New VOI Podcast

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What’s going on in the Lloyd’s Lab?

From IVF insurance to AI-driven claims processing, Lloyd’s Lab has been a London market incubator of emerging risk and technology solutions in recent years.

The latest Voice of Insurance podcast features Rosie Denée, who is the head of innovation, commercial education and engagement at Lloyd’s of London.

Her role means she is in charge of the Lloyd’s Lab – the inhouse Insurtech incubator set up by Lloyd’s in 2018 to promote innovation in creating technology driven solutions to risk transfer and re/insurance market challenges.

Since 2018, the Lab has run 12 cohorts with more than 130 alumni companies; its startups have achieved a 97% success rate; some 85% of Lab alumni still work with Lloyd’s; and the incubator was ranked in the top 25 out of 2,000 European accelerators by the Financial Times newspaper.

Like many, probably most people, in the market, Denée “fell into it” when it comes to her insurance career, after initial plans to be a marine biologist, before taking a job as a broker in political risk and structured credit.

Her Lloyd’s Lab job is her “gold” she suggests, declaring “I absolutely adore what I do”, adding that the 13th cohort has now entered the lab, by now a few weeks into its ten week tenure.

“The amount of prep and work which goes on behind the scenes, not everyone gets to see it, but it’s all a slick machine now, and we have definitely articulated and evolved the process over time,” Denée told host Mark Geoghegan.

The Lab exists to serve the benefit of the future Lloyd’s market, Mark observed.

“I think our North Star, as the Lloyds lab, is to increase the pace of successful innovation into the Lloyds market,” Denée replied. “So as long as we’re meeting that, we are going on the right course.”

Entrants can come in all shapes and sizes, offering solutions to all manner of inwards or outwards facing market challenges, from process optimisation, new forms of data, new products, and managing general agent (MGA) structures.

These entrants can be “weird, wonderful and wacky”, she acknowledged, before noting the necessity of this for innovation in what remains seen as the most traditional of traditional markets.

“As it should be. These are new ideas. We want people thinking outside the box,” she said. “We don’t want people thinking in set squares. It’s here to challenge what we know and understand as our world, as the insurance market, or [as] the Lloyd’s market.

The startups are directed to focus on product development, partnering with mentors – brokers and underwriters in the market – and partnerships may then develop after graduation, she suggested.

“The mentors are stretching these products in ways that they wouldn’t be stretched otherwise, and through that, we are creating solutions which will really fit the market need. Hence, there is a high commercial deal rate once the cohorts have finished,” she said.

“But also things have failed, and that’s also a success. From recent memory, there are some companies which will never get into the Lloyd’s market, and that’s all right, but what we have done in that process is move the market thinking.

“Not everything needs to be a success, and the wonderful thing is, we’re here to serve the market. Through economies of scale, the market don’t need to do this; we have a safe space for them to come together, collaborate, test new ideas, get together and challenge what they think should be done,” she added.

Success can mean different things, but the lab does track things like premium volume for its MGA alumni. Now in its sixth year, some of these MGAs are beginning to scale up in premium terms, she suggested, but that it really does take this amount of time to see such success stories from the first cohorts begin to bear fruit.

“We’ve had brand new insurance products created through this lab program. We’ve had Parametrix, which is a cloud down, business interruption insurance cover. We’ve had Gaia, which is fertility insurance. These didn’t exist before the Lab, and these are the sorts of products that we’re seeing coming to market,” Denée said.

Insurers like data – it creates confidence – and this is the primary reason why such products take time to scale up, rather than insurance companies backing them with huge capacity from the outset.

“No one’s got any data on this. Everyone in our market, the actuaries and the underwriters, they’re trained with that protected mindset that they’re not going to want to scale something at 100 miles an hour without seeing the numbers,” Denée continued.

Even later, Lloyd’s doesn’t always own the data, so it can be hard to trace the success stories. She listed one exception as Optalitix, which was part of the fourth cohort through the Lab.

“They partnered with Lloyd’s straight away, and they were able, through the catastrophe risk reporting piece, to save 1,300 man-hours within the first year of working with Lloyd’s,” she said.

In other cases, it is by looking at commercial contracts that success stories are measured.

“Cohort 12 graduated quite recently, and within the preceding couple of months, there were 20 commercial contracts already with the Lloyd’s market. Out of 12 companies going through the cohort, that is huge,” she said.

“Our overall stat is 85% of the companies who’ve gone through the Lab accelerator program have commercial relationships, but that speed is getting faster and faster,” Denée said.

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