TechExec: Andrew Yeoman, Chief Executive and Co-founder at Concirrus
August 3, 2021 James Tribe
In our latest conversation with an insurance technology executive James Tribe, Content Manager for Magellan™, caught up with Andrew Yeoman, Chief Executive and Co-founder at Concirrus. They discuss how solutions like Concirrus will change the market in the coming years, allowing commercial insurers to become truly digital.
James: What is Concirrus?
Andrew: Concirrus is a cloud-based, turnkey behavioural analytics platform for specialty insurance. It contains an Underwriting workbench and can also do data ingestion, pricing, aggregate modelling, exposure management, and more. In other words, it’s a turnkey decision engine and platform that is built around granular analysis of ‘behaviour’ – since behaviour of any asset is what drives insurance risk.
Our first foray has been in marine insurance, but the underlying ‘behaviour’/risk analysis software is equally applicable to all specialty insurance lines.
James: How did you decide a solution like this was needed?
Andrew: Concirrus was set up in response to three major technological changes that are underway and will transform how risk is managed: IoT, AI, and cloud computing. Over the last ten years, virtually every insured asset has been slathered in IoT sensors, from buildings and cargo to our own bodies through Fitbit’s and Apple watches. The big data from these devices will swamp traditional actuarial methods so that every actuary in the future will need to be a data scientist. They will need to use the second change – AI and machine learning – to power their analysis. The third change, cloud computing, has created the massive computing power needed to run complex algorithms over these complex datasets.
Despite all this potential, commercial analysis is still underdeveloped. I saw this vividly in a previous role working on fleet management technology when our company partnered with an insurer. We gave them extensive data across our fleets, but they could offer no more than a top-level discount – a very unsophisticated, incomplete way of utilising all this data. This was because the technology needed to perform deeper analysis simply wasn’t in place. This helped us see that a platform like Concirrus could make this possible for insurers.
From the beginning, we built Concirrus to be 100% cloud-native, 100% line-of-business agnostic, and 100% open to advances in cloud technology. We started by applying our solution to marine products with our Quest Marine solution simply because it was easiest to prove value here: over a 2 year period, we’ve gained 20 customers on Quest Marine products, with 2-3 more joining each quarter.
James: So how does Concirrus help my business day to day?
Andrew: As you would expect, Concirrus puts highly granular risk factors at an underwriter’s disposal to help them with the daily work of pricing risk. The underwriter in our Quest Marine product, for example, can use machine-learning analytics that takes 1500 risk factors into account – the historic norm for marine was closer to 5.
When an email submission comes in, it is ingested by Quest Marine, which reads the extracts and spreadsheets. Quest Marine then prices the risk and triages it to underwriters with recommendations to help improve loss ratio. This triage and automation means that processes that once took hours to days can be done in real-time.
Take the recent example of the Ever Given container ship that blocked the Suez Canal. Many underwriters will have faced the questions: “how exposed are we as a result of this?” and “what should we do in response?”. With Concirrus, you can see your full exposure in 30 seconds. You can set up automatic notifications about real-time changes, and you have all the data you need to act accordingly. You can also capitalise on opportunities by quickly modelling and pricing for the new situation – for example, offering cargo delay insurance in the wake of the Suez blockage.
James: Why is this better than other solutions in the market?
Andrew: Firstly, we’re a turnkey solution. Many insurers are looking at the possibility of constructing ‘best-of-breed’ modular ecosystems from many vendors – one for data ingestion, one for analytics, one for pricing etc. But what they really want are the outcomes of these integrations, not to actually handle the integration themselves. Concirrus is ‘easy to buy’ in the sense that everything is in place to help you build insurance products. And since the underlying platform is sector agnostic, it is not limited to marine – many of our clients are already starting to use us for ‘cross-line’ business too.
James: How do you see solutions like Concirrus changing the market in coming years?
Andrew: Concirrus, and solutions like it, enable a number of what I’d call ‘but-for’ products that couldn’t exist but for prerequisite technology – Amazon couldn’t exist but for the internet, for example. In insurance, we see that many risks are still underinsured or not insured – 90% of all world products are not insured according to the CEO of AXA XL. With the rise of AI, IoT, and Cloud Computing we may see insurance products become viable that have previously never been assessed at all. At the same time, companies with a high level of automation have such an operational advantage that efficient automation will become table stakes for insurers.
I will say however that I don’t foresee drastic ‘disruption’ of the market players in insurance. I see it more as a new way of working. We may see some lines of business spin out of Lloyd’s as well as new classes of business enter it. And while everyone knows Lloyd’s needs to be more efficient, there’s no reason to doubt that it’ll persist in the long term, along with all the major players. Again, at the heart of all this change is that we’re now living in a data-and-analytics fuelled environment. Analytical platforms like Concirrus allow commercial insurers to become truly digital, and there’s no reason to believe they won’t achieve that.
The Oxbow Partners View
For now, both the ‘best-of-breed’ and the ‘turnkey’ approaches to tech transformation have their adherents.
Andrew makes a compelling point – insurers want the benefits of multiple solutions, but not to manage all the integration that goes along with this. We have often heard from clients that have mitigated a full ‘best-of-breed’ strategy because it turned out to be a lot more complex than expected to link up all the moving parts.
When we last spoke to Concirrus, for our 2019 Impact 25 report, they already boasted key partnerships with major players in the marine line of business. Since then there has been a surge of specialty data and analytics solutions that have each cornered sizeable market shares in their own specialty niches – Cybercube in cyber portfolios; DQPro in data assurance; and of course Concirrus in marine. As Andrew notes for Quest, the natural next step for such providers is to expand implementations into new specialty lines.
Pulling this off has traditionally been a challenge for both insurer and provider. Many insurers, especially in specialty lines, still insist that their products’ esoteric tech requirements cannot be met by cross-industry or even cross line-of-business platforms – even as other industries adopt this very approach. These buyers must now decide between the old, ‘safe’ route, and the potentially riskier option of selecting line-agnostic solutions that can give them access to best-of-breed analytics. For niche lines of business especially, insurers may find themselves waiting a long time for the solution that’s ‘just right’.
Of course, Concirrus’ release of Quest Automotive is a promising sign. Even more encouraging is the uptake across new lines of business within their existing client base. With what Andrew calls a ‘ready to buy’ model, coupled with capability across all specialty markets, Concirrus will be one to watch as insurers adapt to the changing paradigms in tech transformation.
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