Seeing schemes in 4D – The Travelers process

Niche businesses – and some niche interests – call for specialised insurance cover. And when standard insurance offerings don’t respond, extra work is needed to match a niche insurance need with the appropriate insurer.

That’s why Travelers developed a four-step method – known as their 4D process – to govern its Schemes business, which includes groups of clients with similar insurance requirements due to their trade type, affiliation membership or need for bespoke cover. Travelers uses these 4 D’s – Discovery, Design, Delivery and Development – when working with brokers to set up and launch a scheme, monitor its progress and develop it for continued success.

“The 4D process helps us answer important questions about a schemes partner,” said Simon Medhurst, Schemes Development Manager for Travelers Europe. “Do they widen our distribution? Should we allow them to underwrite on our behalf? Can we work with them on wordings? Do they have a strong track record on performance? What is the scope for large loss and what is our comfort level with that? The structure ensures the broker and Travelers have the elements of a mutually beneficial partnership.”

Nathan Anders, Specialist Schemes Director for Towergate Insurance, experienced the 4D process first-hand when placing business with Travelers for Towergate’s subsidiary, Walker Midgley, in 2019. Walker Midgley specialises in insurance cover for 17 schemes including modellers, model engineers, vintage tractors, veteran and vintage machinery, mechanical music and organs, and miniature and full-sized steam-powered vehicles.

That collection brought complexity and nuance when it came to insurance risk. “It was a well-established scheme, we had a lot of data on how it ran over the years, and it was profitable,” Anders said. “But when you get under the bonnet, you realise the complexities of it: Things that move around on rails cause issues with reinsurance for some insurers. There were financial lines elements to consider. We had all sorts of weird and wonderful content in the wordings. I was keen to find cover for all of this from a single partner.”

Assessing the fit

The clock was ticking for Anders. It was June and he needed to secure a new insurer before his existing scheme expired in January. He drafted a document detailing the fundamentals of the Walker Midgley book and used it to gauge interest from insurers and spark conversations. Travelers was one of many insurers Anders approached.

During the Discovery phase, Travelers gets up to speed on a scheme. They discuss the proposition, determine how it meets an audience’s needs, and assess performance expectations. Beyond that, Travelers looks for a good fit: Can it support the scheme’s ambitions? Will the teams in the partnership collaborate well?

At this stage, Anders said Travelers started to stand out for him.

“Of all the insurers I approached, Travelers was the only one who really communicated, even if there was no update,” he said. “There was no radio silence. It seems like a small thing, but I was under pressure to find a new insurer.”

It was also August – a tough month to reach people – but Anders sensed there was still “a lot of paddling under the surface” at Travelers to gauge their appetite for the scheme. It seemed to align. Meanwhile, a few elements of the scheme were already posing problems for other insurers.

Designing the scheme

The Design stage refines the proposition, with help from Travelers experts, to create a solution that serves the scheme’s clients and the broker’s business. After undertaking due diligence to deepen and verify understanding of the scheme, the parties agree to commercial terms in principle, as well as next steps, roles and responsibilities.

At this stage, Anders said he was involved in a call with the vice president of Business Insurance for Travelers Europe, who pulled in two national underwriters to provide the agility needed to make the scheme’s deadline. Between calls, Anders worked with a colleague from Walker Midgley for weeks to hammer out new policy wordings, leaning on Travelers contacts as needed to find solutions to nuances buried in the wordings.

“I was speaking to the right people on calls once a week for a long period,” Anders said. “I was very conscious that these were senior people, busy people, and they could make decisions and move quickly – they were not people who took notes and then needed to go up the line for signoff.”

This access to experts is key to the 4D process for Medhurst. Before joining Travelers in 2021, he built his career as an insurance broker – an experience that informs how he now operates on the opposite side of the business.

“As a broker, I got access to senior internal people who added value on the technical side – and you need that,” he said. “For brokers, the scheme is only as good as the interaction they have with the underwriter and the access they have to answers and solutions as quickly as the process needs.”

Preparing for delivery

At the Delivery stage, the scheme is put into action and milestones are set. Experts from within Travelers are still available as the scheme goes live. The parties agree to success measures to underpin the relationship, then sign contracts to confirm the commercial agreement.

This support helped the Walker Midgley scheme meet its January launch deadline.

“We had the rhythm of the scheme defined in the agreement,” Anders said. “It detailed monthly engagement meetings, the timing of the scheme’s annual performance review, and defined our conversations around rate, our carrying exposures, and the new business we said we’d do. We also set expectations for retention and claims.”

New developments

Once a scheme launches, the Development phase determines the contact and support the broker and scheme need in the first weeks and months, leaving room to adapt. The scheme’s performance is monitored against agreed-upon metrics and supported with ongoing insights, marketing and claims service. Regular reviews assess progress against the scheme plan.

For his part, Anders will develop the scheme by attending steam events in 2023 to drive new business, with support from Travelers. He may also broaden one of the original 17 schemes – collections of memorabilia – to include tabletop gaming. “Not many insurers are involved with it,” he says, “and the potential market size is significant.”

Walker Midgley renewed its contract with Travelers and Anders credits the 4D process with the scheme’s success. “Having a structured, 4D process is absolutely key to be able to compete for the strong schemes offerings out there,” he said. “It has been a fantastic partnership.”

To find out more about Travelers Schemes, visit Travelers Schemes

Simon Medhurst is Schemes Development Manager at Travelers Europe, and Nathan Anders is Specialist Schemes Director for Towergate Insurance.