In this episode of Making Risk Flow, Juan de Castro speaks with Bob Gadaleta, Executive Vice President at Twin Maples Speciality, a new division of Starr Insurance designed to focus on serving mid-market businesses through wholesale brokers in the US. Bob joined Starr to assume this newly created position, bringing over 29 years of insurance industry experience in underwriting and field sales leadership, including stints at Hiscox and AIG.
Over the course of their conversation, Juan and Bob discuss how Twin Maples Specialty aims to streamline workflows, use data-driven insights, and attract top talent to provide efficient and innovative solutions for brokers. Plus, the duo also discuss what the insurance industry can learn from the insurtech startup mindset, how prioritisation can lead to superior risk selection, and why brokers don’t want, yet another, portal.
Listen to the full episode here
Juan de Castro: Welcome to another episode of Making Risk Flow. In today's episode, we want to focus on the wholesale brokerage market. So we are seeing a lot of growth opportunity there, especially in the US. And leading insurers like Star are deploying new entities. We'll focus specifically on this segment. And who better to join me today than Bob Gadaleta with his almost 30 years of experience in the insurance industry in both underwriting and field sales roles, he is probably in the best position to explain us the opportunity in this space. And Bob has recently joined Star to lead this new entity called Twin Maples Specialty. Bob, thank you so much for joining me today.
Bob Gadaleta: Thanks for having me on, Juan. I appreciate it.
Juan de Castro: And just mentioned you've got almost 30 years of experience in the industry. Let's start there. What's your background and please give us also an overview of your current role.
Bob Gadaleta: Sure. As he said, shockingly, I've been in the insurance industry for almost 30 years, just shy of 30 years. Almost all of it has been the carrier side of the business. I started my career at AIG as many in the industry did. Really on the claim side, spent some time as a product head until the financial crisis hit. So I was there about 13, 14 years. And then I spent about 14 years at Hiscox in underwriting, distribution, and leadership roles. Right before joining Twin Maples, I had a short stint at an insurtech, which was really focused on the transportation industry. And that time there was extremely valuable for me because I saw a different side of the business and a different way of thinking than the traditional insurance companies think. So it was definitely worthwhile. I joined Twin Maples Specialty about 10 weeks ago, and I was brought on to build out Twin Maples, which, as you mentioned, is really focused on the wholesale brokerage industry and how to get the most out of the wholesale brokers while making their lives a little easier. Just a focus there as opposed to a split focus on different types of distribution. So we are entirely focused on wholesale brokers.
Juan de Castro: Yes, perhaps building on what you just mentioned. So why would somebody like Star build a completely new entity? What's the opportunity to be captured?
Bob Gadaleta: I think there's a lot of reasons, Juan. And I think first and foremost, when you really concentrate on one thing, on one segment, generally success comes about if you do it right. Right now, if you look at Star over the last 15, 20 years, at least on the casualty side of the business, Star grew as a company that has historically been focused on larger clients and the retail brokerage space, and that's a lot of what they do. Now, they certainly do some wholesale business and certain segments. They do a good amount of wholesale business, but on the casualty side, it is mostly a large company and retail brokerage focus. With Twin Maples, we're building an organisation that is solely focused on wholesale brokerages and creating a buying journey that fits their needs through a whole host of things like streamlined systems that we're in the process of building responsiveness, giving quick responses, quick answers on the questions that they have on the accounts that come in the door and really a passion for customer service. Wholesale brokers are really focused and churn through a lot of accounts and they don't have a lot of time to waste. And we're here to make sure that their time is really spent worthwhile. Now, as I mentioned, Star really focuses on the larger business. What we're doing at Twin Maples is wholesale brokerage only, but really starting in that middle market segment. Over time, as we build out our technology, we do plan to go both upstream and downstream from a size standpoint. But really, our starting point is the middle market space. So we're going to spend a good amount of our time and resources building technology that really streamlines processes, removes distractions, and has the underwriter focused on what I believe to be the most important elements of the sales process, which are risk analysis, risk selection, negotiation, and relationship management. So when you have a team that's solely focused on those needs, I think it should deliver great results. I think today, underwriters in many organisations spend a lot of their time on administrative tasks and file management rather than underwriting and customer service. So that's one of the main things that we're going to change at Twin Maples.
