The Voice of Insurance

Today’s guest is one of the smartest people in the insurance sector and I am really lucky to have been able to spend time talking to him fairly regularly over the course of the last few years. I first got to know him just as the whole insurtech movement started to really take shape in around 2016 to 2017 and ever since that time he’s always been open and honest about the way he appraised the new wave of technological investment sweeping through the industry. He never lost his critical faculties and never got caught up in the hype that defined part of that era. But that doesn’t mean he’s a sceptic either – he’s actually quite a rare animal – an enthusiastic but realistic adopter and promoter of better ways of doing the business of insurance. Today’s episode is one I am really pleased with because it does the job of a podcast properly. Over the years I have had many enlightening conversations with Adrian just like the one you are about to hear. But up until now I had never recorded one. So prepare yourself for a masterclass in what the smart money thinks about the state of insurtech. Embedded insurance, insurtech bubbles – whether they existed and whether they have now burst – how the hard reinsurance market will affect start-ups and even the very logic of the phrase insurtech itself are all addressed in the discussion. I’ll wager you’ll get more benefit from listening to Adrian for 45 minutes than you will from attending any 3-day Insurtech conference. LINKS We thank our naming sponsor AdvantageGo: https://www.advantagego.com/ TRANSCRIPT https://www.thevoiceofinsurance.com/post/ep145-adrian-jones-transcript -------- The views expressed are the views of Adrian Jones as of the date hereof. Hudson Structured Capital Management Ltd. (“HSCM”) undertakes no responsibility to advise you of any changes. Neither the podcast nor any of the information contained herein constitutes an offer to sell, or a solicitation of an offer to buy, any security or instrument in or to participate in any trading strategy or investment vehicle. Past performance is not indicative of future results. There can be no assurance that any objectives can be achieved or are realistic in any given market condition. This podcast may contain forward-looking statements; such statements are subject to various risks and uncertainties. Forward-looking statements reflect our views as of such date with respect to possible future events. Actual results could differ – perhaps materially – from those in the forward-looking statements. The HSCM Public InsurTech Index (HPIX) tracks the price movements of a portfolio of common equity securities listed in the last 10 years by companies operating in the United States insurance sector with novel business models differentiated by technology. The HPIX components, currently 22 companies, describe themselves as having novel business models differentiated by technology. The Index components also meet certain criteria, defined in the Index Guideline (available at Solactive.com), concerning minimum size, length of public listing, geography, and certain other aspects of the business model. The chart illustrates the price movements of HPIX starting with an initial value of 100 on the first trading day of 2020. Solactive AG (“Solactive”) is the licensor of HSCM Public InsurTech Index (the “Index”). The financial instruments that are based on the Index are not sponsored, endorsed, promoted or sold by Solactive in any way and Solactive makes no  express or implied representation, guarantee or assurance with regard to: (a) the advisability in investing in the financial instruments; (b) the quality, accuracy and/or completeness of the Index; and/or (c) the results obtained or to be obtained by any person or entity from the use of the Index. Solactive does not guarantee the accuracy and/or the completeness of the Index and shall not have any liability for any errors or omissions with respect thereto. Notwithstanding Solactive’s obligations to its licensees, Solactive reserves the right to change the methods of calculation or publication with respect to the Index and Solactive shall not be liable for any miscalculation of or any incorrect, delayed or interrupted publication with respect to the Index. Solactive shall not be liable for any damages, including, without limitation, any loss of profits or business, or any special, incidental, punitive, indirect or consequential damages suffered or incurred as a result of the use (or inability to use) of the Index. For more information about HSCM, including risks and other disclosures, please refer to www.hscm.com.

