Last month we kicked off our TigerTech Interview series with an engaging discussion with Gretchen Hayes from Chicago based Venture Capital firm Sandbox Industries.
For this months interview we wanted to get the entrepreneur’s perspective on the future of the insurance industry and the technology that is empowering, and at times, disrupting it.
Recently, TigerTech caught up with Andy Yeoman, Cofounder and CEO of Concirrus, whose software enables behavioural-based underwriting and risk management for commercial marine and motor insurers.
In this two-part series we hear from Andy about his views on the challenges and opportunities facing the insurance market, and how it’s right on the edge of unstoppable technological change which will see the emergence of an entirely new business model for insurance.
What technology do you think will have the greatest impact on the industry in the next 5 years? (AI, Machine Learning, Blockchain etc)
There are many technologies entering the market today that will undoubtedly have an impact on the industry, but rather than focus on the technology itself, I’m perhaps more fascinated by the business model that it can enable.
If you look back to when the internet dot.com era was really booming, everyone was focused on how technology would be used to impact existing industry; but when evaluating the most successful companies to emerge from the dot.com era, it was those that put technology at the core of their proposition and used it to be more customer-centric that emerged as the iconic brands we recognise today.
Successful online brands like Amazon recognised that it’s much more than becoming “X but for the internet”, it’s about building a customer-centric brand that leverages technology to empower its value proposition.
Looking at an example in the insurance industry: when Direct Line developed their proposition to sell insurance products over the phone they did more than just employ larger teams at call centres — they re-imagined the entire purchasing experience and optimised it to be done over the phone; an approach that has proven wildly successful.
Technologies like AI, machine learning and blockchain will play a part in the future of the industry, but these are enabling technologies. The truly successful insurers of the future won’t provide insurance ‘but for’ blockchain, or insurance ‘but for’ artificial intelligence, they will be companies that leverage these powerful technologies to redefine the insurance business model.
As a comparison to the insurance market, the London Stock Exchange processes more transaction by midday on its second day of trading than Lloyd’s does in their entire year. Stocks are bought and sold in open, digitised, and regulated marketplaces in real-time, and I believe that new technologies will facilitate the emergence of a new business model for insurance — one that allows risks to be written and placed in near real-time and traded like stocks.
What do you see as the most pressing challenges that the industry faces as it looks to evolve?
The most pressing challenge that I can see is its willingness to change.
That being said, treating the insurance market — especially the London market — as an ‘industry’ to be disrupted is, I believe, doing a disservice to the many people who have made and kept London as the centre of the marine market for the last 200 years.
Having spent a few years in the Lloyd’s and London market and spoken with hundreds of people, my single biggest realisation is that this ‘industry’ is actually more of a tight knit ‘community’, comprised of people who have built careers and reputations on trust and personal relationships.
For the industry to adopt and embrace new technologies and evolve the business model to have technology at its core, it must do so while allowing the many market players to keep their reputations and relationships intact.
Concirrus has a set of technologies that reduce overall risk and we believe that widespread adoption provides an environment where everyone wins.
Our experience is that no-one wants to be first but equally no-one wants to miss out. In the coming months we’ll see the beginnings of significant technological adoption and the market will start an unstoppable journey of change.
Part 2 -
In part 2 of our interview, we will discuss emerging technology trends that could impact the evolution of the insurance industry and how these technologies could open up a significantly larger market of opportunities across the industry.
Andy co-founded Concirrus in 2012 following a long and successful track record in telematics and extensive experience of fast-growth business strategies, turnarounds, mergers and acquisitions. Prior to Concirrus he worked with Trimble Navigation where, as Managing Director, he expanded the business across Europe, America and Asia.
Andy has spent many years working with insurers across both commercial and personal lines to transform their businesses through technology. As a result, he has established himself as a thought leader in the Internet of Things and is passionate about the new business models that technology can unlock for insurers and their customers.
Concirrus are pioneering a real-time, behavioural approach to underwriting and risk management, made possible by technology like the internet of things, ubiquitous and near free communication, and cheap computing. Concirrus is focused on the commercial marine insurance market and personal lines motor.
As well as being the CEO of Concirrus, Andrew is the Cofounder of Youtoggle, holds non-executive directorships and Chairman roles and regularly advises the VC and PE community.
Concirrus is the creator of Quest, real-time behavioural insights software for commercial marine and motor insurers. Quest helps commercial marine and motor insurers understand the behaviour of the insured asset or individual and actively manage their risks in real-time.
Quest, accesses and interprets large sets of data, such as vessel statistics, movements, machinery information and driver behaviour, and combines this with an insurer’s own information to reveal the behaviours that correlate to claims.
This new way of working presents exciting opportunities for marine and motor insurance underwriters to manage the loss ratios of their risk pools, and accurately price new business with or without claims history. As a result, marine insurers can offer enhanced customer-centric products, reduce losses and operating costs, increase profit margins and build more collaborative relationships with their brokers and customers.