sits alongside its wider underwriting strategy. 
In 2023, Ki wrote USD877M in gross written premium, delivered a combined ratio of 89.7% (a nearly 7-point improvement on 2022), and USD101M of profit. This strong performance, in only its third year of trading, validates Ki’s approach to digital underwriting.
<h3>
Why is algorithmic underwriting good for insurance?</h3>
Algorithmic underwriting is beneficial for the insurer, the client, and those who artfully curate coverage — the brokers.
<h4>
For insurers:</h4>
Data-driven approaches are consistent and focus solely on the relevant information to evaluate the risk. They are not swayed by personal observation, preference, or bias. And the offer of follow capacity can be as bullish or conservative as the data tells you to be.
As a software system, Ki’s underwriting algorithm can evaluate multiple data points simultaneously for a fast, robust, and accurate underwriting assessment. The algorithm can also be pressure-tested against a variety of conditions, such as natural catastrophes and market cycles. This is much harder to do using human underwriters.
Auditing and optimizing are much easier with an algorithm and digital approach, helping to refine and improve continuously.
Scalability is another huge benefit. Ki’s model is more flexible due to its end-to-end automation made possible by algorithms, allowing it to adjust smoothly to both soft or hard market conditions. 
And importantly, Ki’s underwriting algorithm can also incorporate a diverse set of data points from within and outside the business, ranging from portfolio data at the point of quote to property characteristics derived from satellite data on individual properties. This allows Ki’s underwriting to be both accurate and efficient.
<h4>For brokers and clients:</h4>
Because of the accuracy and continuous optimization of the algorithm, Ki can offer increased line sizes and open up capacity across the portfolio in less risky geographies or classes to offset higher-risk policies.
The firm prides itself on being easy to work with. The platform is available to brokers 24/7 and ready to quote consistent and reliable follow capacity from four Lloyd’s of London syndicates — Aspen, Beazley, Ki 1618, and Travelers.
Brokers are offered follow capacity for eligible classes every time, as long as one condition is met: a &#8220;nominated syndicate&#8221; is on the slip. A nominated syndicate is a Lloyd’s syndicate that Ki recognizes as a leader in its respective class of underwriting.
For brokers and clients alike, certainty of renewal is attractive, particularly when facing challenging market conditions. And if you compound that with increased capacity being available when policies come to renew, in most cases, Ki is a sustainable partner for a long-term mutually beneficial relationship.
Ki brings significant efficiencies to brokers with its fast response times by providing them robust follow capacity underwriting with minimal involvement on their part, so they can focus on the lead placement and negotiating (coverage, cost) on behalf of their clients.
<h3>The technology</h3>
Using data to understand risks isn’t new, but what is new is the access to cutting-edge data science and machine learning. And at Ki, a healthy dose of specialty market expertise is added to create something truly unique that is tailored to the market dynamics at any given time.
From its very beginnings, when Ki collaborated with leading academic talent from UCL, the company’s proposition has been powered by cutting-edge algorithmic science. The Ki algorithm of today is enabled by more than 50 Machine Learning (ML) models and maintained and iterated in-house by a multidisciplinary team. And as mentioned above, it can draw in data from a wide range of internal and external sources.
Ki also uses Large Language Models (LLMs) to help structure the vast quantities of data locked in policy and claims documents. This is now being leveraged to provide richer data sets for its ML models.
Ki, and its diverse and talented teams, are committed to continuous innovation and often contribute to academic research, for example, by recently publishing research on simulating the specialty insurance market.
<h3>The future of algorithmic underwriting</h3>
There’s a huge range of opportunities for algorithmic underwriting, from small efficiencies across the value chain to further disrupt traditional processes and enhance the human expertise that will still be important to have. As algorithmic underwriting gets more sophisticated, it will allow an insurer to holistically manage a portfolio across classes at the point of quote. This is difficult for human led syndicates to deliver because of the disparate nature of their data sets, people, and processes. Making better individual risk selections will have a positive impact on the loss ratio, resulting in a portfolio that’s well balanced and profitable.
Utilizing LLMs to tap into the vast pool of unstructured data available in insurance will provide a huge informational boost to algorithmic underwriting and portfolio management. LLMs will also replace notoriously time consuming, repetitive tasks such as wording reviews and will allow process-heavy work to be streamlined, making it more accurate and more efficient. Ultimately, all of this will reduce expenses and improve an insurer’s combined ratio.

