A formula for future-proofing
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A formula for future-proofing


Insider Publishing Group, in partnership with Nuveen, kicked off 2023 with a visit to Bermuda, where Meg Green, editor of Insider Engage, Insurance Insider's sister publication, hosted a fireside chat with Mosaic Insurance co-founders Mitch Blaser and Mark Wheeler to give a Class of ’21 perspective on what the future holds for the market.

Mosaic’s Mitch Blaser and Mark Wheeler invested their collective years of experience into launching a “next-gen” specialty insurer in 2021. Speaking to a select audience of Bermuda professionals at the "New Year, New Perspectives" earlier this month, the seasoned duo discussed Jan 1 reinsurance renewal dynamics, as well as strategic challenges facing the industry, including ESG imperatives.

Veteran underwriter Mark Wheeler likened the unfolding reinsurance renewal season being experienced by buyers to the five stages of grief: “There's been a denial, then an anger, then a bargain, depression and acceptance,” he said.

“But, seriously, it is amazing how quickly the reinsurance market came together at the end of the day. I’ve seen a number of reinsurance seasons that have run out into January and February, and I think the industry has responded phenomenally well [this year].”

Wheeler said many buyers are still feeling depressed, but hopefully reaching the acceptance stage soon: “In contrast to property catastrophe, the casualty and specialty lines renewals were more stable… the market was up around about 5%, and not spectacular in that sense. But I think it puts us all in a pretty strong place to rebuild balance sheets.”

Veteran underwriter and Mosaic co-founder Mark Wheeler

Mosaic styles itself as a next-generation global specialty insurer with a structure that combines Lloyd’s of London strength with a global distribution network. Led by its Lloyd’s Syndicate 1609, coupled with wholly-owned capital management agencies in Bermuda, London, Europe, Canada, the US, Dubai, and Singapore, Mosaic aims to provide clients with syndicated solutions to their most complex risks.

The insurer’s focus is on political risk and political violence, cyber, transactional liability, financial institutions, professional liability, and environmental liability. Meg Green asked if the volatility being experienced in the property cat segment has spilled over into liability lines?

“We are all part of the same ecosystem, obviously, and you can’t not be impacted by property in one way or the other,” Wheeler said, adding Mosaic itself is more exposed to man-made cats rather than property business.

Macro-economic matters

Mosaic co-founder Mitch Blaser pointed to converging macro issues that are impacting on the liability side of every insurer’s business, in addition to pure underwriting factors such as high cat losses that hit the property side, for example.

If you're a big balance-sheet insurer or reinsurer, rising interest rates shrinks capital capacity because of falling bond values, he said: “Also, whatever part of the business you’re in, everyone has to think about inflation, because at some point, it catches up in your losses. It’s not avoidable.

“We also have social inflation happening, which is really affecting the liability business.”

“So, there’s all these factors adding up, but directionally they’re all impacting rates and this industry in a similar manner. And we’re going to have to think about how that plays out over time.”

ESG elements

Against a background of a more dynamic market, insurers today also have to tighten the focus on their environmental, social and governance (ESG) risk profile, Blaser believes. What many in the industry saw as a temporary distraction is now considered a differentiating factor among carriers and underlying clients, he said: “Being a start-up, we had the advantage of thinking about it as [something] in the fabric of what we were building from the beginning.”

Mosaic's co-CEO Mitch Blaser

Blaser believes investors and capital providers consider carriers’ ESG performance when they make decisions about deploying capital: “And you have to think about it in terms of social responsibility and what you’re writing on the liability side and about how that's impacting the world and society; you can't operate in a vacuum.”

ESG performance has a role to play in improving underwriting performance, Wheeler added: “Risk selection is the most important part of insurance underwriting and ESG can bring some really useful metrics to bear in terms of quantifying risk on the liability side.”

Mosaic itself recently announced a partnership with Aon and the financial services provider Apex Group, whereby Apex Protect can offer enhanced directors and officers (D&O) coverage for funds, factoring ESG credentials into insurance risk assessment. Its claimed advantages include significantly quicker turnaround times, with instant pricing discovery for D&O insurance for new or existing funds, as well as tailored policy wording.

Tech challenges ahead

Pricing, product innovation and process should be the industry’s big medium-term priorities, according to Wheeler and Blaser. The industry has to produce an improved return on capital and that requires a better understanding of pricing and potential loss aggregations, Wheeler warned: “The other imperative is for the industry to get expenses under control and be passionate about automation, in particular.”

Blaser echoed Wheeler’s emphasis on modernization and extolled the potential of so-called plug-and-play technology. As the global insurance market has evolved, it has created a byzantine labyrinth of systems that don’t easily connect, Blaser said: “Now, everybody is starting to see the potential for API gateways to force systems to talk to one another without being connected…and that technology is much easier to develop and access and put together.”

As a start-up, Mosaic has been able to tackle three technology pillars simultaneously, Blaser explained: front-end algorithms for underwriting tools; straight-through processing of data; and data harvesting for analytics and sharing with trading partners.

“We want to pull data on a consistent and reliable basis for our partners and for our underwriters, that they can share. We want real-time access, and instead of waiting three months for a bordereau, we want it to happen right away, so we can make decisions today,” Blaser said.

Future proofing Mosaic

With Mosaic approaching its second birthday Feb 4, Blaser and Wheeler have been reflecting on the next stage of development for their nimble, next-gen brainchild.

Global expansion and the growth opportunities available in Mosaic’s seven product lines is a priority for Wheeler: “Ultimately, growth mainly comes from globalization and deeper product penetration, and it comes from [exploiting] technology.”

In the context of new product development, Wheeler sees the potential for growth in non-tangible insurances, such as digital risks, IP and reputation risk, particularly in US markets: “I think those are really huge potential products.”

Blaser said he agrees product development is an essential driver of growth and means of ensuring that insurance remains relevant in a fast-moving risk environment: “Our business needs to start seeing around the corner, to understand what’s coming our way. And not wait to get whacked by it (as happened with Covid). I think that’s really where the growth is going to come from—being innovative.”


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