As part of the launch of our Insurtech 100, our CEO Matt Connolly and Jonathan Swift, the Content Editor of the UK’s Insurance Post, caught up with Adam Rimmer (Co-Founder of FloodFlash), Jamie Yoder (President of Snapsheet) and Adrien Cohen (Co-Founder and President of Tractable).
Together the three Insurtech leaders present a deep-dive into the different ways they’re shaking up the claims process, how they have adapted to Covid-19, and what their plans are for the next 12-months.
To watch the full video, click here.
Matt Connolly, Founder & CEO of Sønr
Adam Rimmer, Co-Founder of FloodFlash
Jamie Yoder, President of Snapsheet
Adrien Cohen, Co-Founder & President of Tractable
Jonathan Swift, Content Director of Insurance Post
(Guest-starring Jonathan’s cat)
Jonathan Swift: So, first of all, all of you are in Insurtech 100 – I would just like to ask you what have been the most significant developments within your business over the last year? I’ll come to you first of all, Adam.
Adam Rimmer: Thanks, Jonathan. It’s been a super exciting year. We’ve only really been trading for just over a year. Lots of development with our parametric flood insurance products, where we move from initially a very simple single binary flood depth, then immediate payout trigger. Clients can now have a multi-trigger version of that policy, which means they can get an even tighter correlation and even better coverage.
Moving out with more and more distribution partners – brokers in the UK who we sell through have been brilliant. We now have Marsh, Lockton, Gallagher, Henderson’s, all now distributing the product in the UK businesses, which is brilliant. They have really seen a potential of this new type of insurance to work for them.
We’ve brought in one of the top three re-insurers as well to participate in the program, alongside every syndicate at Lloyd’s, where we are a cover holder and where the FloodFlash policies are underwritten.
The single-most important development in the last year has been with us when Storm Ciara hit in February, which I think you sort of might be expecting me to say here.
That was always the elephant in the room for FloodFlash. It was always – people would always say “Oh this is such a great idea. This makes so much sense. Why doesn’t this already exist?” And then they’d say, “Oh but, have you actually ever paid anybody?” And until February, this would have – the answer was “Unfortunately, no.” The Storm Ciara hit on the 9th of Feb, on a Sunday, and then on Monday we had paid all but one of the claims that came in, in full. And the only reason we hadn’t paid that one was because they hadn’t sent us their bank details yet. And it was awesome.
To me, that was a watershed moment for parametric insurance, when it stopped being this thing that people could talk about at conferences, how might parametric insurance help change the claims process in the future. And it became much more tangible. We had parametric insurance that could save businesses, save livelihoods, that were unable to be protected before. The testimonials we had from customers were just awesome. We had one customer swearing on the lives of his children that taking out this FloodFlash policy was the best thing he’d done in five years, which is probably about as ringing an endorsement as you can get. We were all super proud of that. the whole team was super proud of it. We were really pleased with that. I would say that that is our single biggest, most significant, development of the last twelve months.
Jonathan Swift: I’ll come to you next, Jamie.
Jamie Yoder: It’s been an interesting year, to say the least. Snapsheet obviously is known, and we’ve been around since 2011, as sort of a pioneer of virtual auto claims. Virtual, basically over the years, we’ve made significant strides in that, in terms of similar to what Adam said. And adding some big marquee names. We’re now doing work with 15 of the top 25 carriers in the US and close to a 100 overall in that core business. So, great strides of that, but really, obviously COVID was sort of a real catapult into virtual as, I will say, virtual claims by necessity. Not necessarily by design. Over the years, while large carriers have used it as a M.O.I., it was always sort of a partial one. This has really transformed into – you really have to operate virtual claims, again by necessity. And as claims frequency are down, they can handle that but how do you really give them the digital tools and essence to really do this at scale as volume returns?
