Man and Machine Working in Harmony: Ryan Mather, CEO, Ariel Re

This week’s guest on The Voice of Insurance podcast is Ryan Mather, CEO, Ariel Re. In this episode, Mark Geoghegan and Ryan chat about the strategic and cultural changes at Ariel Re since its acquisition by private equity investors, the benefits of algorithmic underwriting, and the lines of business Ariel Re is focusing on.

Since going private in 2020, Mark kicks off the discussion by asking Ryan to discuss some of the notable changes since then. Ryan comments that having a board of directors that understands risk so well has given the company the advantage and confidence to grow and build a team of super engaged people. Talking about the company´s vision and capital, Ryan adds, “We’ve set ourselves up, and we say that we want to be the premier manager of reinsurance risk.”

Elaborating on the public’s perception of Ariel Re and what they want to be known for, Ryan says, “Most importantly, we want to be thought of as profitable because without profitability, there is no sustainability there, so that’s fundamental. But really, we want to be considered a thoughtful, consistent, predictable partner who does the simple things well and always has capacity, always has a yes attitude. There shouldn’t be any risk that we don’t take; it should be, yes, we can take that risk, but here are the terms and conditions around it.”

Speaking about Ariel Re’s portfolio, which Mark describes as eclectic, Mark asks if the company is looking at adding any new lines of business; Ryan responds, “There’s nothing we’re going to be announcing imminently. The biggest focus we have at the moment is on cyber because we see that as such a growth engine of the world´s P&C, and we want to do it best than anyone else, so that´s really where our growth is going to come from.”

Algorithmic underwriting

Moving onto the topic of technology, Mark asks where Ariel Re sees itself in regards to InsurTech, and if the company prefers to build its own systems or use insurance software already available on the market. Speaking about its technology, Ryan remarks that the company is very fortunate to have people who understand technology, adding, “So we’re constantly on the lookout. So far we’ve built a lot of our own tech, so we have our proprietary portfolio pricing system,” which Ryan says has given the company a tremendous advantage.

As for automated underwriting and the benefits of automating specific underwriting processes, Ryan says, “What we’re trying to do, we’re in a very complex, highly regulated business. We just need to make sure that we as a business are as simple as possible. We understand the processes really well, and then we can automate. What we’re trying to move towards is a situation where our human beings do value-added human being work, nothing repetitive, no cutting and pasting, etc., and any way that we can make ourselves more efficient and have fewer humans doing boring things that will put us in good stead.” Ryan adds that the aim is to minimise human intervention for things that aren´t needed and that aren´t considered high-value tasks.

Mark asks if Ariel Re is moving toward algorithmic underwriting; Ryan talks about reaching the balance of machine and man working in harmony, and how Ariel Re already does a lot of algorithmic analysis on its portfolio, but that a human always oversees individual deals. Speaking further about algorithmic underwriting, Ryan says, “We’re moving partly in that direction. A computer can run a million simulations in a few seconds, and our Underwriters can´t. So let’s allow the algorithms to do what they’re good at and allow the human beings to do what they can do better.”