# Where to build the agent insurer: what changed in v1.1.0, sgit.ai > The changes to the article "Where to build the agent insurer" in v1.1.0, paragraph by paragraph. *Source: · sgit.ai v0.7.87 · this file is generated from the same content as the page, so the two cannot drift. Every page on this site has a `.md` twin; internal links below point at them.* --- [Home](../../../index.md) / [Articles](../../index.md) / [Where to build the agent insurer](../../where-to-build-the-agent-insurer.md) / [Versions](../where-to-build-the-agent-insurer.md) / v1.1.0 # Where to build the agent insurer: what changed in v1.1.0 From v1.0.0 (2026-10-28, `a1b5e3bf2`) to v1.1.0 (2026-10-28, `1b709edea`), paragraph by paragraph. 18 paragraphs added, 17 removed, 8 changed in place, 27 unchanged. About 981 words added and 948 removed. Insertions are marked like this, deletions like this; unchanged runs are folded to one line; figures appear as their file names. [all versions](../where-to-build-the-agent-insurer.md) · [v1.2.0 →](v1.2.0.md) # Where to build the agent insurer: underwrite and carry the risk in London, sell into the US,UScarryand the risk in Bermuda,EU, raise the capital in theoneGulf,go, and aboutwhat£4£10 million toorstart,£50withmillionthebuyscapitalinfollowing from the limits soldcover Summary: The last three articles described insuring an agent row by row from its behaviour policy, who could carry the risk, and the vendor's share of it. This one asks where such a company should be built, from a regulatory and an investment point of view, and how much it would take to start.take. My answer is thatLondonitfirst,hasformoretwothanofoneitshome,threebecause it does more than one job.jobs. It should start as a managing agent in London,there, pricing and selling on a Lloyd's syndicate's capital, because that is where two of today's AI agent covers are written, authorisation takes up to nine months, and an intermediary's own capital is the higher of £5,000 or 2.5% of its income.income; and it should carry the risk there too, as a UK insurer through the PRA's mobilisation regime or with capital at Lloyd's. It should sell into the US through surplus lines, a $143.3 billion market built for risks without a loss history, and into the EU by one registration, once Europe's product rules make software a product on 9 December 2026. WhenTheitsGulf'sloss record allows, it should carry the risk itself in Bermuda, where a small commercial insurer has a $1 million floor, an innovative class and a sandbox exist, and most insurance-linked securitiesfunds are listed. The Gulf is a place to raise capital before it is a market.capital. On the money, I built a small model with every assumption stated:stated, and the point it makes is that what the money buys is cover. Two years of running the company cost about £4.35 millionmillion;foreverythingtworaisedyears as a managing agent, a seed or Series A; then capitalabove that followsbacksfrompolicies,the limits sold,and because every row is capped.capped,Forthe2,000ceilingagentsofwithcover£160follows from it. Raised in one go, £10 million backs about £94 million to £188 million of limits,cover,if1,177 to 2,354 agents at £80,000 each; £50 million backs about £761 million to £1.52 billion, 9,510 to 19,020 agents, depending on how much of the book one shared failure could hit 5%attoonce.10%Theofbiggerthemthe cover the company aims for, the more it should raise at once and half is reinsured, the capital is £4.8 million to £9.6 million. At 10,000 agents, £24 million to £48 million.start. !shot wh-route.webp | images/ | ThreeUnderwritehomesandforcarrythreethejobs: underwriterisk in London, sell into the US and EU, carryraise the riskcapital in Bermuda.one go. | process 1 unchanged paragraph, under In short {#in-short} • **The company does three jobs, soanditLondoncansuitshavetwothreeofhomes.**them.** Pricing and selling, distribution, and carrying the riskrisk;needdistributiondifferentgoeslicenceswhereandthedifferentcustomersmoney.are. 1 unchanged paragraph • **Carry the risk in London too.** A UK insurer through the PRA's mobilisation regime, or capital at Lloyd's behind a syndicate. 2 unchanged paragraphs • **Carry the risk in Bermuda when the record allows.** A $1 million floor for a small commercial insurer, an innovative class and a sandbox. • **Raise capital in the Gulf before selling there.** Saudi insurers need SAR 300 million paid up; the region's funds are the opening. • **About £4.35 million to start.