This has been sort of a testament of virtual as a more strategic method of inspection for the claims process, and a big shift for Snapsheet as well. We’ve always provided the service, that actually use our technology to do it. This last year has really been all about our software as a service and licensing out both the appraisals to put the power of our technology into the hands of carriers as they now look to, basically, arm their people with the ability to automate and drive scale with virtual. And then beyond that, this past year, even before COVID, was really all about our claims solutions. So Snapsheet claims really is providing that digital engagement and automated workflow from FNOL all the way through settlement.
At the beginning of the year, we had announced the large carrier we were working on. And we subsequently had several launches with the Insurtechs. So, from big to small, the ability to really drive a true digital experience of claims, sort of a native Cloud claim solution, that leverages a lot of the optimisations we’ve done. Really those two fronts. Big year for our Software as a Service, for us, and obviously, virtual now at scale. It’s kind of like we were built for this moment, interestingly. Hey, almost.
Jonathan Swift: Finally, I come to you Adrien.
Adrien Cohen: It definitely resonates, the need and the acceleration for virtual in automation. I kind of understand the question more as what happened before COVID. I’m sure we’ll go back to COVID a bit later. I would say, this has also been a very phenomenal year for us at Tractable. Maybe, if I have to think about the most significant developments, I’d probably highlight three things.
I’ll highlight the growth, the product, and the financing, for us as a company. On the growth side, we’ve doubled the number of countries we operate in, in 2019. We’re now present across three continents, working with the leading players like Ageas in the UK, Talanx, Covéa, Tokio Marine, and so on and so forth. That’s obviously a big achievement and a big acceleration that has happened in 2019. Specifically, when it comes to APAC in Japan in particular, it’s really interesting because we started our operation in early 2019. We had our country manager in March, and today we already have a team of 15 people on the ground. All of that acceleration has happened in 2019. That’s on the growth side.
I think on the product side, what was really important for us in 2019 was the deployment and going live and in full production with our new solution, which essentially is about putting the AI in the pocket of the policy holder – to support the policy holder – whenever accidents hit, really. So, to really use the scale and speed of AI, to ensure that whenever accidents hit, you can have an instant decision, based on this instant analysis of the damage to your car. That is a new solution that we actually deployed at scale in 2019. For us obviously, a second very important development.
And third, it’s hard as a tech startup, financing is always important. As you know, we raised our Series C, a few months before – actually a few weeks – before COVID; not a few months. So here, timing was quite fortunate. But we raised our Series C, a $25 million round, which puts our total funding to $55 million. That was obviously a big milestone for us as well.
Matt Connolly: Good stuff guys. I have a question. You’ve all answered it to a degree, so I’m interested in how your businesses are seeking to change or shake up the traditional claims process. We’ve heard AI, we’ve heard SaaS, and virtual. We’ve heard parametric. I’d also be really interested if you went a little bit deeper, but also how the insurance sector has been accommodating your ideas. How well-received were they? Adrien, if you’re happy to continue.
Adrien Cohen: Happy to do so. I think Tractable is – our vision is really to use AI, to accelerate the entire claim process. That is really the guiding principle in everything we do in all of our product investments. We believe that AI can really simplify and accelerate the journey, and what we try to monitor is how we can convert the process from weeks into days, and in some cases, even minutes, where possible. That is because we see AI as a new technology that can bring real-time, that can bring scale, and that can bring consistency. If you leverage those three elements – the speed, the scale, and the consistency – you can actually make better decisions across the claims process.
Specifically, the way this is being used and the way we’re kind of shaking up, to use your words, the claim process, goes end-to-end from the very first moments of loss. From the moment the placeholder has an accident and calls his insurance company, to the moment the car is at the body shop, to the decisions that are made by the appraiser looking at the car, all the way to settlement. For every step on the way, you have a lot of friction today that comes from visual assessment. And this friction, you can remove by automating the task, by having an AI that has learned to make the decision, really.