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Mark Allan

There’s additional value to unlock for brokers, clients, and insurers by using technology. At Ki, we’ve focused on revolutionizing the follow capacity placement, but we are open minded to where else our technology can be beneficial to the market, and we are exploring this with our partners. And of course, data. Data is powerful, and it’ll become imperative to leverage AI, arming brokers with analytics, allowing them to make data-led decisions with their clients.

<h3>The Ki difference</h3>
While algorithmic underwriting underpins Ki’s proposition, the company balances and complements this with an expert understanding of the market. Ki’s underwriting approach is powered by technology, but it’s overseen and perfected by people who are specialists in insurance, who bring an understanding of events not in the data’ and of the real-time market dynamic shifts that occur. Ki’s teams are a blend of technology and data talent, working collaboratively with more traditional insurance roles such as class specific underwriters, account management, and business development to build relationships in the market.
It&#8217;s a unique approach in the market with a truly scalable proposition rooted in underwriting discipline and a digital-first environment.
This article was created for <a href="https://www.ajg.com/gallagherre/news-and-insights/2024/august/global-insurtech-report-q2-2024/" target="_blank" rel="noopener">Gallagher Re&#8217;s Global InsurTech Report</a>, August 2024.

Lloyd’s of London and Ki Insurance: Transforming a 336-year-old market

Future of AI in underwriting

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Award acceptance

Ki was set up to pioneer the digitisation of the Lloyd&#8217;s market, and through the dedication and expertise of our team, we&#8217;ve created a truly scalable proposition rooted in underwriting discipline and a digital-first environment.
Ki is delighted by this recognition and will continue to drive forward innovation for, and with, the market.
Photo &#8211; Mark Allan, CEO and Alan Tua, Director of Algorithmic Underwriting.

Most Innovative Insurer 2024

Kelly joined Ki in January 2024 and her focus is on building a high performing people team and function that is focused on creating an environment where the Ki team can do the best work of their careers. A people team that acts as enablers, architects, facilitators, and drivers of change &#8211; and is set up to support Ki on its growth journey. 
Prior to joining Ki, Kelly has had a variety of leadership roles in the financial service and insurance sectors with brands like Direct Line Insurance, the Bank of England and the Financial Services Authority as well as roles in other sectors such as retail. 
On joining, Kelly says ‘I’m really excited to be working at Ki during this pivotal phase of its development and there’s a lot going on! Ki’s culture and the unique combination of skillsets from both insurance and tech backgrounds is what gives us our edge. We are building something truly amazing, and I joined to be part of that’.

Ki brings on Kelly Madeley as Director of People

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Kelly joins Ki

As General Counsel and Compliance Director, Jo is responsible for building and leading the Legal, Compliance, Internal Audit and Company Secretarial teams.
The General Counsel acts as a trusted adviser to Ki’s CEO, Mark Allan, the Executive team and the Ki Board, finding solutions to help Ki continue to disrupt by using technology and data, in a responsible and sustainable way. 
Jo has spent most of her career working in insurance, first as an insurance and reinsurance litigator at law firms Eversheds and Clyde &amp; Co, before moving into the general insurance market. There Jo worked for Hiscox Syndicate 33 and US insurer ACE (now Chubb).  Her next career move took her into the world of life assurance, when she became General Counsel at FTSE250 Just Group, before spending several years outside insurance working as Chief Legal &amp; Governance Officer and Company Secretary at another FTSE250, the global trading fintech IG Group.  As a member of Executive Committees and Executive Risk Committees, Jo has led global Legal, Compliance, Company Secretarial and Internal Audit teams through periods of intense growth and change, advising Boards and their Committees, as well as Executive management, on governance, legal and regulatory issues.
“I was attracted to Ki by its incredible success disrupting the uber-traditional Lloyd’s of London insurance market” Jo commented about her arrival at Ki “as well as its deep appreciation of the importance of the business partnering functions in my world in continuing to build on that success. My experience in both the insurance and fintech worlds gives me the ideal skillset to help Ki to fulfil its potential”.

