Ben describes himself as a tech nerd (although he is anything but a nerd). Make no mistake, Ben is a serial entrepreneur and a pioneer in the digital space. Ben was first introduced to the world of insurance when Simon Monk hired him at Travel Insurance Direct. Back then, Ben recalls making bets on the platform selling 10 policies in a week. In 2017, the business is writing over 10 policies every minute!
A family man hailing from the Northern Beaches of Sydney, Ben breaks the stereotype of a hyped up digital disruptor. He brings a humble, fresh and unique perspective to the world of Insurance.
Ben kindly shares his journey and secrets on how to bootstrap an Insurtech.
Insured by Us is a white label travel insurance platform. Travel insurance tends to fall to the bottom of the list for general insurers, mostly due to the tight margins in travel. A motor or a home policy can make you hundreds of dollars in commission per policy and there is also an annuity stream. Using discounted cash flow models, insurers can predict, based on their churn rates, how much profit they're going to make out of each individual customer.
Travel insurance is a one-off purchase. Consumers don't have a lot of brand loyalty. They shop around and that means travel insurance falls to the bottom of the priority list. We built the platform based on the lessons I learned at World Nomads. It is low touch for insurers, underwriters and brands who are distributing the policy.
The Insured By Us platform allows the brands to bypass all the technical problems and focus on distribution strategy. We enable the brands on the platform to establish a distribution strategy and model that works. A brand like Woolworths is after high volume to enable cross-selling to their higher valued lines. A brand like RACV or RACQ are looking to drive benefits back to their membership base and earn solid commission as well. Some brands have broader products with features and benefits, but also a slightly higher price. That is the Insured By Us platform, we simplify distribution and make it easier for the consumer to purchase Travel Insurance.
Together with Peter Richardson, I have another business, 365 Roadside Assistance. Peter was previously part of the roadside team at ISOS so his knowledge was invaluable in this area. We are growing 365 through brokers, fleet services and retail partners like Midas. I personally like roadside because it has a nice predictable model, we know the frequency and severity of claims. Roadside is also not a regulated product, which is why insurers use it as a ‘foot in the door’ product.
In 2017 we launched a Lloyds agency called Agile Underwriting. Together with the help of Robin Barham Agile took on a slightly different model. We're attracting underwriters by providing some equity in the business. By offering 'skin in the game' we can attract people away from large insurers. The Agile business is growing, and the goal is to become a $100m GWP agency within five to seven years.
We see Agile as a counterpoint incubator for the large incubators. If someone has an intuitive idea we have an AFSL, access to the Lloyds markets, access to all kinds of capacities across all lines of business. Agile is across most lines of business, even space underwriting, as this is one of Robin’s areas of expertise.
Since launching Insured by Us I've been working four days per week. The first two years I worked from home, so I could be there when our first baby was born. The structure and flexibility we offer our employees is very attractive to both women and men. Surprisingly, it is not as attractive to younger people. They don't see the value in the flexibility and prefer to work in a place where there’s beer and vodka in the fridge, people stay back for drinks or go to the pub.
That is not Insured By Us. We always say we work to live and not live to work. Our team is distributed around the world. Remote working is the priority. In Australia, we have teams in Sydney Canberra, Melbourne and Broome, it is all about flexibility, for example our team member who now lives in Broome came in one morning and said,
'I'm moving to Broome, my partner has got a job and we're moving there.’
She knew her job wasn't in jeopardy and that she could just pick up her life, move to Broome and still have a job. She wasn't saying "I'm moving to Broome, what can we do about it?" She was just telling me she was moving to Broome. On a Friday, she packed up her house. moved over the weekend and on Monday morning she was at her desk on the Zoom. There was no productivity issue at all.
We have people in Cape Town, London, Scotland, Japan and will soon have someone in the US. Flexibility also works for the people who don't have kids. I have someone in the team who has no kids but wants flexibility, so the last two years she's taken a couple of months off in the middle of winter, this year she went to Thailand.
It's a mix. Our designer is in Japan. He moved there with his family. One of our senior developers lives in a remote part of Scotland. The team here in Sydney often call him The Code Fairy, because they go to sleep and in the morning, they wake up and he's fixed their bugs. There was an old IBM study about developers, that if you get four hours of good flow out of a developer, in a day you're doing very well. Having developers in time zones where they overlap is positive for our business.
Video meetings really help because you do need body language to communicate well. There's a small amount you do miss by not having the opportunity to go to lunch or drinks after work as a team.
Because we're remote first, all systems and tools are online. It is easy to know when someone is not being productive. We use Zoom and Slack a lot. Everyone’s activity feeds into Slack, so there's always a way to monitor what people are doing. But I don't want to monitor what people are doing. I don't want to hire people where I must look over their shoulder. I want to hire grown-ups who can get on with their job without me.
