A quaint little island off the coast of England is the perfect backdrop for a jolly seaside holiday. But how about the home of a diverse and bustling fintech ecosystem?
While it may come as a surprise to those not in the know, the Isle of Man is famously home to a booming insurtech and insurance hub, with the latter representing 22.4 per cent of the island’s GDP. Life insurance is a particularly prominent facet of the industry, as well as the island being home to several world-leading brands, including Zurich International and RL360.
But what is it about this island, home to motorbikes and stubby-tailed cats, that is so attractive to financial services?
A regulatory perspective
The sector has become widely known for its security and stability, a reputation helped in part by a strong regulatory environment that ensures customers are always put first.
“It’s all about the consumer promise. The reason for insurance always comes down to a person’s time of need – that’s when insurance pays out. Making that journey easier, more efficient, and more transparent for the customers is the future. If you satisfy the customer, you deliver a very successful industry,” said John Spellman, chair of the islands insurtech working group.
Not only is the regulatory landscape strong, but it’s also accessible. If you have an issue you’re more likely to be able to meet in person to discuss issues, rather than deal with a division of 100 to 200 people for a problem. A regulatory sandbox is also now available, allowing financial services products to be tested in a controlled environment.
Ros Lynch, head of supervisory practices and innovation strategy at the Isle of Man Financial Services Authority said: “We have all the same international standards and all the same regulatory requirements written into our own legislation. What makes us different is that we are far more accessible than other regulators. We’re smaller, but that makes us more nimble and agile. We can actually speak to individuals from companies and really get to know the firms we have.”
A close community
Being able to sit down with people is another key benefit of the island’s role as a hub. The community present within the ecosystem is very close-knit, with collaboration entirely at the forefront.
Lyle Wraxal, CEO of Digital Isle of Man, said: “It’s a very diverse but close-knit community. If you’re not talking to the right person then they will know the right person to talk to.”
“Culturally it’s very different here to some of the other tech hubs, it’s a real breath of fresh air”
“The ability to share ideas and problems is a huge benefit of being on the island,” added John Spellman. “Having a close community meant that whenever we had a problem, we would come together and approach the government together. You were always able to access a minister to get the to understand the problem at hand. Working together we always managed to find a solution.”
The Isle of Man is all about traditional values. It prides itself on being a good place for people to work as well as raise a family. Instead of being stuck in rush hour or fighting the rest of the rat race for your commute, you can take a breezy drive through the countryside and coastal villages to get to the office.
Wraxal said: “You don’t have the hustle and bustle on the island as you do in bigger cities and hubs. You’re still close enough to jump on a plane and go into the city to talk to your prospective clients while living on the island. It really lends itself to creativity but also a work-life balance.”
Accelerating the industry
In order to help boost its ecosystem, the government has been working on a number of initiatives to bring new innovation to the island. The first of which was the recently completed insurtech accelerator programme in partnership with the global innovation ecosystem and early-stage investor, F10. Seven scale-up companies hailing from the UK, Europe, and Singapore were selected to take part from over 70 applications. The cohort participated in masterclasses and receiving mentorship and support from several established insurance partners.
Marc Hauser, head of F10 Europe, said: “After over a year of early talks and then close collaboration with Finance Isle of Man we reached an important milestone. I couldn’t be any prouder of what the ministry, the participating insurance companies, and the start-ups have achieved.
“We absolutely exceeded our expectations. Not only did we raise awareness of Insurtech on the Island, but insurers also became more proficient in collaborating and start-ups were able to discover new business opportunities.”
The programme concluded with a demo day event, where each company in the cohort pitched their offerings to a room full of people from the island’s industry, as well as Chief Minister of the Isle of Man Hon Alfred Cannan, MHK.
Michael Crowe of Finance Isle of Man said. “To do a big fintech project, it makes sense to have it anchored within our largest industry with a ready-made community that could mutually help each other.
“We’ve been able to highlight to the cohort aspects of the Isle of Man industry. We’ve introduced them to our insurance community and insurance businesses and had them work together, whether that’s companies based on the island, the advisory community, or the regulator. Everyone has been involved to help refine proposals and build connections between the cohort and our ecosystem.”
Fintech Innovation Challenge
Up next on the list is the island’s first fintech innovation challenge. Here the industry is calling on global fintech to help develop the island’s fintech sector.
A collaboration between Finance Isle of Man, Digital Isle of Man, the Isle of Man Financial Services Authority (IOMFSA), and supported by Deloitte, the challenge is a drive towards creating sustainable economic growth as well as establishing the isle of man as a centre of excellence in the ecosystem.
Lyle Wraxall, CEO at Digital Isle, said: ‘The Challenge is a brilliant opportunity for businesses around the world to scale up their technology-based solutions in the collaborative and creative ecosystem we have here in the Isle of Man.
“This challenge is all about looking at what we have on the island and understanding the problems. We’re also exploring what successful fintech ecosystems look like and what foundational components are required to build a thriving ecosystem. The fintech challenge is based on those foundational elements and being able to leverage those in our ecosystem.”