4 Lessons from The Lloyd’s Lab Cohort 8

So, it’s all over, 10 intense weeks of taking part in cohort 8 of the Lloyd’s Lab. If you think 10 weeks is a long time, when you spend it in an innovation lab it passes in the blink of an eye. When I look back on the time we were able to spend learning about the way the market works, and have expert mentors from the market help shape our thinking to hone our products, I am able to reflect on the lessons we learned and the progress we made. By way of a short summary.

1. Define your goals

The Lab team does a really good job of assessing goals during the application and pitch process. This goes to the core understanding of your product and the need it could potentially fill in the Lloyd’s Market. In our context, we wanted to take our ability to orchestrate and synthesise the big fire hose of US data that we have mapped and turned into Underwriting Insights and explore them in Lloyd’s market context. So, we came to the Lab with three goals:

1. Carriers told us that they used NAICS codes to segment their US exposures. We have found that these are often out of date. We wanted to show that our AI-powered business classification can help the Lloyd’s Market get accurate, objective, and up to date NAICS code to help them understand their exposures.

2. Underwriting information in the Lloyd’s Market often passes through multiple hands before reaching the underwriter. We want to prove that the deeper risk insights we can provide help underwriters assess risk more efficiently

3. Map what is required to expand this capability outside of the US – and where better to do that than the largest global insurance market?

Have we achieved those? Well yes, I believe we have and a lot more!

2. Persistence is everything

There is a line in the film The Martian “at some point every single thing is going to go south on you and you’ll think: this is it”. Whilst being in the Lab is nowhere near as dramatic as being abandoned on a planet, I did have a little moment. Our first proof of concept did not work. It was the most difficult segment of the market to find data on, and even identifying and using new data sources, did not help to get to a commercially viable outcome. We were able to take the positive lessons out of the failure - we found out we are actually really good at finding companies, you just can’t find them if there is no data to find! By being persistent, embracing our creativity, and with our mentors’ help, we were able to find our way to successfully demonstrate how our approach can help underwriters in the market.

3. Keep focussing on the prize

Signing a contract during the Lab is rare. The prize we focussed on, guided by our mentors, was to be able to have a good presentation on demo day showing how we have successfully achieved our goals and how these benefit the market. We were successfully able to show working with our mentors and partners in the Lab that:

1. Using our vast array of data sources and artificial intelligence we were able to assign objective and up to date NAICS codes (primary, secondary and tertiary). With the help of a fellow Cohort 8 participant, InsurX, it was possible to accurately classify current business activities for a portfolio of professional and financial lines businesses. We found significant amounts of variation between primary and secondary activity. Knowing the whole extent of the business activity is vital to understanding the risks.

2. Working with Canopius we were able to show that we can work with underwriters to gain a deep understanding of their underwriting appetite. We demonstrated how an underwriter can target a sector with a high potential for high value claims (in our demo it was sawmills). FRISS can profile those risks in 5-7 seconds to highlight the processes and hazards on a per location basis and bring the insight that helps the underwriter make a better decision.

3. We have mapped what we need to start our expansion beyond the US and hope to have an MVP ready in early 2023.

So, we were able to meet our goals, by staying focussed on the prize. What else did we achieve?

4. Keep your peripheral vision open

You never know the opportunities you might come across whilst working with your mentors. Whilst we were keeping our eyes on the prize, we were also conscious of the unexpected opportunities that we were presented with that too much focus could have let slip by. It’s exciting to have things to work on next. FRISS was able to identify new data sources that will help you to explore:

• new ways to help underwriters understand the likelihood of flash floods to aid risk selection and pricing for this peril

• working with a new data supplier we are now able to provide insurers with the construction and type of building! We are also looking at ways to build dynamic rebuild valuations, which will be valuable for raw materials prices as volatile as they are.

Finally, we came up with a new product to help underwriters gain a deeper insight into the markets where they are writing risk. Insurers are now able to go beyond the held portfolio and look at a whole segment or industry and benchmark the held portfolio in the context of the whole sector. Is the held portfolio balanced? Where do the opportunities for profitable growth lie? Now we just need to find a name for our new product…watch this space! So, we’re really excited about the time we spent in the Lab, we think we achieved a lot and have a lot more to work on. In retrospect, it’s not all over, in fact, we are only just beginning. Do you want to learn more on how to prevent fraud at Commercial Underwriting or throughout the full policy lifecycle with data-driven real time decisions?