Modern Risk Solutions, a Honan-owned broker that specialises in arranging insurance for tech-focused clients, says current economic conditions are proving to be challenging for the sector as insurers re-adjust their underwriting criteria to account for the riskier business landscape.

Account Director Geoff Stooke says starts-ups – or early stage ventures – in particular are having to provide more information about their business now that valuations are down due to the uncertain state of the economy.

“For my clients the biggest challenge is that investment is not at the valuations that it once was, which means often they're having to raise less money, they have to get to profitability quicker,” Mr Stooke told insuranceNEWS.com.au.

“And certainly we’re seeing management liability insurers asking a lot more questions around software-related ventures. So we're actually finding that they're wanting to look at financials.”

He says there is now more “rigor around their underwriting” compared to five or 10 years ago.

“I think they’re concerned about shareholder risk, insolvency risk and all those kinds of things.”

But Mr Stooke sees a silver lining in these tough times, saying the role of a broker has become even more critical as his clients look to overcome the temporary economic blips.

“I come in fairly early on, usually introduced by an investor or sometimes by someone else within the ecosystem,” Mr Stooke said.

“We will then meet with the founder, have a discussion, and put in place an insurance program that works for them.”

Mr Stooke co-founded Modern Risk Solutions in 2013, focusing on insurance solutions for start-ups and the broader technology sector. Honan acquired the brokerage in November last year.

He says the business also has several software-focused clients as well life science and biotechnology ones, whose insurance needs are different because they tend to grow at a more rapid pace.

“So we have a greater level of interaction with them, often checking in multiple times a year with them to see if their requirements have changed,” Mr Stooke said.

“It’s very much client-orientated. We don't kind accept off-the-shelf products, we work with the clients on an insurance program.”