Juan de Castro: I would love to pick your brain on some of those areas in just a second. But obviously, when you're setting up a completely new entity like Twin and Maple specialty, I'm sure you're thinking about, okay, you're going to have to compete with incumbents in that space. And there will be some pros and cons of setting up a completely new entity. So how are you going to gain market share and outperform your peers? What's going to be your magic sauce?
Bob Gadaleta: I think there's a lot of pieces to it. There is no one thing. I think first and foremost, insurance, especially commercial insurance, continues to be a relationship-based business. So my long-term experience has mostly been in the wholesale space. The underwriters that we bring in, the experts that we bring in on the claim side, on the finance side are, they are all people that understand the wholesale brokerage world really, really well. And they're not going to have to start from the first step. So I think hiring the right staff, hiring the right people is very important. And having those people focused on the wholesale community. I think bringing in technology that makes the broker's life easier. There's nothing that aggravates a busy broker more than a lack of speed or lack of ability to give quick responses. So we're going to know our appetite. We're going to know it. Well, we're going to know where we're starting, what our segment is, what's in and out of appetite and be able to give brokers really quick answers. So they're not wasting their time with a lack of clarity on the appetite. A lot of what we do with speed and decision-making and a focus on customer service is really going to drive growth and profitability for us in the long run.
Juan de Castro: I think the beauty of Twin Maples Specialty is you're leveraging all the heritage and the know-how and the expertise from Star. I mean, having them backing you is probably something your competitors are quite jealous about, right?
Bob Gadaleta: I couldn't imagine that they're not. A lot can be gained from partnering with Star. And that's part of the beauty of being a startup that is part of a larger organisation. Specifically, someone like Star Insurance Companies who's a financially really strong insurance carrier and organisation. So what do we leverage from them? I think there's more things than I can really focus on, but I think some of the most important things are the strong A-rated admitted E&S paper. So we don't have to build from a shell. We don't have to buy a shell. We have that paper already available to us. The financial strength that Star has, the scale, the capital. I'll keep going back to it, but a stable of incredibly smart and experienced people in product management, in claims, in finance and in leadership. All these people helping and backing what Twin Maples has to offer is pretty great, to say the least. Now, I think the plan is we're going to do a lot of investing. We're going to build technology from the ground up, as you mentioned. I think that is one of the beauties of kind of being independent and coming in and starting from scratch. But down the road, the intent certainly is what we build in Twin Maples can be lifted and shifted to Star if it really makes the processing and the decision-making faster with data, third-party data, publicly available data, algorithms that can take all of this information and deliver better results and better risk selection.
Juan de Castro: And then ultimately, as you said, insurance is very much a people business. So just having the reputation of Star backing you, it's obviously a huge advantage. So let's get into this concept of streamlined workflows. You've mentioned a couple of times you want to free up your underwriters from low-value admin activities. You want to be much faster in your responsiveness to brokers. So how are you thinking about the end-to-end underwriting workflow?
Bob Gadaleta: As we're talking about how's this going to look, how are we going to build it? What's the base? How does the flow work? The thing that I focus on consistently is I want my underwriters really focused on four items. Let's automate the rest or let's automate as much of the rest of the flow as possible. I think that's an incredibly important thing. I think when underwriters are focused on underwriting, analysing risks, risk selection, negotiation, and relationship management, I think long-term profitable results and good solid growth will come of it. So everything that we build, let's take that into account. I think the time that I spent at the InsurTech while it was short was extremely valuable to me because what we really used there was the existing insured data plus publicly available data plus third-party data that we sourced from government websites, other websites, a whole host of third-party data really took that and were able to make really advanced risk selection ideas from that. So when we talk about technology, there are a lot of pieces of it. There's how do we use all sorts of data to make better risk decisions? How do we streamline processes so that the underwriters are focused on only the important tasks? How do we create a system where the process, the buying journey is really easy, simple and fast for a wholesale brokerage community? I think we will have a major success on our hands, which will benefit not only Twin Maples in the long run but the wholesale brokers that work with Twin Maples and Star as well.
Juan de Castro: And one of the components you mentioned there was streamlined processes. So everything you said, removing anything that is not risk selection underwriting relationship management. So as you're building your tech architecture iIt's like, maybe, I assume the risk will keep on coming in the traditional way of emails with attachments, et. cetera. So how are we thinking that to be routted through your platform?
