A marketplace for insurance
Most industries built shared infrastructure for their transactions long ago. Insurance placement has not: in Australia it still runs largely on email, spreadsheets and re-keyed data. The Cuttleflow Marketplace is being built to change that for specialty lines. A broker submits once, on a standard question set and wording, and receives comparable quotes from every market that wants the risk. It is not open for live business. This paper sets out the problem, the design, how the operator is held to neutrality, what a US exchange teaches us, and the risk that matters most.
The problem
When a business needs specialty cover, its broker finds markets willing to write the risk and negotiates the terms. Most of that work is manual. Each market has its own proposal form, so the broker asks the client the same questions several times and re-keys the answers. Each market quotes on its own wording, so comparing quotes means comparing small print as well as price.
The cost falls hardest on risks outside the standard categories. Appetite is fragmented, and some risks go unplaced because the broker and the right underwriter never find each other. Perspective 24 sets out what that means for underwriters.
The idea of a shared venue is old. Lloyd’s began in a London coffee house in the late seventeenth century as a room where people with risks and people with capital could meet. Competitors will share a venue and its standards, provided the venue is neutral and its rules are clear. What is new is that the venue can now be electronic and open to the whole market.
What the Marketplace is
The Marketplace is built on one standard per class: one core question set, one wording, agreed quote and policy documents, and published rating inputs. Because every market quotes on the same wording, the differences a broker compares are price, extensions and subjectivities, not the small print. The standard is written with the markets and brokers who will use it; Cuttleflow decides each change and publishes it with its reasons.
A placement runs in four steps:
- The client answers once, on the standard question set, in the broker’s branding. A market may add a few questions of its own, each with a stated reason.
- The broker picks a format. There are six, each replacing an email habit: get quotes, package, renewal with the current insurer first, indication only, excess layers, or one market only.
- Markets quote on the standard. Members whose own rules accept the risk see it. A market the broker invites can quote as a guest through a link. Quotes are shown in the order they arrive.
- The broker binds on the platform. The quote schedule, the policy schedule or placing slip, and a policy input sheet for the market’s own booking are produced from the same record.
The first classes are cyber and management liability; professional indemnity for engineers and architects; and excess layers above a primary. Directors and officers is in outline. Industrial special risks, then public and products liability, are the likely next classes.
What each participant gets
| Participant | What the Marketplace offers |
|---|---|
| Brokers | Every market in one place, including underwriting agencies, Lloyd’s coverholders and new entrants alongside insurers. One set of questions for the client, quotes compared on the same wording, binding on the platform, and a placement report and client report from the same record. |
| Markets | Complete submissions on the standard, checked against the market’s own underwriting rules before it sees them. Pricing in Cuttleflow, in its own system or through an API. Quoting as a member, or as a guest when a broker invites it. |
| Clients | Questions answered once, a broader search of the market, and quotes that can be compared on the same terms. |
Holding the operator to neutrality
A shared venue is only worth joining if its operator cannot favour itself or anyone else. Promises are not enough, because the operator of a successful venue will one day be tempted to break them. Cuttleflow has published ten operating commitments that apply from the demo onwards and will form part of the participant terms when the first class opens, so the participants they protect can enforce them. Among them:
- No ranking and no paid placement. Quotes appear in the order they arrive. Members are never ranked above guests.
- No payment that depends on who wins, and no charge that depends on which market a broker chooses or on the premium written.
- No role in price or terms. Cuttleflow does not broke, underwrite or advise. Matching, referral and bind follow each market’s own rules. Cuttleflow’s AI makes no decisions in the quote or bind path.
- Data used only for the participant it belongs to, never given to another participant and never used for any Cuttleflow business’s own trading.
- 90 days’ notice of any new charge or change to the terms, with the right to leave and take one’s data first.
- Interests declared. Related businesses use the Marketplace on the same published terms as everyone else.
Before every bind, the insured’s ABN is checked against the Australian Business Register and the insured is screened against the Australian sanctions list.
What a US exchange teaches
Bold Penguin, founded in Columbus, Ohio in 2016, built an online exchange for small and mid-sized commercial insurance. Its agent terminal is a rules-based tool for writing commercial insurance quickly, across general liability, workers’ compensation, professional liability, business owner’s policies and bonds. By 2019, carriers including Nationwide, Hiscox and CNA had adopted its technology. In January 2021, American Family Insurance bought it; Bold Penguin kept its name, became a subsidiary, and American Family’s agents gained access to the platform.
Three lessons follow for an Australian venue:
- The premise works. One structured application, matched to the markets that want the risk, saves real time for the people placing it.
- Ownership decides trust. A successful exchange attracts buyers, and the most likely buyers are participants. Once a venue belongs to one market, every other market has to decide whether to trust it. That is why our commitments are written to be enforceable by participants and why related interests are declared, rather than left to goodwill.
- Specialty is a different problem. Bold Penguin’s volume came from high-frequency small commercial classes. Our first classes are specialty lines where appetite is fragmented and there are fewer markets, so a common standard and wording matter more than speed alone.
The risk that matters
A marketplace has one existential risk, and it is not technology. It is participation. A venue with too few markets offers brokers nothing; a venue with too few brokers offers markets nothing. Most marketplaces fail at this.
We have designed for it in three ways. Joining needs only a browser, and leaving costs nothing: each participant can export its own data at any time. Markets can quote as guests when a broker invites them, so a broker can bring its existing markets from the first placement. And no class opens for live business until three markets with broad enough appetite have committed, brokers have committed renewals, the wording has been signed off by lawyers, and licensing and competition advice is complete. A class that cannot meet those conditions does not open.
Design reduces the risk; it does not remove it. If the market does not use the venue, the current structure will persist, with its costs falling, as they do now, on clients.
A note on status
The Cuttleflow Marketplace is not open for live business. A working demo on fictional sample data is open to invited brokers and markets. The next step is a production-ready sandbox, where invited participants review the standard and test each class before it opens. The platform is free during the Beta testing period; charges will be published before any class opens. Nothing in this paper is a quote, an offer or cover. Cuttleflow Pty Limited does not hold an AFSL and does not issue, arrange or advise on insurance products.
Sources
- Business Insurance (14 January 2021): American Family buys insurtech Bold Penguin
- Carrier Management (22 September 2019): Bold Penguin expands its agent terminal
- Cuttleflow Marketplace and operating commitments, October 2026
Cuttleflow Systems · Perspective 26 · 33°53′S · 151°16′E · Sydney