Today, those solutions are deployed end-to-end with multiple carriers in many countries. In terms of how the sector has been accommodating to this idea of using AI to speed the process, and accelerate the process, it has really changed over time. We started a company in 2014 and at the beginning, we were really seen as a visionary, but also like this is interesting but that’s never going to happen anytime soon. In 2015, we started having our initial customers, so Ageas in the UK, Covéa in France – which are still key cornerstone customers for us – which is more about teams on the ground sharing their vision that this would really change the way claims are processed. Over the past few months, we’ve covered even more. There’s really been an acceleration for the demand of this technology, and I think it’s gone from – “this is a vision for the future”, to a “this is an absolute priority for us as a company” and that is why we’ve been experiencing this phenomenal attraction.
Matt Connolly: Super. Jamie, same question to you.
Jamie Yoder: I’ll build on it a little bit. We sort of take a different tact, a little bit, but in a very similar vein. Again, as I said before, Snapsheet was really – our whole point was you can streamline the whole claims process, and virtual obviously sort of flipped the method of inspection. If you went pre-COVID virtual, over 8 years of doing it, it’s really grown from nothing to about 10 percent of the overall method of inspection for claims. What we’ve seen is kind of this bar-bell adoption. And if you start shaking up the traditional process, big carriers would use it. There are a couple who’d leaned in a little more significantly. But, largely, it was a minor method of inspection they would use within the whole.
But we also had huge adoption from Insurtechs and it really self-insured innovators like RideShare, shared economy players, who had obviously huge amounts of vehicles. They would go a hundred percent and so we proved out how to actually do that in all cases. While Adrien talked about where you can use computer vision in large cases, it can only work on a small number of cases at that. Our view was how do you operationalize the end-process for a hundred percent of it so that it works for all and takes advantage as any advances on AI come in. The notion that the process in claims is always what we call bionic, a notion that it’ll be some mix of humans and machines.
We use our intelligent automation and workflow to actually say I can incorporate those anywhere, automate as much administrative tasks as possible, but apply it and get it to a human when it absolutely needs to with all the information. In terms of seeking a change, I’d say traditional insurers would lean into it at partial, but we’ve proved that could be done for a hundred percent of the cases with the others. Now with COVID, you’re seeing, as I said before, people have adopted virtual more by necessity and really a willingness to change the work. Now, we’re trying to provide the tools out there to just say that from the platform standpoint, how do you really do that at scale for a hundred percent of the cases, and overtime take advantage of the AI in spots where it becomes available.
Matt Connolly: Understood, thanks. And Adam?
Adam Rimmer: Great question. To start with, I would make the assumption that the majority of our audience today are already familiar with what parametric insurance is. But, for anyone uninitiated, it’s where payment is made based on some physical parameter that is measured, instead of the cost of damage. The most simple example is life insurance. If you die, the claim is made. Nobody tries to work out how much your death cost or anything like that. It’s just a simple parameter where payment is made.
How are we trying to change and shake up that traditional process? It really depends on whether you consider what we’re doing to be part of that traditional process at all, really. Some people certainly don’t. One of the questions we often get asked is, “Is this even insurance?” For us, that claim to process is very different. It’s not about working out the cost of damage. It’s about almost bypassing the entire process by saying instead of adjusting a claim, we’re going to say, this thing – which for our first flood product is obviously water depth – we’re going to say this thing correlates so well to your damage, we can measure it and pay you out based on that so quickly, that it is almost like an entire new product.
We do see – certainly for SME insurance, and ultimately consumer insurance as well – we do see it almost like as a whole new category of insurance, rather than shaking up the traditional insurance in many ways. Although, parametric insurance has obviously existed in the re-insurance world for many years beforehand. That was actually really reflected, and to also jump into your question about what is the reception that we got when we would speak to people about the product. That has really changed over the last – since we first set the company up a couple of years ago.
When we first started doing this, the reception would be different, depending on who we would speak to. Often, people from the world of re-insurance and insurance and securities, who parametric insurance was slightly more familiar to, because it’s much more common at that scale, would be more comfortable with it. But, often, we would speak to insurers and we’d often be met with blank faces – somebody said “I spent 30 years underwriting for this and this is isn’t how it works.”