Ki recruits Jo Nayler as General Counsel and Compliance Director

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Joanna joins Ki

Jan’s role will centre around leading the growing financial function for Ki as well as being a key driver across transformation projects that will shape the strategic direction of the business.
Previously to joining Ki, Jan garnered a wealth of experience in financial services businesses across the globe. Most notably he spent 20 years with Fairfax, Ki‘s lead shareholder, including 14 years as Chief Financial Officer for the Odyssey Group.
Jan feels that “Ki&#8217;s unique value proposition is a once-in-a-lifetime chance to help shape the strategic direction of a business with seemingly endless possibilities. I find the culture at Ki to be very special. The positive atmosphere is contagious and inspires creative thinking, something I believe is critical to our success”.

Ki welcomes Jan Christiansen as Chief Financial Officer

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Jan joins Ki

Lisa will be responsible in bringing together the actuarial talent within Ki, to form a new actuarial function, core to any successful insurance company. The function will focus on traditional actuarial activity such as reserving and pricing, but there will also be a strategic Corporate Actuarial team, to support performance analysis and profit driving strategic topics.
To fulfil her appetite for new learning experiences and challenges, Lisa has held various roles across her career both in traditional and non-traditional Actuarial roles. And unusually, Lisa started her career on the underwriting side in Energy before making the leap into Actuarial, working across all lines of business in the Lloyd’s market, both direct and reinsurance.
Lisa comments “There is so much about Ki that from the start I have found intriguing and exciting from the outside looking in &#8211; the way Ki has challenged how a traditional Lloyds market can transact business, utilising innovative tech solutions, and most importantly the incredible people and partnerships with the likes of UCL and Google. There was no doubt in my mind that I wanted to be part of this continuing journey, having already seen a monumental growth trajectory to date. I was excited to join Ki to build out a forward-thinking Actuarial function in a culture of “how can we do it better”.

Lisa Renton joins Ki as Actuarial Director

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Lisa joins Ki

2023-results

2023 results

2023 was a year of transformation for Ki 1618. Not only did we deliver 5% growth and a strong financial performance, we introduced an exciting new trading platform providing brokers with easy access to additional capacity.
Our first few years of trading saw significant growth and we’re pleased to see that in 2023 the demand for our platform continued to increase. We also expanded the capacity offered on our platform through the launch of partnerships with <a href="/news/ki-announces-partnership-with-travelers-and-aspen-to-expand-digital-follow-capacity/">Travelers and Aspen</a> in December 2023. The addition of <a href="/news/ki-announces-partnership-with-beazley/">Beazley’s</a> capacity in April 2024 further enhances the value proposition to the broker community at Lloyd&#8217;s.

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COR results

Overall, we are delighted that the 2023 COR for Ki 1618 is 89.7%, an impressive 7.1ppt improvement on 2022. This is an outstanding achievement for a syndicate in it’s third year of trading. A strong underwriting profit validates our unique approach to underwriting and digital fast-follow.

The world continued to see and experience both natural and human-driven disasters in 2023. The war in Ukraine continued and we also saw the resurgence of conflict across the Middle East region. And in parallel, we saw earthquakes, hurricanes, wildfires, and widespread flooding. It’s events like these, when insurance demonstrates its value and makes it all the more important to carefully manage our exposure to create a portfolio that is resilient. Our underwriting profitability has improved year on year with reductions in both the attritional and catastrophe loss ratios. 2023 was relatively light on catastrophe claims but we did experience some major losses in relation to the Hawaiian wildfires and Hurricane Ida with a combined loss of $20.0m. The net impact of these events was managed through our reinsurance programme and, alongside the increases and reductions in prior year loss estimates, contributed 5.8% to our combined ratio. The combination of continued growth and profitability is an endorsement of Ki’s digital, data-driven model. Included in our claims ratio was an increase in prior year reserves primarily driven by Winter
Storm Elliott losses and contributing 2.7% to the claims ratio in total. Ki 1618’s core proposition and focus on expense efficiency continues, with a total expense ratio of 30.8% (2022: 31.8%) a reduction on prior year, while increasing headcount to accelerate the introduction of new operating models and enhance service quality.
Speaking of evolving, at Ki we’re known for innovation and pushing the envelope. And what we’ve delivered in 2023 has been no different. We achieved another major milestone which saw us transform to become the first algorithmic underwriter in the market to offer additional capacity from multiple syndicates. This additional capacity was set up in 2023 for business incepting after January 1st, 2024. This has, in essence, created a ‘Lloyd’s Digital Follow’ marketplace, a truly scalable proposition rooted in underwriting discipline and a digital-first environment. This evolution was the result of collaboration across the whole business to deliver the capacity, operational and technology capability required to launch this exciting new operating model and platform with our first partners, <a href="/news/ki-announces-partnership-with-travelers-and-aspen-to-expand-digital-follow-capacity/">Aspen Digital and Travelers</a>. The power of combining the expert knowledge of our commercial and underwriting teams, with the creative, disruptive mindset of our technology team will set us on a new growth trajectory for 2024 and beyond.

