Technology platforms are scaling into complex risk exposures far faster than the insurance market has historically been used to.
Mobility businesses can move from a handful of engineers to operating across multiple countries and regulatory regimes in a matter of months. By the time brokers are asked to place coverage, the organisation may already have a risk profile closer to a multinational operator than a typical start-up.
For brokers, that reality is reshaping the job. Understanding the client’s business model – who contracts with whom, where liability attaches and how regulation might evolve – is becoming as important as placing cover itself.
That shift is pushing specialisation to the forefront of commercial broking strategy. For Phillip Watkins (pictured), of The Plan Group, it reflects a deeper change in how modern technology businesses grow, and how risk emerges around them.
Watkins argues that many fast-growing technology businesses are being built under fundamentally different incentives than traditional companies, particularly those backed by venture capital.
“In a sense, they positively encourage you to assume risk in a way that, for most red brick businesses, you never would have done,” Watkins said.
That creates a difficult environment for insurance. Many companies expand across jurisdictions, business lines and regulatory regimes in months rather than years. Yet their understanding of risk often lags behind their operational complexity.
Watkins said the goal is to ensure companies understand their potential liabilities early in their growth, even if they are not yet buying insurance at appropriate levels.
Watkins does not believe the industry is facing a simple coverage gap. The core insurance frameworks, he argues, remain broadly fit for purpose. The challenge is the pace at which complexity is emerging.
“I think the coverages in the market are fit for purpose,” he said. “It's just that the nature of the coverage required by an organization historically at a given point in time is not what is required now.”
A mobility platform may begin life looking like a relatively straightforward SME. Within a year, however, it could operate across multiple countries while combining ride-hailing, food delivery, micro-mobility and autonomous technologies.
Even companies that appear similar from the outside can differ materially in how liability attaches. For brokers, the real work lies in understanding the operating model – who the contracting parties are and where risk truly sits.
Watkins has seen examples where policies are purchased locally to satisfy regulatory requirements, even though the true contracting entity sits elsewhere in the group. In those cases, the appearance of coverage can hide a more fundamental problem: insurance attaching to the wrong entity.
That is where sector expertise becomes commercially critical.
Watkins believes this complexity requires brokers to rethink how they engage with clients. A transactional approach built around annual renewals and proposal forms is increasingly insufficient.
“I think it is very much about moving from what I consider to be a more transactional approach to placing coverage, to engaging in what is much more of a consultative approach,” he said.
That consultative role starts long before a placement discussion. It involves mapping liability pathways, testing scenarios, understanding how the client operates in different jurisdictions and explaining how risk may evolve as regulation and case law catch up. It also requires much deeper geographic expertise.
“In some respects, that's where we need much more in the way of specialisation locally as well as globally,” Watkins said.
Without that depth of knowledge, brokers struggle to demonstrate the value of the cover they are recommending. Clients may see pricing as excessive or unnecessary, while insurers may lack the confidence to offer terms that properly reflect the risk.
The result is a disconnect that neither side finds satisfactory.
That dynamic also helps explain why insurance can remain a secondary concern for many early-stage businesses.
Asked whether venture capital investors are scrutinising insurance structures more closely, Watkins was blunt, “the reality is the answer is ‘no’,” he said.
In his experience, investors tend to focus primarily on directors’ and officers’ cover rather than the broader liability architecture of the business. That reflects the economics of venture capital, where investors expect many companies to fail and rely on the success of a few outliers to generate returns.
The consequence is that companies can reach substantial scale before risk management fully matures. When exposures eventually crystallise through litigation or regulation, changing course becomes much harder.
Watkins compares it to “trying to turn a tanker in the Nile”.
Watkins does not argue that insurance frameworks are fundamentally broken. The foundations still fit. What has changed is the speed and scale at which digital businesses generate complex exposures.
That shift is forcing brokers to move beyond generalist coverage discussions toward deeper sector understanding.
In practice, that means interrogating business models, mapping how liabilities flow through platforms and helping clients interpret risks that may not yet have been tested in court.
As businesses become more complex, the value of specialist advice grows with them – making sector expertise an increasingly important competitive advantage in commercial broking.