We found this strange inverse correlation between how long somebody had worked in insurance and how quickly they got the product, often – people who’d we go and speak to some potential customers. They would actually be like, “yeah, this makes so much sense. Why doesn’t it already exist? It just seems so simple.” That’s kind of really interesting over the last 12 months, and particularly since the claims after Ciara and Venice in February. That attitude has started to change quite fast. I think there’s been a real noticeable shift in how people view parametric insurance and just how powerful it can be in each of the industries.
Matt Connolly: Thanks.
Jonathan Swift: A number of you have already mentioned about the time pre-COVID and post-COVID. Can I ask, you’ve talked about, I suppose in a way, how there’s now this demand for your offerings but – how have you adapted your businesses in light of COVID-19? Particularly, perhaps, how you’re actually working with prospects now. I’ll come to you first of all, Jamie.
Jamie Yoder: From an operational standpoint, obviously, the appraisal services – we’ve always been virtual, and people work from home. So that switch part was really easy for us in that context. But, in terms of working, it would be really simple. It’s really funny to me how long video conferencing has been available, yet no one ever turned on the video. Obviously now everyone does. Having working sessions with clients has been easy for someone who’s been on a plane everyday for the last 30 years. This has been, in some ways, an interesting relief to be able to work a little differently.
But in terms of our focus and how the business has adapted, a little of it is what are the parts of our – we have a fairly multifaceted business – what are the parts that are actually really relevant to what people are trying to do now with a little more expeditious efforts. While we’d always push the appraisal service that we can do it for them, obviously frequency is way down and those who have staff, as they’ve adopted it, we have accelerated our efforts to say, “How do we put that technology into your hands and really let you do it?” We’ve really accelerated our efforts to engage clients on that, whereas in the past, people were more receptive or more likely to really outsource the service of appraisals to us for the part that they would do virtual. Now they’re saying, “How do we actually mobilise the broader workforce?” It’s clearly changed the emphasis and the timing.
We’ve also seen a shift from those who – previously, we had talked to the Indie and claims. They’re more looking at “How do I just optimize a certain part that was an acute pain point driven by COVID?” For instance, payments. So digital payments. So many carriers still write cheques and the simplest thing, well the person who writes the cheque couldn’t get into the office to write the cheques. It’s not that they haven’t fixed that now, but it really exposed a real acute problem that, in times like this, people are looking for an easy win – something they can do as a small amount of effort that has big payback, both for their customers but also really streamlines their operations in a particular area, or just tackling the full breadth in one go.
Jonathan Swift: Okay, Adam?
Adam Rimmer: In many ways, it’s very similar to what Jamie was just saying. For us, as a young business, actually moving our day-to-day operations to a fully remote world has actually been really simple. Everybody, everything we do is Cloud-based. That’s been no worry at all. I guess the one extra bit for us is that we do have our physical sensor, our proprietary sensor, which we measure flood depth with. I’d love to show you one on the camera here but there actually all in our office. I don’t have any at home. Those have to be installed on the client’s building. But that has been able to continue because the installation actually always happens on the outside of the building. What we capture here is catastrophic external flood, like river flood, flash flooding, storm surge, rather than escape of water. So, sensor goes on the outside of the building. That can happen with our installation engineers being fully socially distanced from the client, etc. Once we worked out that process in the first few days of being in this situation, it’s actually been really smooth, which has been great. Our broker success team who manage all our relationships with our distribution partners – obviously, insurance brokers, as a breed, love that in-person relationship. Our broker success team, previously that is what they have done. That’s obviously now been moved to largely doing onboarding sessions, coaching sessions, for brokers about how to talk about, how to sell FloodFlash, how to answer their clients’ questions about it. That all now happens over Zoom. They, like the rest of the world, have now moved to that operation pretty swiftly. We’re feeling pretty comfortable.
Jonathan Swift: Finally, over to you, Adrien.