Bob Gadaleta: That's actually one of the most important topics that we discussed because what we've been hearing from the brokers that we talked to is, please don't give us another portal. Everybody out there wants you to put their information through a portal, and it's just not feasible for us to go and put data in 5, 10, 15 different portals. And that's what's driving, I think, wholesale brokers to continue to email as much as they do. If you look at some of the larger wholesalers in the country, in the US, a lot of them are building their own internal platforms where they can access multiple carriers' pricing through APIs. They put in the information once and they get a number of different results back from different carriers. As we build, I think that's certainly what we're taking into account. What brokers' needs are, what they want, how they operate. And build kind of the front end of the application process that way.
Juan de Castro: And you said one of the ways you can outperform your peers is through superior risk selection. So that is what you're thinking. Like, how do you use not just the data provided by the broker, but any other data available externally to identify what segments of risks you really want to underwrite?
Bob Gadaleta: That's absolutely right. And there's another piece to it, which I didn't mention, but there's the piece of how do you select which risk in your workflow to handle? How do you prioritise that? And if we have all of this available data and we can build some rules around, this is what goes to the top of the workflow. This is what our underwriters handle first when it comes in the door. I think that also leads to better decisions and to better risk selection. So if the best risk, the most profitable risk, the risks with the best conversion ratios based on our appetite rise to the top of the workflows, and then we use all that data and external data to make risk selection decisions, I think that leads to long-term success. I think that brings in business that is going to be profitable for us for the long-term.
Juan de Castro: It's quite interesting how everything you said almost fits very nicely together. Because one of the things you said at the beginning is providing the best or a passion for customer service. And that links very nicely with the point you made about don't give us another portal. Because that is the opposite of providing the passion for customer service. It's almost forcing the broker to use your own portal. What you're saying to the broker is ‘Send me the risks in whatever platform or channel you want to send it to’. Whether it's an API or an email, whatever it is. We'll use external data to then do a very granular risk selection and evaluation. And provide priority rules so that you make sure that those risks that you really want to bind, the turnaround time or first contact with the broker and the quote turnaround time are up to me.
Bob Gadaleta: That's exactly the plan. So I don't think this is anything that other folks aren't thinking about. But the ability that we have to build this from scratch and not be restrained by anything that's already in place makes it for us achievable. And the ability gives us the ability to build it in hopefully a relatively quick period of time.
Juan de Castro: One of the things you mentioned in your introduction was obviously you work in some other large insurers and also insurtechs. What did you learn in those experiences that is informing how you're thinking about Twin Maples Specialty?
Bob Gadaleta: That's a great question. I'll start really from the insurtech side of the business. Like I said, it was a short amount of time, but it gave me a tremendous view into thinking about business in a different way. The insurance industry historically has not been known to adapt quickly to change or to technology, although it's gotten better in the last five to 10 years. But Twin Maples can be focused on doing just that. In my time at the insurtech, what they did really, really well was adapt, adapt to change, adapt to what was working and what wasn’t working. Let's tweak this. Let's tweak that to make a change. A really scrappy vibe, a really scrappy atmosphere where you learn really quickly. You pivot really quickly and you make changes because the systems that you build are really, really adaptable. So I think that's one of the things that I learned really well. The other thing is speed. Sometimes we try to set up meetings, we try to meet other people and just want to talk about this, that, or the other thing and sometimes it can take weeks. In the insurtech world, that's not acceptable. It has to be done that day, the next day, within two days, within 24 hours and there is a need for speed. And I took that thinking to heart. One of the things that we were able to do is, you know, I joined February 20th by April 22nd, we were already quoting professional liability business, albeit in a very manual manner, but that speed to market was really, really important. Something that I came away from really impressed in my time at the insurtech. But look, there's tremendously important things that come from existing traditional carriers. In order to amount to strength when it comes to risk analysis and pricing and actuarial overview, scale, balance sheets, and having a lot of the departments in-house, such as claims finance and marketing, is hugely important. So we get the best of both worlds. We have all that historical knowledge. We have all of those departments that we can access. But at the same time, we can build in a scrappy way. We have our own team of developers and operations folks who are going to help get our technology off the ground. We have underwriters that are wholesale-only focused. And when you put all those things together, I think we're in a really good place to be long-term successful.
Juan de Castro: Yeah, that's really interesting because you mentioned two things that at face value might be in conflict. One is you're going to bring really experienced talent into Twin Maples Specialty that have the relationship with brokers, know how to underwrite or manage claims, etc. And at the same time, you're setting up almost like a startup within Star that you wanted to move really fast and have almost the day-to-day feeling of a startup. So how are you combining those two together as you are building the team?
