ibott: Insuring the shared economy and beyond
In January 2019, Apollo Syndicate Management, the independent specialist insurer and reinsurer, announced the appointment of Chris Moore as Head of ibott (Insuring businesses of tomorrow for today) and Deputy Active Underwriter of ibott’s special purpose arrangement (SPA) 1971 at Lloyd’s.
Fast-forward to 2022, and Moore, who is known for his proactive leadership style and passion for innovation, is relishing the role that is leading ibott and its offerings from strength to strength.
Moore, a mathematics graduate of Bath University who always wanted to work in the insurance industry, is not one to shy away from a challenge. He admits he took a somewhat unorthodox dive into his first role in the space.
He explains, “I had visions of being an actuary and quickly realised that probably wasn't for me, so tried to transit into underwriting. However, I'd missed the graduate scheme intakes and so tried to find a different route into the industry which proved fairly challenging. Then my friend told me how he'd accepted a job at Deloitte to be a consultant and he was going to cancel an interview with an insurance broker the next day.”
Moore saw his chance and took the slot for himself. "I told him not to cancel it, and then turned up and stole his interview with my CV. I think they appreciated the audacity and gave me the job there and then."
The calculated risk paid off, and Moore began work as a broker, transitioned into underwriting at Catlin, and then two years into his career, grasped the opportunity to join Apollo - a new Lloyd’s syndicate - to help establish a new Casualty practice.
Adopting a new approach for new risks
The move proved to be another advantageous one for Moore, who thrived in the innovative environment of Apollo. “It was almost like a startup in itself, which is quite rare in the Lloyd’s environment,” he says, outlining the company’s background.
"It's called Apollo because the original investor was Neil Armstrong, the first man on the moon; the Syndicate number 1969 was chosen both to mark that event and to be symbolic of the challenge to the status quo that Apollo sought to pose”.
Moore says Apollo's attitude to innovation, and the way the company embraces the client-first culture, resonated deeply with him. The company was one of the innovators behind building a first of its kind global solution for Airbnb in 2014.
The biggest challenge with the product for Airbnb was the element of trust, explains Moore. "To create trust in their marketplace, Apollo needed to ensure the nights stayed, which were located in various people’s homes, were insured well enough to generate trust in the product."
Central to the challenge lay the concept of ownership, says Moore, which the insurance industry, in general, is rooted in. It was the disruptive ability of Apollo in acknowledging the changing marketplace and the potential of the Sharing Economy that led to its product innovations.
Moore says, "The insurance industry is fascinated by ownership. You own a car, you insure your car. You own your house, you insure your house. New millennials, however don't care about ownership. For them the future is utilisation, rendering it challenging from an insurance perspective."
By listening to the requirements of the marketplace and recognizing changing needs, Apollo embraced partnership with Airbnb and created a tailored, fit for purpose, scalable product – and word spread. “When you create something for someone like Airbnb, your phone starts ringing; "Hey, we're a rideshare company. Can you create something for us in the rideshare space?" or, "Can you create something in this car sharing space, on demand delivery, drones, e-scooters, autonomous vehicles?" because that's the direction society is moving towards."
New market opportunities
It was, Moore recalls, Apollo's client-first culture that led to the birth of ibott. “We moved away from a buyer-supplier model and embraced one of long-term strategic partnerships. We quickly gained a reputation for listening to clients, collaborating and co-creating new products, and innovating as much as we could."
Taking advantage of new opportunities as they come along has been something of a habit for Apollo. “It just became very apparent to us that the entire digitalisation-driven space occupied by new tech, new startup companies and new platforms was seeking insurance products that the insurance industry had previously failed to produce," Moore explains.
He says that Apollo was fortunate in that it was exposed to the huge wave of insurtech early and was well positioned to embrace the opportunity and benefits of digitalisation from the start. “We were fortunate in the fact that we didn't have legacy systems that would prevent us from adopting the digitalised partnership model. We partnered with some talented clients, broker partners, and tech vendors that allowed us to explore new things without huge upfront cost on our balance sheet."
Fast-track to success and ibott’s launch
Recognising that insurance companies were trying to sell mismatched products that just weren't fit for purpose was the revelation that led to ibott being launched. Moore put together a team that is purely dedicated to those unique challenges within new tech platforms and creating tailored insurance products for them.
Demand has been high, and since its launch in 2019, ibott has been increasingly busy. “It's been very successful,” Moore says. “We’ve written an awful lot of premium and forged some fantastic long-term partnerships and are on track to hopefully write $250mn this year.”
2022 will also be ibott’s first year as a standalone syndicate. What that means is that at Lloyds, the company will have its own capital base purely dedicated to this industry. This is important for ibott as the market is changing rapidly and Moore feels the need for dynamism, flexibility and agility has never been so important in order to be a successful partner for their clients.
It's been a journey, acknowledges Moore, who says the past three years being dedicated to this space have enabled him and his team to meet with a wide range of companies that are passionate about changing the world. "You feel like you are a small part of that journey because you have enabled them to achieve their goals by making insurance an enabler and not a blocker. It’s fun.”
Today, ibott focuses on partnerships across the entire digital economy. “The team goes beyond just underwriting our clients and truly partners with them using APIs. This provides a deep level of understanding of our customers’ evolving needs. We can also use this data to establish new risk insights that we can feed back to our clients in order to help them make better risk based business decisions. Our goal is ultimately to help our clients run safer and more sustainable operations.”