We are very Developer heavy because we are a technology platform. The make-up of the team is changing as we seek to own more of the value chain. As an example, we have just built an online claim system and gradually we aim to bring more of that in-house.
‘Travel with Jane’ is one of our brands where it makes sense to own the entire customer experience. You really don't experience an insurance product until you claim. It's simple for us to build a slick front end and a slick purchase path. But if we don't have a slick claims process and first-class customer engagement it's all for nothing. Customers won’t come back and buy again.
We're finding that when you outsource the claims function to a third-party administrator it doesn’t suit your business as well as if you bring in-house. World Nomads went through this very issue, so I'm not reinventing the wheel.
In a large insurer, you have many kinds of people. What we're looking for, from people leaving a large insurer, is an entrepreneurial spirit. People who are frustrated with the internal structure, who want to get sh#t done and are frustrated by their current environment.
It's not hard to find claims people who want to do claims, it's not hard to find content and marketing people. It's very difficult to find good developers who have any domain knowledge about insurance. It's very, very difficult to find any actuarial skills or anyone with any data science or machine learning skills as well. These people are very thin on the ground. Someone recently fell into my lap with data science and machine learning abilities. I snapped her up as quickly as I could.
I'm an advocate of starting your own business and bootstrapping it. So not taking any external investment. I will always want my children to start their own business. My wife and I would be at dinner parties and someone would say ‘I've got this idea’ and I would respond 'do it leave your job now, do it, do it, do it' My wife would be kicking me under the table. Then we'd leave the party and she'd say ‘you know John, who you just told leave his job? He is the worst person to go into business for himself. He's going to totally fail.’ And she was right.
I've learned this the hard way, going into business for yourself is not for everybody. Every day is a grey area. Some people can thrive on and hack it and other people can't.
People come to work and they don't realise that there's a whole bunch of infrastructure to allow them to have a chair, a desk, a computer, the internet connected, payroll, all those things. When you start a business, some people don't realise that you must wear all those hats until you can afford to pay someone else to wear the hat for you.
The reason Agile exists is a desire to broaden the portfolio of products away from travel. We did launch a couple of products with large insurers here in Australia. Those products were live, selling and had customers. But they were pulled from the market because of internal political reasons within the insurers.
To get those products live involved a two-year journey and after just a few months they were pulled. That is when I literally threw my toys out of the cot. I called Robin Barham, who at the time had just finished up running Arch in Australia and we formed Agile. I called him up and said ‘Robin, I'm done dealing with large insurers I need access to capacity.’ Lloyds gives us the flexibility to do really niche products.
The lack of appetite for risk from large insurers is my biggest frustration. A perfect example: Agile picked up most of a large insurer’s Aviation book, worth around $15m in premiums. This insurer was prepared to drop that business altogether.
For Agile $15m of premiums, that's an entire business division and they we're just going to drop it because it just wasn't worth their time. This insurer couldn’t make it profitable even though there was only a team of two or three people working on it. I find working with large insurers and the incumbents massively frustrating. They're so risk averse to trying new things which makes it difficult to get any venture off the ground.
Legacy systems are a problem, but those challenges are solvable, if we're collecting the right data. When we started Insured By Us we were sending data in multiple formats to multiple underwriters. Now we've built our own data warehouse, we give each underwriter a single feed coming from our data warehouse exclusively for their data.
From our perspective, the client owns the data and they need to get it in real time, in a raw format or they can get it in a pretty dashboard format from our live web service. Initially, this was a tricky problem to solve, but it is just data. We find it interesting that large insurers have trouble consuming data, aggregating across their book and then using the data in an intelligent way.
There is a significant barrier to entry. I was fortunate in that I had domain knowledge both in insurance and in technology. I also had contacts in the industry. But the first two years were hard. We’re four years old now and I've only just started paying myself a proper wage and super for example. But that's the life of a start-up. Right? I was underpaying myself for a long period of time.
Many people will point to regulation as a barrier and it is, but I'm more of the mind that regulation is a good barrier to have and that you need to earn your stripes. I don't find regulation a big barrier, I find the appetite for risk from the underwriters is the biggest barrier. Even within the products that we're offering now. Looking for an innovative way to sell travel insurance and getting underwriters to buy into that idea of selling travel insurance in a different way is almost impossible.
I have only recently, in the last six months, started worrying about another Insured By Us coming along and leapfrogging us. That's what worries me. I'm not really worried about a large insurer waking up and getting their tech in order because I'm not sure it is possible to be honest. Insurers are increasingly looking to partner with technology start-ups. Maybe that is the way forward for them because to get things done rapidly you need to do that outside of or at least at arm's length from a corporate environment.
My biggest worry is another Insurtech coming up while Insured By Us becomes mired in the compliance frameworks hampering large insurers. When this happens, you get stuck and inevitably miss the opportunities to innovate.