** Two years as a managing agent, in a model with every assumption stated. • **Then the capital follows from the limits sold.** £4.8 million to £9.6 million for 2,000 agents; £24 million to £48 million for 10,000. • **What the money buys is cover.** About £4.35 million runs the company for two years; everything raised above that backs policies. • **£10 million in one go backs about £94 million to £188 million of cover.** 1,177 to 2,354 agents. • **£50 million in one go backs about £761 million to £1.52 billion.** 9,510 to 19,020 agents; the bigger the aim, the more to raise at the start. 2 unchanged paragraphs, under The question, and why it has more than one answer {#question} I think the honest answer is that it hascan have more than one home, because it does more than one job. A managing agent prices and sells policies on an insurer's behalf and carries no risk on its own balance sheet; it needs a licence to distribute insurance and a carrier willing to lend its capital. An insurer pays the claims and has to hold capital against a bad year. Distribution needs licences where the customers are. Those three jobs are regulated differently in each place, and the best place for one is not the best place for the others. !shot wh-homes.webp | images/ | The UK, US, EU, BermudaEU and the Middle East:UAE: what each asks of a managing agent and an insurer. | comparison 2 unchanged paragraphs, under Start in London {#london} The UK licence is within reach of a start-up. A managing agent is either authorised directly by the FCA, which "can typically take up to nine months from when an applicant starts preparing its application", or works as an appointed representative of a firm that is; its own capital requirement, if it does not hold client money, is the higher of "GBP5,000 or 2.5% of annual income from regulated insurance distribution activity", with professional indemnity cover on top ([DLA Piper](https://intelligence.dlapiper.com/managing-general-agents/?c=GB), September 2026). ForThethesamelater step, the PRAcity has run a mobilisationthe regime for new insurers since 31 December 2024, "to facilitate new insurer expansion and entry into the UKnextmarket"step,([Bank of England](https://www.bankofengland.co.uk/prudential-regulation/new-insurer-start-up-unit)), with a minimum capital floor of £2.4 million for a general insurer.below. 7 unchanged paragraphs, under Sell into the US {#us}, The EU, second {#eu} ## Carry the risk in Bermuda {#bermuda} When the loss record exists and the company is ready to carry risk, I would do it in Bermuda. Its regime has a class for this stage: a Class 3A "Small commercial insurer" holds capital set by a risk-based formula, with "a $1 million floor" ([BMA](https://bma.bm/insurance-licensing)). It has a class for an insurer that "intends to carry on general business in an innovative manner", and a sandbox for "a company aiming to carry on general business in an innovative and experimental manner"; cyber insurers have used both, and one, Breach Insurance, moved from the sandbox to the innovative class in 2023 ([BMA](https://www.bma.bm/insurance-innovation)). And it is where risk capital meets insurance: the Bermuda Stock Exchange listed "more than 93% of global issuance" of insurance-linked securities in 2025, including "new cyber catastrophe bonds" ([Insurance Business](https://www.insurancebusinessmag.com/reinsurance/news/breaking-news/bermuda-stock-exchange-seizes-93-of-ils-market-as-cat-bond-issuance-explodes-564989.aspx), 11 February 2026). Once agent risk has a record, that is the market that will take its tail. The UK is the alternative, with the PRA's mobilisation regime and the same Solvency-style discipline; and an insurer that wants EU clients directly may need an EU carrier as well. But for a first balance sheet, Bermuda's floor and its capital markets make it the place I would look first. ## The Middle East, for capital first {#gulf} The Gulf has new regimes and a great deal of money, and I think its first role is the money. As an insurance market, its entry costs differ widely: in Saudi Arabia an insurer's paid-up capital "shall not be less than three hundred million Saudi riyals" under the law as amended in 2021; in Abu Dhabi, the ADGM's captive rules started from US$150,000, and its regulator proposed in December 2025 that insurers hold "120% of the ASCR under normal circumstances" ([Reinsurance News](https://www.reinsurancene.ws/fsra-proposes-comprehensive-updates-to-adgm-insurance-regulatory-framework/)). We