While the UK’s insurtech sector is blossoming, with some estimates putting 2018 investment levels at $1.7 billion, the UK Insurtech Board has warned that startups coming into the market lack the necessary legal support, meaning that they often enter discussions with potential partners from a position of weakness.
In response to this, the Board has launched a new resource to help startups know where they stand. The legal toolkit contains a number of key documents that, it is hoped, will help new insurtechs more easily forge new relationships with bigger corporates.
The toolkit, which has been developed with the co-operation of law firms Simmons & Simmons and Dentons, can be downloaded for free from the website of Tech Nation, the group behind the Insurtech Board initiative. The aim is to remove as many legal and compliance-based hurdles as possible.
“We've been encouraged by ever-growing willingness and interest from insurance companies to work with innovative startups as a means of driving innovation, but it's clear that standard legal issues can stand in the way of collaboration,” said Eileen Burbidge, Chair of Tech Nation. “The insurance sector has its own contractual norms and practices and without legal support, early stage businesses are disadvantaged in drawing up and negotiating documents that meet the expectations of potential partners. This new toolkit addresses that problem. Conforming to industry standards, they can be downloaded free of charge and used as a legal underpinning to negotiations.”
The documents, explained Martin Mankabady, a partner at Dentons, cover all the essential areas that need to be considered before beginning a negotiation, and represent ‘a balanced starting point’. “It is hoped,” he said, “that [they] will smooth the path of such negotiations and, in the process, reduce friction, time and cost. This will enable to relevant parties to focus on the key commercial issues.”
The Insurtech Board, which is backed by the UK Government, has a membership comprising of representatives from insurtech startups, established industry incumbents and governmental figures. It was formulated to identify and solve the challenges stopping the insurtech ecosystem from running smoothly; the fully standardised documents, which include a non-disclosure agreement, an appointed representative agreement, a terms of business agreement and various key amendements, are seen as a key plank of that strategy.