A capacity provider that follows by automatic rule the risks priced by a lead underwriter, separating the judgment function from the funding function.
In a subscription market the lead underwriter prices the risk and sets terms, while followers supply the remaining capacity on the same terms. Historically each follower re-examined the file, duplicating analytical work without changing its outcome and loading the running cost of the whole market. The algorithmic follow syndicate draws the conclusion from that observation: it defines an appetite once and for all as a set of rules covering sector, geography, limit and lead quality, and commits capacity without individual review as soon as the rule is satisfied. The shift is clean, since underwriting judgment stops being exercised on the risk and starts being exercised on the portfolio and on the choice of leads followed. Two objections deserve holding together: the architecture concentrates analysis on a small number of leading underwriters, making the market more dependent on their quality, but it also renders explicit and verifiable an appetite that had remained implicit, and therefore auditable for the first time.
The Ki syndicate, launched at Lloyd's in 2021 by the underwriter Brit with support from Google Cloud, was the market's first entirely algorithmic follow-only syndicate, binding capacity without individual review on risks already priced by approved leads.
algorithmic follow, syndicat suiveur automatisé, follow-only syndicate