could not read the DIFC regulator's own pages, so its figures are from secondary sources and are left out here. As a source of capital it is a different story: the region's funds invest in balance sheets of exactly the kind the third stage needs, and the ADGM's regulator is rewriting its insurance rules as it does so. I would raise there, and sell there later. ## Carry the risk in London too {#carry} When the company is ready to carry risk itself, I would do that in London as well, so that the underwriting and the balance sheet sit under the same supervisors and the same market. There are two ways in. The first is a UK insurer: the PRA has run a mobilisation regime for new insurers since 31 December 2024, "to facilitate new insurer expansion and entry into the UK market", an optional stage of up to twelve months with restrictions that begins at authorisation ([Bank of England](https://www.bankofengland.co.uk/prudential-regulation/new-insurer-start-up-unit)), and a general insurer's minimum capital floor is £2.4 million. The second is capital at Lloyd's: "A Lloyd's syndicate is formed by one or more members joining together to provide capital and accept insurance risks on a several liability basis", and the members' capital is held as Funds at Lloyd's ([Lloyd's](https://www.lloyds.com/market-resources/member-services/about/what-is-a-member)). A company that starts as a coverholder already works inside that market, so putting its own capital behind its own book is a short step. An insurer that wants EU clients directly may need an EU carrier as well, under Solvency II's €2.7 million floor. That can wait for the second market. ## The Gulf, for capital {#gulf} The Gulf has new regimes and a great deal of money, and I think its role here is the money. The UAE's two financial centres are both reworking their insurance rules: in Abu Dhabi, the ADGM's regulator proposed in December 2025 that insurers hold "120% of the ASCR under normal circumstances" ([Reinsurance News](https://www.reinsurancene.ws/fsra-proposes-comprehensive-updates-to-adgm-insurance-regulatory-framework/)); the DIFC's own pages could not be read, so its figures are left out. The region's funds invest in balance sheets of exactly the kind the third job needs. I would raise there, and leave selling there for later. 2 unchanged paragraphs, under How much it would take {#money} **Stage one, two years as a managing agent: about £4.35 million.** A team of eight in the first year and fifteen in the second, at £150,000 each including everything, and £450,000 a year for regulatory, legal, actuarial, professional indemnity and technology costs: £1.65 million in the first year and £2.7 million in the second. No capital backs the policies, because the carrier's does. That is a seed or Series A, and the market is funding it: insurtech funding was "US$5.08 billion" in 2025 ([Insurance Journal](https://www.insurancejournal.com/magazines/mag-features/2026/03/09/860638.htm), 9 March 2026, citing Gallagher Re), and in the first quarter of 2026 "InsurTechs linked to AI liability and cyber insurance attracted USD 444.84 million" ([Reinsurance News](https://www.reinsurancene.ws/global-insurtech-funding-holds-firm-as-ai-dominates-q126-investment-gallagher-re/), 7 May 2026). AIUC has raised $55 million in two rounds, and Harbor was reported this month to have raised a $10 million seed. **Stage two, carrying the risk: the capital follows from the limits sold.** This is where the deterministic policy pays off. Because every row is capped and every unnamed capability excluded, the worst year can be bounded from the limits on the book: take all the limits sold, the share of them one shared failure could hit at once (one model's flaw, one tool's bug, every agent built on it), keep half after reinsurance, and add a 20% buffer. [figure wh-capital.webp] Capital to carry the risk, from the limits sold and the share one shared failure could hit. Illustrative. | chart With £80,000 of limits per agent, as in the worked example: | Agents | Limits on the book | 5% hit at once | 10% hit at once | |---|---|---|---| | 500 | £40 million | £1.2 million (the UK floor makes it £2.4 million) | £2.4 million | | 2,000 | £160 million | £4.8 million | £9.6 million | | 10,000 | £800 million | £24 million | £48 million | So my opinion: raise about £5 million to start, which is stage one with some headroom; plan a second raise of £5 million to £10 million to carry the first two thousand agents, from investors who fund balance sheets; and by ten thousand agents, the capital is a reinsurance and capital markets question, which is where Bermuda comes in. The share hit at once is the number that matters most, and it is the one with no loss data behind it yet: it is why the first books should be small and spread across models and tools. **Running the company: about £4.35 million for two years.