Obsidian Insurance-Reinsurance Broker entered the local insurance market earlier this year, relying on niche corporate insurance. Thus, the focus was on financial risks, the predominant line of business being that of guarantee insurance. By acquiring Zurich Broker’s corporate client portfolio through a transaction completed in March, the total volume of collateral policies brokered by Obsidian Broker currently represents over 75% of the total.
“Obsidian Broker practically started its activity at the end of the first quarter, after receiving the operating authorization on December 30, 2019 and signing the intermediation contracts with the insurers in the first months of the year. The beginning of the activity was made in harsh conditions, of “pandemic storm”. However, the decision to take over a portfolio of corporate clients of a broker specialized in guarantee insurance was an advantage in this context and offered us a good start,” says Valentin Țucă, CEO of Obsidian Insurance-Reinsurance Broker.
The down of a major crisis that occurred practically overnight suddenly increased the level of awareness of risk exposure, especially in the B2B area. On the other hand, the context highlighted the need to have a risk and insurance consultant by one’s side – for example for better understanding of the conditions under which business interruption insurance works or why pandemic risks are usually excluded from travel health insurance – and opened up new opportunities for players in the field.
In addition to collateral insurance, Obsidian Broker is considering expanding the area of risk advice, assistance and insurance brokerage for corporate clients and other categories of risks and insurance, which have become critical in the context of the pandemic, such as default risk insurance or insurance private health, but not only.
“2020 is an atypical year, so our approach to the local market is atypical, relying mainly on niche insurances. The taken over portfolio, which includes several hundred clients, provides a good starting point and a useful platform for the development of Obsidian operations on the local market, medium and long term. Most likely, guarantee insurance, especially for infrastructure projects, will have a major impact on this year’s figures, but the potential for expanding the services offered to each customer is extremely high, especially for innovative products. This crisis accelerates the transition to the future and teaches us the art of doing the impossible, fully stimulating our creative spirit to come to customers with appropriate solutions,” adds Valentin Țucă.
Great digital growth potential
Although the development of risk consulting and insurance brokerage activity, especially for a new player, is dependent on face-to-face meetings and networking, the agile approach of Obsidian Broker has allowed a fast adjustment to special circumstances created by social distancing restrictions. On the other hand, the negative effects of the crisis on the economy and the pessimistic forecasts for the near future have negative consequences for the development of the insurance industry in general, even if the first quarter figures did not reflect such indications. However, the role of insurance brokers is growing in importance, but it is essential that they adapt their business model as quickly as possible.
Updated with the new circumstances, Obsidian Broker has initiated a project to develop sales and attract new customers through a partnership in the digital area, so as to offer as simple as possible insurance solutions and within reach of the economic agents concerned.
“The potential for digitalization in the insurance industry is huge. Insurtechs were already popular before the pandemic, and the context of social distancing has accelerated this process. Therefore, we are considering the development of projects in the digital area, and by the end of the year we intend to launch a first partnership,” says Valentin Țucă.
Currently, the Obisidan Broker team includes 13 corporate insurance specialists, both experienced brokers and an operational support team. The company still has open positions for junior and senior brokers with specializations in certain categories of risks and insurance or with a profile of leaders in business development and sales.