Bob Gadaleta: Juan, I don't think those conflict at all. I think that makes an underwriter's job better, right? Because again, at a lot of insurance companies, you're going to be dealing with a lot of administrative tasks and file management and this report and that report. We want to build the technology to remove that. We want to give the underwriters the ability to focus on what they like to do, and what they enjoy doing, which is underwriting, risk analysis and managing the relationships that they've had with their brokers for the last 10, 15, 20 years. So the technology enhances the job of these experienced underwriters. It really doesn't take away from it. Again, if it takes away anything, it's really just the low value tasks, the administrative tasks, but not the decision-making, not the real pricing, long-term pricing, long-term margin, things like that.
Juan de Castro: At the end, as you say, you're really removing all the frustrating activities of the day-to-day of an underwriter, which should make it really attractive for you guys to attract talent into Twin Maples, right?
Bob Gadaleta: Yeah. I mean, that's in a perfect world we get all the underwriters that we want because they realise we're innovating the processes where we're taking away the administrative tasks, but they're backed by a really strong financially sound company with great A-rated paper. So I think about me growing up in this industry, if I could be part of a startup, help build something, but have the backing and financial strength of a big carrier that seems like the perfect role or the perfect opportunity.
Juan de Castro: Definitely. It's a very exciting one. So you mentioned that in the pure startup spirit, within a couple of months of joining, almost you bound the first risk. And then, as you said, it was quite manual initially. But if you fast forward, what do you want to be, as much as you can disclose, without getting into any confidential data?
Bob Gadaleta: Look, year one is all around building it. It's mostly around building technology and really executing on our business plans. So other than starting the build and hopefully completing a lot of the build on the technology in year one, a lot of it is manual coding, binding, going out seeing all the wholesale broker partners, making sure that they're clear about what we're doing. But I think over a three-year period is more interesting because while we're starting in the professional liability space and the financial line space, long-term, I know our plan is really to offer wholesale brokers, a wide variety of products. It's not just going to be E&O and D&O. It's going to be E&O, D&O and a whole bunch of different casualty lines. While not everything within Star will have a counterpart in Twin Maples, a good amount of the products will probably have a segment that is wholesale only and written through Twin Maples. So we're still figuring out the product roadmap, and exactly what that looks like. We've gotten through the end of this year, which we've launched our professional liability. We'll probably launch our financial lines in the next couple of months. We'll continue to expand that appetite. So we started with a limited number of segments and we'll continue to expand that. We'll continue to expand with the brokers that we work with. But certainly, over a two, three, five year period, this won't only be an E&O and D&O shop. It will be much broader than that.
Juan de Castro: Are you leveraging existing Star products, but serving it to a different size of clients and the distribution? And to what extent do those insurance products require a complete overhaul?
Bob Gadaleta: At least to start, we are using existing Star products. But because the needs of the large clients and the large retailers are different than middle market clients and wholesale brokers, we are making some changes to coverage. We are making some changes to the way we price much smaller risks than what historically have gone through with these products. So we launched primary MPL and excess MPL. And we launched Excess A&E a week and a half ago or so. And we paused our primary A&E offering just until we get some endorsements written that we think are needed for the middle market space. So we're really making sure that we do this in a controlled manner so that we get the right products out that have pricing that matches the marketplace, that matches the industry for middle market and smaller clients.
Juan de Castro: That makes a lot of sense. When I heard, Bob, that you were joining Star specifically, Twin Maples Specialty, well, first of all, it was a very exciting, or it is a very exciting opportunity entering a new market in a technology-first approach, but very focused on serving brokers the way they want to be served. And at the same time, couldn't think of anybody better than you with your very broad experience and your vision to lead it. But it's an extremely exciting venture, and I think you'll do amazingly well.
Bob Gadaleta: Thank you, Juan. I appreciate it. I always have respected you and appreciated the opportunity to speak with you about this. We're really excited about what we're building. The beauty is we are starting from scratch. So we have the ability to pivot based on market circumstances, based on feedback that we get to our products, pricing, whatever it is. And as we build out our technology, we're hoping that will serve both our clients and brokers in a really positive way for the long-term.
Juan de Castro: Absolutely. Perhaps we can do another episode in a couple of years' time to celebrate all the success. Thank you so much, Bob, for joining me today.
Bob Gadaleta: Yeah, thank you as well. Appreciate it.
