Case Study - Ark Syndicate Management Ltd

Ark Syndicate Managment Ltd

“Northdoor were awarded an European IT Excellence Award for the work they performed for us. They delivered our system working to specification against incredibly tight deadlines. Northdoor has assisted in clearly defining our development requirements and delivering against these - we have been very impressed with the business knowledge of their consultants”

Ark Syndicate Management thrives on N-DEX Suite

Ark Syndicate Management Ltd had just a few months from foundation to be ready for business. In the N-DEX Suite underwriting application from Northdoor, it found a Lloyd’s and FSA compliant package offering affordability, swift implementation, functional flexibility and long-term scalability; as well as excellent support.

Ark Syndicate Management Limited (‘Ark’) is a Lloyd’s-based underwriting agency. It was launched in March 2007 by Aquiline Capital Partners LLC, a $1.1bn New York based private equity firm investing in financial services, and Whittington Group, a leading insurance investor and services provider, together with Swiss Re and private equity fund Lehman Brothers Co-Investment Partners.

Ark’s Lloyd’s Syndicate 4020 had a stamp capacity of £114m for the 2007 year of account and £190m for 2008. It writes a diversified and balanced book of insurance and reinsurance in marine, energy, property, casualty and accident and health.  Ark’s holding company is Group Ark Insurance Holdings Limited, based in Bermuda.

Rapid start-up

Ark gained approval from the Financial Services Authority (FSA) and Lloyd’s Franchise Board to write policies incepting from 1st April 2007. Yet it was only in January 2007 when the various investors indicated their decision to capitalise the new syndicate and managing agency.

“We were under a great deal of pressure to be compliant and ready for business by Easter 2007, a traditionally very busy underwriting period,” said Nick Bonnar, director of underwriting for Ark Syndicate Management Limited. “A critical step was getting FSA and Lloyd’s approval of our underwriting systems, and of course we are not IT people.”

Underwriting system

“We decided to investigate 3rd party software offerings and city-based IT support companies as a route to getting our computer systems set up quickly and supported reliably,” said Bonnar.

Ark needed to choose, implement and configure a solution quickly. This presented a number of challenges.

The solution had to be affordable to a start-up, yet scalable. And since Ark’s business was just beginning, its future direction was somewhat dynamic, meaning the solution had also to be flexible.

Any solution supplier had to recognise that there was a certain amount of financial risk associated with working with Ark prior to its launch, as ultimately plans could have been shelved. The supplier had also to be completely trusted to keep details of the potential new agency confidential.

Northdoor N-DEX

N-DEX Suite from Northdoor is a specialised underwriting application for claims messaging and signing. It is designed both to meet the current and future needs of London Market Insurers. Suitable for a start-up or much larger syndicate, it can be expanded with the deployment of add-on modules as well as through custom development. Users include Managing Agency Partners (Syndicate 2791) since its formation in 2000, Novae Syndicates Limited, Heritage Managing Agency and many others.

N-DEX Suite supports migration to ACORD compliant messaging and meets FSA and Lloyd’s regulatory requirements. The suite supports tight control of underwriting authorities to the syndicate’s approved business plan; contract certainty monitoring; comprehensive auditing at field level of who changed data and when; and supports compliance exception reporting.

“We selected N-DEX Suite from Northdoor as it is already well proven in the London Market and Northdoor were confident they could get us up and running really quickly,” said Bonnar. “N-DEX Suite was customisable to fit Ark’s specific start-up and ongoing needs and also cost-effective for a smaller syndicate, while scalable.”

That Ark could own its copy of N-DEX Suite, rather than simply licence the software was attractive. Given the critical nature of the software to Ark, this would give it greater control than licensing a packaged solution owned by a vendor. Additionally, since the software is Microsoft Windows-based and fully documented, this meant that if needed, Ark could contract development out to any suitably qualified support company or IT professional.

N-DEX Suite may be hosted by the customer or at a dedicated hosting site. “We wanted the solution to be hosted, managed and supported by an external provider, enabling us to focus on underwriting insurance risks, rather than running IT,” said Bonnar. “For us, Northdoor had all the answers.”

Up and running

Both customised and implemented by Northdoor in just 11 weeks, authorised Ark employees now access the system from anywhere via a web-browser. N-DEX Suite handles Ark’s policy and claims administration, credit control and transaction processing. It also provides a view of business performance and risk. (Via Northdoor’s data warehouse which also delivers data using Hyperion’s Business Intelligence Suite).

“The implementation timelines were incredibly tight,” said Bonnar. “If Northdoor had not successfully delivered, we would not have been able to start writing insurance business on schedule.”

Northdoor also provides Ark with long-term IT support; application and systems management are covered, as well as support of interfaces, data services and the agency’s internal IT infrastructure. Contingencies for disaster recovery also operate.

Flexible system

Of course, the underwriting market is a dynamic one and Ark is also growing rapidly; so its systems can’t stand still. For example the enabling of electronic placing is currently being considered and a higher level of workflow management to improve control and service standards.

“We have to be able to visualise our future business operations and plan suitable infrastructures in advance,” said Bonnar. “Northdoor has the expertise in the London market to help us identify necessary systems developments and to then schedule and deliver them.”

While a package software vendor will rarely provide custom development, and must consider user-group priorities rather than individual needs in future releases, Northdoor’s operating model means that N-DEX Suite customers choose to enhance their systems with only the changes that they want and to a timescale to meet their own needs.

Doing well

In just a few months from start-up, Ark has grown from some 10 to 55 people, using training services from Northdoor to quickly bring newcomers up to speed with N-DEX Suite. The agency has also expanded into new insurance classes from those at inception and has proven that Northdoor can accommodate growth on time and on budget.

“Northdoor has assisted in clearly defining our development requirements and delivering against these - we have been very impressed with the insurance knowledge of their consultants,” said Bonnar.

“As we expand and extend into new classes, we are finding that N-DEX Suite is highly flexible supporting us as an agile, competitive agency.”

Ark today benefits from Lloyd’s market ratings: AM Best: A (Excellent) Fitch Ratings: A+ (Strong) S&P’s: A+ (Strong).