I think Talbir Bains is one of the most single-minded and driven people I have ever had on the show. He is also moving incredibly quickly. Since the last time I spoke to him back in 2020 his Volante Global business has grown premium substantially, found new ownership as part of the Acrisure Group and launched a Syndicate at Lloyd’s. I just had to get him back to make sure we kept up with all the things that have happened in the last 24 months. And I am really glad I did, because despite the apparent whirlwind surrounding him and his fast-growing business, it is Talbir’s rock-solid convictions that permeate every minute of this podcast. Volante is a business with a focus on underwriting profit that is bordering on obsession and five minutes with Talbir can leave you in no doubt that this company’s uncompromising philosophy and culture originates directly from him. Talbir has also been through a life-changing personal experience since we last met and that only heightened the intensity of talking to him face to face once more I can’t help thinking we could all learn an awful lot not just from listening to what Talbir has to say, but by studying precisely what he has done to position Volante as an underwriting business that is so consistently highly rated and respected by its peers and stakeholders. Of course, living and breathing underwriting discipline is far easier said than done, so listen on and see if you can get some of Talbir’s passion and belief to rub off onto you. LINKS We thank our naming sponsor AdvantageGo: https://www.advantagego.com/ We also thank this Episode’s advertising supporter Oxbow Partners https://oxbowpartners.com

Today’s guest is one of the original poster children of the Insurtech movement and has been applying technology to solve insurance problems since long before the phrase insurtech was coined. Back when the first insurtech conferences were getting started he was a highly sought-after speaker. If you listen today you’ll soon understand why. Chris Cheatham founded RiskGenius in 2012 and in 2020 that business was absorbed by fellow insurtech and online exchange Bold Penguin Very soon afterwards the enlarged Bold Penguin became part of the American Family Insurance group. Chris’s story is one of entrepreneurship and a path into insurtech maturity. Unlike many in the first wave and many of the speakers at those early conferences, neither RiskGenius nor Bold Penguin made any claim to be insurance disruptors intent on revolution and disintermediation. Instead these businesses were industry partners, looking to remove friction and pain points, largely for existing insurance entities. As the tech funding climate cools it is their model that is the one gaining traction and adoption from some of the most traditional elements in the insurance value chain. Today’s discussion is really valuable because it mirrors the growing maturity of the insurtech scene and shines lots of light on where things are heading in the short, medium and long term. Chris has been on a remarkable journey – and from this encounter I feel he’s just getting started. No matter where you are sitting in the insurance value chain I think the next half hour will be a very valuable investment of your time. NOTES: Chris mentioned a cool electronic paper tablet called a reMarkable. It does indeed look really cool – any remaining paper junkies should have a look: https://remarkable.com LINKS We thank our naming sponsor AdvantageGo: https://www.advantagego.com/ We also thank this Episode’s advertising supporter Oxbow Partners https://oxbowpartners.com

Today we have a live market where reinsurance capacity has dried up and investors are utterly fatigued or are openly on strike, and so every dollar of spare capital feels twice as valuable as it did last year But at the same time we have a highly sophisticated legacy market that is well capitalised and, because of its relatively solid recent track record, has access to more funding if it needs it. Also legacy infrastructure is probably better equipped to handle anything the live market can throw at it than at any time in its history. Surely in today’s market every live dollar than can be freed up to write new business at tomorrow’s better prices, will be freed up? Now is clearly a great time to be talking to today’s guest. Luke Tanzer is CEO of RiverStone International, a business at the heart of the Lloyd’s and UK company legacy market. RiverStone has a new owner, fresh capital and focus and ambitious international expansion plans. Luke is one of the most engaging members of the legacy community and if you haven’t met him before, I think you’ll find him incredibly insightful and refreshing. And if you still have any outdated ideas about what run-off is in the 2020s, a few minutes in Luke’s company will set you straight. Given what is happening in the live market, Luke and his peers’ profiles are very likely to be raised a notch or two in the next couple of years as excess demand seeks out his capital and expertise, so get ahead of everyone else and listen on. NOTES A couple of unexplained abbreviations. RITC is reinsurance to close, a key part of the Lloyd’s three-year accounting process. DD is of course due diligence. LINKS We thank our naming sponsor AdvantageGo: https://www.advantagego.com/ We also thank this Episode’s advertising supporter Oxbow Partners https://oxbowpartners.com