Adrien Cohen: As any company, when COVID hit, we went with the right contingency planning and assessing the business situation and the type of action we should take. Tractable, as a company, we were lucky to be super resilient. I think it comes down to having the right geographical footprint. It is difficult to manage so many geographies, but it was a good thing to have a big part of your business in Asia, in Japan, which was not as hurt by COVID as Europe or North America. We had those pillars, and I think there’s a question about the pricing model.
For us, it’s very subscription based, so I suspect that companies that are more transactional-based, given the decrease in volume of claims, will have been hurt more severely. Eventually, obviously, the cash situation and the fact that we raised money just before is just good timing, but that’s also a key component. All those elements, the geographical footprint, the pricing model and the cash situation, makes us really resilient. That said, there’s been a number of operations and functions that we’ve had to evolve and adapt.
We’re very resilient and I wanted to give you two examples of functions that we’ve had to adapt or evolve in the context of COVID. The two examples I wanted to mention are the field sales and the lead generation is also something you mention, Jonathan. On the sales side, as a company you’ve seen usually or have a model that’s very heavy on field sales. Guys on the ground having lunch, creating a relationship, etc. etc. Now, obviously it’s not something that can continue in the context of COVID.
Here I think what we saw is that we’re lucky to have, in a way, to have a long sales cycle. So that means usually they have a very large pipeline already active. For many months, your sales people are able to continue to work on their pipeline. Obviously, at some point, the issue is about generating new leads. So, I think in the next 6 months, as a business we don’t seen an issue, but the question becomes in Q4 or Q1 next year, what will the pipeline look like? Here, I think it’s boiled down to really changing the way we generate leads. Historically, we would rely really heavily on trade shows and conferences, which again is not something that happens anymore.
We really shifted our model from offline to online. We, this month, gave two very big webinars – one in the US, one in Europe, alongside some of the key chief officers at AllState and Allianz and Generali. Those events are really a very strong source of leads. People actually have so much more free time now at home, so the attendance was through the roof. Actually, for the first time I think it was maxed out, which doesn’t always happen for technology in claims. Those are two examples on the field sales and on the lead generation of actions and initiatives that we’ve had to take to adapt to the new environment.
Matt Connolly: Great stuff. My last question for today. First of all, a huge congratulations to you all and to your companies and to your teams in making the Insurtech 100. Not an easy feat and wonderful to have you as part of it. A question, Adrien, as we have you on video, is what’s next? It’s a question to you all. What’s next in the next 12-months or over the short-term? Where’s your focus and what will we see?
Adrien Cohen: Probably, I’ll highlight three things – the team, the growth and the product. On the team side, we’re constantly looking to hire the best talent. In particular, machine learning and deep learning. Part of the fundraising is really to go through maintaining or lean on the intellectual property side. That’s going to be a big target and objective for us. Secondly, on the growth side, in the next 12 months, we want to continue to maximise our business in our core market, so that’s North America, West Europe, and Japan, and to continue to expand this footprint.
In the next few weeks, we’ll be announcing that we’re entering some of the largest markets where we were not present yet, notably Spain, Nordics, and some of the largest remaining key markets in Western Europe are now markets where we have a presence. There will be a key focus for us to really grow and make the business resilient in those countries in the next 12 months. Finally, on the product side, we are constantly investing in a product with this big vision of using AI to split up the recovery end-to-end. As you can imagine, the product roadmap is quite busy.
Matt Connolly: I’m sure. Good man, thank you. Adam, what about FloodFlash?
Adam Rimmer: Thanks Matt. You wouldn’t be the first person to get out the wrong way around, by the way.
Matt Connolly: I know, I did stutter on that one.
Adam Rimmer: Don’t worry. For reasons that will become clear by the end of my answer, I think we will be changing the name of the company before too long. Although, we’ll keep the product name. So, the post-COVID world is that the next 12 months are really exciting, not just for us I think, but for parametric insurance in general. The reason for that is that, up until now, the thing that has often dogged parametric insurance is this idea of basic risk – the idea that what you get paid out from your parametric policy may not be equal to what your actual losses were.
