Shepherd: Impact 25 2019 profile
March 5, 2019
This is a summary of the profile which first appeared in the Oxbow Partners InsurTech Impact 25 2019.
Shepherd is an analytics platform which ingests property data from its own IoT sensor network, non-proprietary sensors and building management systems.
Shepherd monitors buildings, estates, facilities and the environment to provide information to prevent major health, safety, compliance or building services incidents. This approach removes the need for routine inspections and focuses manual intervention where it is required.
Using Shepherd’s platform, insurers gain a deeper understanding of risk, allowing them to tailor policies to client needs. They can offer new products and services, combining the risk management services facilitated by Shepherd with both a traditional or parametric insurance product (similar to the one offered by Impact 25 Member FloodFlash).
One insurer has trialled Shepherd’s technologies in its own office buildings and discovered that disruption and downtime were reduced during cold weather. The insurer began to recommend Shepherd’s services to their commercial clients. Shepherd is now assisting the clients’ internal and external maintenance teams to better protect assets while passing risk-relevant data back to the underwriters.
The company emerged from Founders Factory, the accelerator set up by LastMinute.com founder Brent Hoberman, in which Aviva has a substantial investment.
“Shepherd’s unique product with sensors feeding machine learning for predictive maintenance is an exciting step forward in this space.”
Chris Andrews, Head of Risk Management Solutions, Aviva
Company in action
Shepherd provides condition-based monitoring and predictive maintenance that protects people and facilities from harm.
Client situation: Insurers exclude Legionella risk because it is impossible for them to provide cover solely based on periodic human checks of the property’s water system, where the disease could develop if certain conditions are not met.
What they did: By integrating Shepherd’s technology, which monitors water systems continuously, a global insurer was able to provide preferential terms for Legionella cover. Insurance is offered in conjunction with a compliance partner as a managed service. Shepherd’s Risk Scorecard allows underwriters to be informed through monthly reports and real-time dashboards on how the insured’s risk profile is developing.
Impact: This is the only specific and comprehensive cover available to the 100,000+ UK business that are legally obliged to control this health compliance issue. The insurer was able to grow premiums and profit in a new category.
The Oxbow Partners View
IoT is an area of InsurTech that has been ‘hot’ for some time but arguably slow to find the product market fit. The use case is obvious – better risk insight leading to loss prevention and lower premiums for customer.
However, the practicalities are hard. Insurers need to feel comfortable giving their data to insurers and need to replace traditional maintenance contracts, which are likely to be long-term agreements. Insurers need to want to reduce premiums for good risks, also not a given in a market where GWP is still the key metric for many. Finally, the arrangements need to be found to cover the cost of installing new sensing arrangements.