Ki Syndicate 1618's results for 2023

2023 Financial Results

Ki, the digital and algorithmically driven Lloyd’s follow platform, is delighted to announce a partnership with Beazley which will include Ki offering additional follow capacity from Beazley syndicate 2623/623 through its digital platform from 2 April 2024.
This is another major milestone in Ki’s journey to simplify and digitise the follow market. Ki has grown significantly since its launch in 2021, expanding its capacity and line size each year. Today’s announcement will bring further value to brokers and their clients, accelerating the adoption of digital follow across the London market.
The capacity will be available across Ki’s open market classes of business in the Property, Casualty and Specialty divisions, delivering a more efficient means through which brokers can complete placements in Lloyd’s.
With Beazley joining Aspen, Travelers and Ki Syndicate 1618, brokers can now access capacity from four Lloyd’s syndicates on the platform.
The multi-year partnership with Beazley, alongside the existing multi-year partnerships with Travelers and Aspen, and growth plans for Ki Syndicate 1618, will see Ki materially increase the follow capacity it is able to offer in 2024.
Mark Allan, CEO of Ki, said: “We are delighted to launch our partnership with Beazley by adding their capacity to the Ki platform. Our vision is of an efficient digital follow market in Lloyd’s and the potential for technology to shape the future of our market. Ki’s partnership model and approach to algorithmic underwriting will accelerate the adoption of digital follow in Lloyd’s.”
Adrian Cox, CEO of Beazley, said: “We are pleased to be partnering with Ki and learning more about the capabilities of follow only algorithmic underwriting for open market business, having been an early mover in the follow market for facilities and consortia via Syndicate 5623. As a market leader we believe automatic-follow solutions bring welcome efficiency to the expertise-led underwriting for which our marketplace is rightly known.”

Ki enters partnership with Beazley, significantly expanding Ki’s digital follow capacity 

As part of this significant strategic milestone, Ki will become the first algorithmic underwriter in the market to offer additional capacity from multiple syndicates. The capacity will be available across Ki’s open market classes of business in the Property, Casualty and Specialty divisions. Ki’s brokers and clients will continue to benefit from its efficient digital platform and immediate response to quote requests, with the platform also facilitating follow capacity offers from the partners alongside the existing Ki 1618 line.
The multi-year partnerships with Travelers and Aspen, alongside Ki’s own growth plans for Syndicate 1618, will see Ki materially increase the follow capacity it is able to offer from 1 January 2024, subject to Lloyd’s approval.
Ki has grown significantly since its launch in 2020, expanding its capacity and line size each year. The new partnership capacity being added in 2024 will further enhance its proposition as a compelling way for brokers to seamlessly complete placements in Lloyd’s.
Mark Allan, CEO of Ki, said: “We are delighted to be launching these ground-breaking partnerships to accelerate the adoption of digital follow in the Lloyd’s market. As a result, Ki will significantly expand the follow capacity available through algorithmic underwriting, marking a major step towards a fully digital follow market. We are pleased to partner with Travelers and Aspen, two leading companies in our sector, who share our vision of a more efficient follow market and we look forward to working closely with them as long-term partners.”
Matthew Wilson, CEO of Travelers Europe, said: “Innovation and digitisation are significant drivers for the continued evolution of the insurance industry. We are pleased to partner with Ki on this opportunity as their platform creates efficiencies for an important segment of the London insurance market and provides a better experience for brokers, customers and carriers.”
Mark Cloutier, Executive Chairman and Group CEO of Aspen, commented: “Lloyd’s is an important platform for Aspen, and one we have successfully grown in recent years with our syndicate now one of the top performers in the market. We have been clear in our aspiration to continue to grow our presence in Lloyd’s and our long-term partnership with Ki will form an important part of this. Mark and the team have built an outstanding platform that has already been enthusiastically adopted by the broking community, we look forward to working closely with them as partners.”