Absolutely no business owner in the world is now going around being like “I wish I had perfect pound-for-pound or dollar-for-dollar indemnification for my COVID losses.” They’re all saying, “If I had had two hundred grand,” – or whatever the appropriate amount for them is – “in the bank on the day this started, that’s what would have saved my business.” That’s the thing that has now changed. Catastrophe insurance is a different dynamic to other types of insurance. When genuine catastrophe strikes, what you need is not a six-month loss adjustment process for a complex catastrophe claim. It is cash, fast. That is what saves businesses. There’s no point getting the perfect pound-for-pound indemnification if that goes to the liquidator in six months’ time. Fast cash, and protecting the cash flow, that is what saves businesses. Now, every business in the world, really, knows that.
It’s parametric insurance’s time to shine and that is now such a powerful message, one that everyone understands. On that theme, we are after the success that we now had with the small business product, that is FloodFlash so far. We’re in the soft launch phase at the moment of a product called FloodFlash Plus, which is essentially a similar product, same principle, using our own sensors and trigger points based on certain payouts, based on certain depths of flood water. But it’s a more bespoke process and more appropriate for clients who might be paying between twenty grand and a million pounds for flood cover. That would be a huge industrial site, or it might be a nationwide portfolio. That is one of our exciting developments, which is actually live in a soft launch phase now.
The second bit is that almost every country in the world has not just a flood insurance problem but a natural catastrophe insurance problem. This stuff takes a while in insurance, but ultimately, our ambition is to be operating in a list of countries as long as Adrien’s. That is really where we want to be, so starting towards those steps before to our next market. Currently, it’s just in the UK that FloodFlash is available.
We’re also working on a new non-flood product, which is something that we’re really excited about and we think helps to solve a lot of the problems that we have really seen in the industry in particular over the last few months. That’s another little project that we are super excited about.
Matt Connolly: And what space is this in?
Adam Rimmer: That is in business interruption cover. The idea is that, obviously with parametric insurance, is that it’s not really line-specific like that. Once you get the payout, like for our flood product for example, customers use it for property, they use it for contents, and they use it for business interruption cover. Once that payment is made, it is theirs to do as they wish with. This is more specifically focused on wider causes of business interruption. So many businesses have discovered, to their shock and disappointment over the last few months, that the cover they thought they had isn’t actually serving its purpose.
Matt Connolly: Very good, thanks. Jamie, what does the next 12-month hold for Snapsheet?
Jamie Yoder: The next 12 months, for us, is continuing on the theme of what we said. It’s really all about Software as a Service, so pushing and advancing more of our efforts really focused on the claims automation process. Really they’re full in. We’ve been moving from auto, adding home, but also continuing to extend into other lines that end-to-end, from FNOL to settlement, and really focused on streamlining and automating all those hand-offs. All the things around engagement and the communication, and all the services and parties involved. It’s not just decisions where you can automate a particular decision, but how do you handle rental assignments and property inspectors and everything else. All those parties involved, bringing in those services, so that you can really automate all the administrative tasks and focus people’s efforts on the stuff where empathy and judgment is needed. And then strip away all the other tasks within that claims process. There’ll be our Snapsheet Claims or Snapsheet Appraisals. So, continuing that push on virtual and putting tools in the hands of the carriers as they make shifts in their auto model, but then also into putting that software in the hands of other lines as well.
Jonathan Swift: Okay well, I think all that’s left to say is congratulations again to FloodFlash, Snapsheet and Tractable for making the Insurtech 100. Obviously a thanks to Matt for putting it together with Sønr. Thanks to the people who came onto the call today. Adam, Jamie and Adrien, thanks very much for your time.
As I said at the start, this is part of an ongoing series at Insurance Covid-Cast. There are a few of these Insurtech 100 specials coming out so please keep your eyes peeled for them. As always, if you want to read more about Insurtech 100, then please go to Insurance Post online. If you’d like to subscribe to Post or register for Insurance Age, then please use the tab in the banner at the top here. Until the next Insurance Covid-Cast, stay safe and goodbye everybody. Cheerio.