** A team of eight in the first year and fifteen in the second, at £150,000 each including everything, and £450,000 a year for regulatory, legal, actuarial, professional indemnity and technology costs: £1.65 million in the first year and £2.7 million in the second. The market is funding companies like this: insurtech funding was "US$5.08 billion" in 2025 ([Insurance Journal](https://www.insurancejournal.com/magazines/mag-features/2026/03/09/860638.htm), 9 March 2026, citing Gallagher Re), and in the first quarter of 2026 "InsurTechs linked to AI liability and cyber insurance attracted USD 444.84 million" ([Reinsurance News](https://www.reinsurancene.ws/global-insurtech-funding-holds-firm-as-ai-dominates-q126-investment-gallagher-re/), 7 May 2026). AIUC has raised $55 million in two rounds, and Harbor was reported this month to have raised a $10 million seed. **Backing the policies: what the rest of the money buys is cover.** This is where the deterministic policy pays off. Because every row is capped and every unnamed capability excluded, the worst year can be bounded from the limits on the book: take all the limits sold, the share of them one shared failure could hit at once (one model's flaw, one tool's bug, every agent built on it), keep half after reinsurance, and add a 20% buffer. Turn that round, and every pound of capital raised above the running costs sets a ceiling on the cover the company can sell. So rather than raising in stages, the company can raise once, for the cover it intends to sell from the start, and the size of the raise decides that ceiling. [figure wh-capital.webp] The ceiling of cover a raise of £10 million or £50 million can back. Illustrative, from capital.py. | chart With £80,000 of limits per agent, as in the worked example, and two years of running costs taken out first: | Raised in one go | Capital backing policies | If 5% can be hit at once | If 10% can be hit at once | |---|---|---|---| | £10 million | £5.65 million | about £188 million of cover, 2,354 agents | about £94 million of cover, 1,177 agents | | £50 million | £45.65 million | about £1.52 billion of cover, 19,020 agents | about £761 million of cover, 9,510 agents | Both are above the UK's £2.4 million floor. At the worked example's rate, £6,720 a year for £80,000 of cover with five enforced controls, the £10 million book could earn about £7.9 million to £15.8 million of premium a year, and the £50 million book about £64 million to £128 million; those are ceilings at full use of the capital, not forecasts. So my opinion: decide the cover first, and raise for it in one go. £10 million is enough to prove the model on about a thousand to two thousand agents; £50 million is the raise for a company that means to insure ten to twenty thousand agents from the start, and to be the place the large providers come to. The share hit at once is the number that matters most, and it is the one with no loss data behind it yet: it is why even a large book should start spread across models and tools. 4 unchanged paragraphs, under What this does not claim {#limits} • **The Middle East figures are thinner.** The DIFC's pages could not be read; the ADGM captive figures are from its 2015 rules; Saudi Arabia's guidelines and its law give different minimums, and the law's SAR 300 million is used. • **The Gulf figures are thinner.** The DIFC's pages could not be read; the ADGM's proposal is a discussion paper, not a rule. • **The premium figures are ceilings.** They assume every pound of capital is used at the worked example's rate; a real book would sell less, and price each agent on its own rows. 1 unchanged paragraph • **Tax is left out.** Bermuda'sWhere15%tocorporatebeincometaxedtaxis a separate question from 2025 applies onlywhere to groupsbewith revenue of €750 million or more.regulated. 5 unchanged paragraphs, under Where this comes from {#sources} [all versions](../where-to-build-the-agent-insurer.md) · [v1.2.0 →](v1.2.0.md) --- *[Site index for agents](../../../llms.txt) · [HTML version](https://newsroom.sgit.ai/articles/versions/where-to-build-the-agent-insurer/v1.1.0.html)*