Ki announces partnership with Travelers and Aspen to expand digital follow capacity

<h3>Executive Summary</h3>
The Lloyd’s of London insurance market is a large-scale complex system with interactions between actors (called agents) such as brokers, syndicates, reinsurers, and capital providers. In our recent preprint, available now on arXiv, we present an agent-based simulation of the Lloyd’s of London insurance market. This proof-of-concept model allows us to simulate various what-if scenarios that capture important market phenomena such as the underwriting cycle, the impact of risk syndication, and the importance of appropriate exposure management.
<h3>What is agent-based modelling?</h3>
In an agent-based model, a system is modelled as a collection of autonomous decision-making entities called agents that interact with each other and the environment. This contrasts with many traditional economic models that assume all agents are the same and behave in the same, rational way. An agent-based approach allows us to explicitly model the heterogenous characteristics and behaviour between agents, which can capture the complexity of real-world systems more accurately.
For example, in the context of the Lloyd’s of London market, different insurers and reinsurers have different risk appetites, underwriting strategies and capital structures. By representing each of these agents as a unique entity with their own beliefs, desires and intentions, we can better capture the diversity of the market and the interactions between agents that drive market dynamics.
Our model is built with the HADES Asynchronous Discrete Event Simulation (HADES), a Python framework for creating event-based simulations. HADES has been open-sourced by Ki and is available on PyPI here.
<h3>Syndicates as complex, modular agents</h3>
Within a syndicate, there are many processes and data sources involved in underwriting a risk. We have distilled these down to three initial components for simplicity:
<h4>Actuary</h4>
Actuarial pricing uses risk data and loss experience to determine the fair price of a policy to cover expected losses over its lifetime.
<h4>Underwriter</h4>
Using recent market pricing conditions and syndicate’s past performance to determine the target markup.
<h4>Exposure management</h4>
Incorporating information about the current portfolio and available capital allows syndicates to better manage their tail risk.
We have designed our model to be modular so that we can rapidly prototype and experiment with different agent behaviours. This allows us to segment the different contributions and inspect how they each behave over time during a simulation. In our proof-of-concept results, agents can adapt to the underlying loss-generating process and update their pricing. They are also able to make decisions based on their current portfolio to avoid writing too much risk.
While currently simplistic, this demonstrates the flexibility of our approach and serves as a foundation to incorporate further behavioural complexity in future works. An area of research interest is quantifying the impact of relationships between brokers and syndicates. Another is explicitly modelling the impact of business planning and capacity during a year.
<h3>Incorporating catastrophe risk in the model environment</h3>
Large industry losses from natural catastrophes are known to reduce capital availability and cause insurance premium rates to increase. To incorporate this in our model, we have developed an interface for stochastic events to affect many risks. This allows us to investigate the transient market-level behaviour because of major losses induced by catastrophe events. In our experiments, we have found these large losses can generate more realistic market cyclicality. Our next steps involve calibrating the model to real catastrophe data, including historical events and simulations of potential future scenarios.
See below for illustrative examples of an uncalibrated model run with catastrophe losses (vertical annotations) resulting in underwriting cycles.

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<h3>Syndication of risks</h3>
Risk syndication is a core feature of the Lloyd&#8217;s of London market that sets it apart from many other insurance markets. It refers to the practice of multiple insurers pooling their financial resources to share the risk of a particular policy. This allows individual insurers to take on larger risks than they would be able to on their own, while still diversifying their portfolio and minimizing their exposure to any single event. Despite its importance, risk syndication has not been extensively modelled in agent-based modelling (ABM) literature. Our results mimic the fact that syndication drives down the volatility of the market. Moving forward, we plan to incorporate more sophisticated modelling of risks, including separate classes for different types of risks.
<h3>Summary and Next Steps</h3>
In this blog post, we have presented a proof-of-concept agent-based model of the Lloyd’s of London insurance market. Our simple model allows us to simulate various what-if scenarios that capture important market phenomena such as the underwriting cycle, the impact of risk syndication, and how exposure management influences syndicate performance in a cycle. By representing each agent as a unique entity with its own beliefs, desires and intentions, we can better capture the diversity of the market and the interactions between agents that drive market dynamics. Overall, our model serves as a foundation for further research and development in insurance market modelling.
This project is supported by Ki Insurance and The Alan Turing Institute via the Accenture Turing Partnership.

News.