Adapt Ready analyses the impact of external events on business interruption insurance by applying machine learning and big data analytics.
Shruthi Rao, co-founder, explains that traditional risk modelling often analyses a specific location and thus misses the “ripple effect” that large events can have on businesses, and which impact insurers adversely. Adapt Ready’s technology accesses publicly available and proprietary data, and applies its machine learning algorithms to model the business interruption risk (pre-event) or impact (post-event) of interconnected global operations.
Adapt Ready has four use cases for (re)insurers and brokers:
Risk selection / pricing: Assess the vulnerability of a proposer’s operations to geopolitical events and price accordingly. For example, are vital materials supplied from a single source prone to labour strikes or weather events? Data can be gathered externally by Adapt Ready instead of from the client.
Reserving:According to Allianz, FNOL can take up to 100 days for a business interruption claim. Adapt Ready’s platform can reduce this to less than 24 hours. For example, Adapt Ready provided early warning (including loss scenarios) to an insurer about Hurricane Harvey’s impact on an industrial client in Texas this summer. The company also published a brief report before Hurricane Irma made landfall in Florida.
Value added service: For brokers or insurers, Adapt Ready complements risk management propositions which help corporates prevent or reduce the impact from business interruption.
Adapt Ready won Risk Modelling Technology of the Year over several industry incumbents at Insurance Times’ Tech & Innovation Awards last week. The company is looking to close their seed funding and is interested in hearing from insurers who want to test datasets.
The Oxbow Partners view
This week’s view is guest-edited by Adam Alvarez, publisher of Insurance Linked (a specialist ILS website) and an independent consultant. Adam was formerly at RMS, the risk modelling business.
Adapt Ready has followed the same path as Cytora, which started as a geopolitical risk modelling software for corporates and also switched to insurance.
The team at Adapt Ready are focusing on some of the big risks that will inevitably confront the global economy in the coming years. Issues such as climate change and cyber security will require ever greater efforts to mitigate and transfer risk. The demand for products to help manage these risks is huge and growing so Adapt Ready has market forces on its side.
The recent experience at Startupbootcamp seems to have encouraged Adapt Ready to pivot from enterprise risk management to working with insurers and brokers to help quantify business interruption risk. There is plenty scope to improve in the analysis of business interruption risk and Adapt Ready may find the answer though this will require convincing the market that they have a better understanding of the risk than underwriters with decades of experience. Other hurdles are likely to include the slow procurement cycle at insurers and competition from incumbent modelling firms.
Chris leads engagements across strategy and transformation, focusing most of his time on global reinsurance and UK & Ireland retail insurance.
Chris started his career at Munich Re where he was a D&O underwriter. During this time, he gained his ACII qualification. He then moved into consulting, where he has spent 20 years advising (re)insurance management teams around the world on topics including strategy development, operating model redesign, governance optimisation, underwriting transformation and innovation. Chris lives in London and spends a lot of his time with clients in Bermuda and Continental Europe.
Chris frequently authors Oxbow Partners papers and articles. He was the lead author on our InsurTech Impact 25 series. He is a dual British and Austrian citizen and speaks fluent German.