Managing the Sharing Economy
With greater numbers of users than ever before, from mobility solutions to the housing and travel market, the Sharing Economy has developed massively over the past few years. The emphasis on ownership has truly shifted to utilisation, which is where ibott is making its mark.
“When you start transitioning to a utilisation model you seen an immediate advancement in risk mitigation; we have seen marketplace platforms buying insurance on behalf of a lot of their users, whether it's their drivers, whether it's the hosts that put homes on their platform, whether it's the people that ride one of their e-scooters or e-bikes,” Moore says.
“They're trying to build an insurance product that takes away the block of, "Well, I can only use this service through insurance." And insurance historically has been a pretty awful customer experience which companies don't want to put their users through.”
Ultimately, solving problems and creating seamless solutions is key as it encourages people to interact with the platform – and encourages others to do the same. This ease of use creates brand loyalty, he explains.
"If I were to put my home on an accommodation sharing platform, and I knew I had insurance in place that would protect me from anything that could happen, it would probably be a block in terms of me renting my home outside of that platform. That's an example of how insurance can tie in that customer loyalty. So when you start thinking about that, the whole product itself has to change. Insurance in this space is not just about balance sheet protection. Strategically positioned insurance can be a USP for a marketplace platform."
Creating a disruptive service
Interaction with customers is critical to the process. The plan must fit each user perfectly. “Am I speaking to the individual giggers or the individual drivers? Or am I speaking just to the platform?” Moore says. “You've got a whole compliance and regulation piece that fits around that type of policy. The real opportunity within this space is that you've now got a real closed pool of addressable premium.”
He explains, “If I wanted to insure a fleet of drivers and I was trying to sell to those individually it's a huge marketing spend, a huge amount of administration and a difficult risk selection process. A partnership with a platform, on the other hand, permits 100% driver acquisition through a bundled commercial purchase, and unlocks the potential for my team and I to start doing a lot of things with the data that can drive safer and thus improved performance.”
Managing Big Data for insights
With a large number of new data sources and the growth of the IoT, processing Big Data has been a challenge for the insurance industry in general. However, this rich information source has also been a huge advantage to insurtechs that have adopted the latest technologies and can manage the data to their advantage.
The digital ecosystem, Moore says, is providing insurtechs with the opportunity to create new products because they have better access to data and they are adept at maximising that opportunity. “A lot of insurance companies have maybe struggled embracing new risks like that of the Sharing Economy as they have a deep rooted reliance on 10-15 years of developed loss data in order to price risk.”
“However, we need to move faster than that. It's got to be more dynamic. The 10 years of data might only have three or four data points. What we can get through this digital ecosystem is hundreds of data points, from maybe the past two to three years. It's not as long-standing – but it is much richer information – and the world is moving so fast that it's almost certainly incredibly deep and it gives us so many different risk insights.”
Scaling at pace
Another challenge is the ability to focus and grow. Because of how the insurtech industry is developing, startups often make the mistake of trying to do too many things when they should always seek to specialise and become leaders in their fields. The Sharing Economy, like insurtech, is also undergoing a period of intense development.
"It's expanding all the time," Moore says. "And it's not expanding linearly. Airbnb is a great example. It transitioned quickly from just providing homes to now providing experiences and looking at the whole spectrum of travel. Policies have to be able to cater to that level of change. Insurers have struggled with that amount of flexibility and that speed that you need to transition to create a partnership that's fit for purpose for these companies.”
He continues, "I think it's really easy to see the opportunity and think disruption. But my advice to startups in the space would be 'focus on your goal'. There is a huge opportunity across every part of the value chain, but focus on a certain deliverable and be good at it and deliver it and then you can transition. And I think this is also a very people-oriented business. It’s about building relationships and partnerships.”
ESG, transparency, and mobility
But it’s not just about expansion, it’s also about changes in direction. Consumers are becomingly increasingly focused on the Environmental, Social and Governance factors and so our clients are looking for ways to embrace changes and require their insurance partners to support them in these endeavors. Moore says working with mobility firms is inspiring because they are delivering on their carbon-neutral promises.
"I'm very passionate about micro-mobility. I do think it is going to play an important role in the future of transportation. What we're trying to be is transparent. E-scooters are an example where insurance poses a unique challenge. It's a new area of mobility and there isn't much data on it. There's certainly fear from certain regulators about embracing that aspect. But insurance has an important role to play, not just through providing protection to these shared scooter operators, but also educating regulators about what an insurance product needs to look like, and what the real risks are. We are very data-driven in our underwriting decisions with ibott.”
Innovation and success
Ultimately, Moore believes in innovation – but it must be carried out strategically. He also believes the pandemic has fundamentally changed the digital economy and the opportunity for insurtechs, and that embedded insurance will be the single biggest trending factor transforming the industry over the next few years.
In terms of what inspires him today, he speaks of the richness of opportunity within the digital economy and insurtech industry as well as the latest emerging trends. “Embedded insurance is huge. There's still so much to be done on customer experience. There's so much to be done on data. There are so many opportunities in terms of the ecosystem and technology.”
He adds, “That richness of opportunity has attracted a new wave of talent that insurance hasn't seen before. We are seeing people with a non-insurance background coming into insurance – and it’s fantastic working with people that have a fresh, diverse way of doing things and a new perspective.”