Normally I have C-suite guests on the programme who are working for companies with tens, hundreds and sometimes low thousands of employees. They generally write between the tens, hundreds of millions or single-digit billions in annual gross premiums. But today’s guests are working on behalf of a marketplace that directly employs 47,000 people and many more offshore. It writes well over a hundred billion dollars in gross premiums and that is a number set to rise sharply as the market continues to harden. This is because together CEO Caroline Wagstaff, and Chairman Matthew Moore, run the London Market Group, the LMG. The LMG is the London Market’s trade body bringing together Lloyd’s and its constituent underwriting businesses, the London company market and the brokers to represent the whole London insurance and reinsurance Market to the outside world and to lobby on its behalf. London is facing a demographic squeeze where its stock of over 50-year-olds exceeds its number of those under the age of thirty. In this lively episode Matthew and Caroline recount the nature of this problem and, more importantly, articulate the plan they have formulated to address it. We also talk about the prospects for the UK regulator to have to take the market’s competitive position into consideration when making and implementing new rules as key financial services reform legislation makes its way through the UK Parliament. The agenda includes the prospect of the UK seeking to develop a ‘red carpet’ welcome to rival that of more nimble and proactive jurisdictions such as Bermuda and Singapore. The continuing iterations of ongoing work to further the London Market brand under the London Makes it Possible banner are another topic of discussion. Matthew and Caroline are passionate and really engaging speakers and this episode will give you a great sense of where the market’s collective marketing and lobbying efforts are being channelled both now and in coming years. LINKS We thank our naming sponsor AdvantageGo: https://www.advantagego.com/ We also thank this Episode’s advertising supporter Oxbow Partners https://oxbowpartners.com

Regular listeners will know that I really rate today’s guests and what they are trying to do for the market. I also find them really good company – they are fun, smart infectiously enthusiastic and are always brimming with new ideas. Every time I have a meeting with them I come away with something new to think about. Listen on and you will too. The Insurtech Gateway has been a pioneer in the insurtech space, providing early stage investment as well as licences, insurance knowledge and industry support and connections to entrepreneurs trying to put innovative insurance ideas into practice. It’s just come through an important milestone. Its inaugural fund is maturing and it second fund has now been raised. In a cooling tech investment climate this as clear a validation of the Gateway’s business model as you’ll need. My conversation with director and co-founder Stephen Brittain (bottom right) and CEO Richard Chattock (top right) is valuable because it brings together everything the Gateway has learned from the cutting edge of insurance investment from the past six years. None of this is theoretical – this is all hard-won experience earned by the risking of real capital in the real world with real people. We examine what has worked and what hasn’t and look at the emerging trends that are going to drive the successful insurtechs of the future. Richard and Stephen make a great pairing. Stephen has been on the podcast many times before but Richard hasn’t. Yet it is Richard who will be familiar to many listeners as he is an insurance lifer with a high profile and long and successful underwriting career who has made the move to venture capitalism. Meanwhile Stephen is an outside innovator looking inwards to insurance. This is an excellent combination and makes for a really relaxed, highly enjoyable and insightful listen. I’m pretty sure you’ll find it both inspiring and useful. LINKS www.insurtechgateway.com

Today’s guest is someone who is bringing a rigorous and effective management style that the London Market might not previously have been accustomed to. Kate Markham brings extensive business experience to the role of running Hiscox London Market. Some of this comes from entirely outside our industry as well as the retail insurance space. Her work in restoring top performance to this Lloyd’s blue-chip and keeping it there has entailed a lot of new management thinking and not inconsiderable culture change to embed a performance mindsight that is bottom-up rather than top-down. It’s refreshing and this podcast dives right into the issues facing Hiscox and the wider London Market on immediate concerns about reinsurance renewals and how they will affect coverage such as property cat, and classes such as specialty and cyber. We also talk about the bigger picture, addressing digital transformation, algorithmic underwriting and the diverse talent requirements of the market of the future. Kate is personable, eloquent and concise as well as being direct and this is a really enjoyable exchange with someone who is right on top of their brief. LINKS We thank our naming sponsor AdvantageGo: https://www.advantagego.com/ We also thank this Episode’s advertising supporter Oxbow Partners https://oxbowpartners.com

