Six years ago, Simon Ritterband started an appointed representative (AR) called Moonrock Drone Insurance after spotting an opportunity in the drone insurance sector.
Ritterband’s initial vision in 2016 was to streamline and improve the supply of appropriate drone insurance after experiencing his own frustrations when looking for a policy himself.
The firm now offers commercial lines products alongside a personal lines policy aimed at hobbyists and recreational users to cover theft, cyber-attacks, accidental damage to drones and departures, which is underwritten by the Munich Re Innovation Syndicate.
And last month (July 27, 2023), Moonrock received FCA approval – meaning the drone broker is now fully MGA subscribed.
The firm is now in the process of joining the Managing General Agents Association (MGAA) and applying to become a Lloyd’s holder.
Before receiving FCA approval, Moonrock was a broker with only one product on its books.
Ritterband, founder and managing director of Moonrock, says Insurance times: “AR is a really great way to enter the market. I saw this opportunity in the drone insurance market and didn’t want to wait to get authorized and didn’t have the funds to do so.
“But you get to a point [when] you just need to become fully empowered if [your business is] successful and growing.
Ritterband believes there is a “huge appetite” for drones in the Lloyd’s market as the technology is used more and more in everyday life for applications as diverse as surveying, inspection, transport, television and film.
“This again gives us even more opportunities in the Lloyd’s market,” he adds.
“The breadth of industries using drones now is so prolific that the genie is out of the drone bottle. They help businesses save money and time.”
But the Covid-19 pandemic has really solidified the utility of drones. In 2016, when Ritterband started his business, the use of drones was very much in its infancy, with the drone insurance market in a similar position.
Ritterband continues: “At first I thought ‘Covid will destroy the business.’ But what we found within a few weeks was that because everything was socially distanced, people realized they couldn’t do their jobs without a drone. So Covid was a huge boost to the business as it boosted the whole drone industry.”
For Ritterband, Moonrock’s decision to get permission was influenced by growing problems as the firm was getting to the point where it was “restricted” in terms of accessing data and properly servicing customers.
He explains: “Until now, everything had to be approved by our parent company, Aston Lark. Everything was so slow and inhibited growth.
“But there are advantages to being an AR in that you can start trading quickly.”
For example, Ritterband says payments have been delayed on the AR model.
He explains: “We were paid six to eight weeks after we sold policies. So there was a real delay in premium and commission payments.
“When you are completely [authorised] you can reconcile this much faster, contact the underwriters, get your commission paid faster. It makes a big difference that a business can control cash flow.
After receiving full regulatory approval, Moonrock agreed to a capacity deal with Hiscox.
Ritterband adds: “The delegated authority was with Aston Lark and then we would be their AR as a distributor for that product. We now have our own delegated authority with Hiscox for this drone business.
“We felt it was hindering our growth – getting full permission gave us a real bazooka effect to start growing quickly. We can now trade instantly with third party brokers, network distribution with one or two partners through agreements with retailers, drone school organizations and referral businesses. All these things can be done much faster.