Mark Cloutier is a dream guest. And that’s not just because he’s the person some of the smartest financial minds in the industry turn to to shepherd and shape their strategic turnaround investments. Mark Cloutier knows the insurance industry inside and out and from top to bottom, but what makes him a great podcast guest is his openness and willingness to talk about how the insurance, reinsurance and capital markets fit together and interact with each other. He’s also one of the most easygoing people you’ll meet. His job must involve huge stresses and strains, but you would never know if you met him. Well today you do get to meet him and together we’ll go on a grand tour of Aspen and its place in the most dynamic and challenging markets for a generation. Mark’s long career and perspective combined with Aspen’s multi-faceted business model bring a really great insight into this jittery and completely plastic market environment. Inflation, industry capital and investor appetites, property cat, specialty in a post-Ukraine world, the explosion in hybrid carriers, how to handle the ESG challenge – there is valuable understanding and a calm authority backing every statement. LINKS We thank our naming sponsor AdvantageGo: https://www.advantagego.com/ We also thank this Episode’s advertising supporter Oxbow Partners https://oxbowpartners.com

Building a fully digital marketplace for insurance in London has been a tantalising long-term goal for all of my 30-year career. Only too often this has proved a mirage that has turned to sand as the market got close. Dare I say it but this time things seem very different. Now robust core standards are providing foundations of solid rock upon which the market can build with greater confidence. Technology is also more advanced and more readily available at a much more reasonable cost. Today even the smallest player can jump ahead without busting the bank. Indeed the biggest obstacle to accelerated change is now cultural. And that is where the biggest transformation has taken place – in the minds of market leaders. Now instead of the technologists trying to drag the market kicking and screaming towards modernisation change is starting to be demanded of technologists from practitioners themselves. The stars are finally coming into alignment. That’s why I am delighted I could talk to three highly experienced insurance technology experts about this. Kirstin Duffield is CEO of Insurance software business Morning Data and is an advisor to the London Market Data Council, Hélène Stanway also advises the Data Council and is a strategic adviser at r10 Consulting as well as being a senior counsel to numerous other tech bodies. Finally Marcus Broome, is Chief Platform officer at insurance trading platform Whitespace. All have experience providing technological solutions to the Insurance market going back to the early-to mid-1990s. These people have been at the heart of London’s digital journey for the last 25-30 years. They are technologists steeped in deep insurance understanding and their cumulative knowledge of every step and mis-step that the market has taken in that period is second to none. Luckily for you and me they are also a trio of concise and passionate communicators who know how to speak to laypeople. So what follows is a really useful run through of the current market modernisation programmes that dispels a lot of myths and clears up a lot of misunderstanding we might all have about what exactly the latest reforms are and the benefits they might bring to the market. I found it really inspiring and helpful and I’m sure you will too. After this encounter I feel much more confident that the first fully digital fruits of the last 30 years’ labours may finally be within our grasp, particularly if these three have anything to do with it. NOTES: Two acronyms got through unexplained. PAS is a Policy Administration System And GLRC standards refer to the Global Reinsurance and Large Commercial Carrier electronic standards produced by ACORD. LINKS We thank Whitespace for its support today https://www.whitespace.co.uk/

Anyone keeping an eye on the overarching trends in the global wholesale and speciality insurance and reinsurance markets of the last few years cannot have failed to notice the explosive growth of the hybrid insurance carrier. Burgeoning Billions of dollars of premium are being directed in new and interesting ways through a cohort of businesses that ten years ago didn’t really exist. Regular listeners to this podcast will know that this has been a repeated topic of conversation with guests on the show. I think today’s guest will be able to put this topic into context better than almost anyone else. That’s because Bill Jewett CEO of Obsidian Insurance Holdings boasts a more than forty-year career right in the heart of the US and Bermuda reinsurance community. This means Bill is very much one of us and can speak our language. He can also articulate what is happening on the ground because he is personally one of the architects of the hybrid carrier revolution and what looks very much to be a secular change in the distribution of commercial insurance. I had known Bill since his decade at Endurance and was really glad to catch up with him again after such a long time. I’m sure many of you out there will similarly be re-acquainting yourself with an old friend from the business. Bill’s got a great story to tell and this podcast will dispel any lingering myths or doubts you have about the major changes afoot in how many MGAs will source their capital in the future. LINKS We thank our naming sponsor AdvantageGo: https://www.advantagego.com/ We also thank this Episode’s advertising supporter Oxbow Partners https://oxbowpartners.com