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In episode 25, Christopher M. Wells, Ph. D., Indico VP of Research and Development, and Michelle Gouveia, VP at Sandbox Insurtech Ventures, speak with Tom Wilde, Indico CEO, about Everest Group declaring Indico a leader in intelligent document processing – and in delivering value.
Christopher Wells: Hi, welcome to another episode of Unstructured Unlocked. I am co-host Chris Wells.
Michelle Gouveia: I’m co-host Michelle Govea, and we are thrilled today to have Jay Novis from QBE Ventures join us. So Jay, thanks for, for agreeing to do the podcast with us.
Jay Novis: Thanks for having me, guys. Yeah,
MG: This episode will be slightly different than I think other ones where we’ll probably dive in a little bit more onto the venture capital side and a little bit more of like what’s happening in that industry as it relates to, to insurance and what we’re seeing. So get really excited to have to have you want to, to chat about that since you know, Jay and I know each other from just the, the venture capital, InsureTech space, conference circuit, et cetera. And so I’m looking forward to diving in with you on this. Very good. Do you wanna maybe give a little bit of background about yourself and you know, how you got into the VC space?
JN: Sure. thanks for having me. Firstly, guys privileged to be my first podcast. So I’m Jay. I’m in a investment associate for QB Ventures. I’ve been with the firm for a year now. Previously I worked at PWC in out of Sydney, Boston and New York. You know, born and raised in Australia, Sydney. And I moved to the states two and a half years ago. I lived in Boston for a year and I’ve been in Chelsea Manhattan for sort of two years, one and a half years. So I joined QB Ventures about a year ago as an investment associate. So I sit, you know, within the investment team mainly sourcing investment opportunities financial due diligence over potential opportunities, and then also work over existing portfolio companies. So, so I’m from Australia. Originally I was with pwc, and then I joined QB Ventures a year ago when I moved to the States.
QB is a global P N C insurer. I think we operate in 27 plus countries. We’re headquartered in Australia, but enlisted on the as X in Australia. But, you know, global in nature. Mainly commercial p and c insurance. And, you know, we do a lot of work in Australia, north America Europe, a lot of work out of Lloyd’s in London. And, you know, the operations do vary quite significantly depending on geographic region. So I think in North America we’re a big crop insurer and, and ag insurer in, you know, Australia, it’s mainly just anything commercial p and c, and then sort of out of the UK and Lloyd’s, a lot of specialty lines marine aviation financial lines, cyber and then sort of QB ventures. We sit within the group. But we’re also an international team, so we’re split across Australia north America and the uk. We’re definitely more on the strategic side, so you know, we’re a strategic C B C you, we sort of invest to, to help better the mother company qb provide more insight be more efficient and yeah, that’s a, that’s a bit of background.
CW: So I, I think I may have missed it. You came in through the insurance side and now you’re part of the cap captive venture?
JN: No, no. So yeah, so I, I’m new, I was new to insurance and VC at the same time with this role. Mm-Hmm. <affirmative>. The background is in sort of financial due diligence and accounting and m and a transactions. And then, you know, the VC insurance space was new. Obviously it helps to be in, get in touch with my Australian roots joining an Australian company. But yeah.
MG: So we, we talk a lot. So Jay, I think, you know, just you know, for those listening at home, Jay and I know each other from just the, this, the vc, InsureTech, VC circle you know, my background was in insurance before I joined the VC space, but like still learned the VC role, the financial and investment side after the fact. But learning kind of both of those at the same time. Was that like super hard? Like, do you still feel like you’re, you’re learning a ton? Like when we go to conferences, I feel like there’s always a new technology or capability. I’m like, wow. Like I’ve never thought about how to apply that to insurance. And I think Chris and I, every time we, we talk to someone or, or have a conversation, we’re like, wow, insurance is really complicated. <Laugh> Yeah. That is like, you know, cut and dry as people assume it to be of just like, here’s a policy, buy it now I’m insured.
JN: Right. Yeah, no, it was definitely, it was interesting. I was sort of learning both worlds at the same time. Q B E was actually a, a big client of PWC when I was at pwc, and I did work on some insurance clients during my time there, so I sort of had a little bit of background on, you know, the basics of insurance, but obviously, you know, not, not enough to sort of go and invest and, and change, change up the industry. But yeah, it was, I have a good team around me. So they’ve been, you know, I’ve learned a lot from them. They’ve been in the insurance space for like, decades, some of them. So that obviously helps, you know, we’re a tight-knit team and they’ve done a lot for my development, so doing a lot better than I did a year ago.
CW: A shout out to your team and your boss there. Well done. You talked about a big part of your role being sourcing investments. What does that look like today?
JN: Yeah, so we, I guess our investment thesis, so, so we, we source externally, you know, go out to startup companies and through connections, through sort of cold calls or cold reach outs either way conferences, you know, general connections within the space. I think most people in most in sho techs within sort of at least North America, sort of know each other. It’s, it’s sort of quite a small world. But, you know, we will either source externally at like that or we’ll get an internal referral from Q B E. So it can kind of work both ways. You know, they might be working with a third party or a vendor run running a pilot or p o c, and they might reach out to us and say, Hey, have you looked, have you thought about investing in these guys? You know, we’re working with them and X, Y, and Z. So it sort of works both ways. As you can imagine from a due diligence standpoint, you know, if, if your company’s been working with a startup for three months there, that definitely helps a lot of the paperwork’s filled out already. Yeah. <laugh>
MG: And, and Jay be, because as you, as you noted that Q B E is pretty broad in the P n C insurance space, right? Depending on, on the geography you’re in, are you getting an opportunity to, to source companies that kind of touch on all those different lines of business? So like, and I’m thinking like in my role too, right? We’re pretty, like all comp, all encompassing in terms of the InsureTech landscape. So we’re looking at any, like any line of insurance, any kind of area of the insurance value chain that I might be touching, whether it’s intake, underwriting, claims, data and analytics. But I imagine that for you, like you, you could have a whole week of like sourcing companies that are focused on crop insurance and the following week it’s all, you know, inland marine companies or something like that. Is that,
JN: Yeah, I mean, so we have our defined focus areas. You know, we’re big on the sort of the risk management and resilience player. But then also sort of in the, on the core insurance, you know, tech adjacencies relating to underwriting and, and claims and, and, and MGAs themselves. You know, since we are global and we pretty much touch one line of insurance in some way or another, it, it does open us up to a variety of opportunities. I guess it’s just about prioritizing qbes, you know, wants and needs. In, in terms of sort of the global landscape, most of our portfolios are US based you know, we do have a couple in Europe in one or two in Australia but most of us based, but sort of I guess how we’re different and, and what we can offer with our you know, str global reach and presence is we can help companies sort of set up and, and start shop overseas and sort of cross those international borders, you know, whether it be moving from us to Australia or to Europe, we have, you know, not just QB itself, but our team has, has spread out internationally to help facilitate and accelerate that process.
So that’s sort of, you know, how we see ourselves different, I guess, to some other CVCs. But in terms of, in terms of sourcing, you know, it’s, we’re, we are pretty global I guess in terms of where we look, but, but mostly us-based, I guess
CW: That ability to help small companies make beach heads elsewhere is massive. I just want to double click on that real quick. That’s cool.
JN: Yeah, it, it’s, I’m not saying it’s an easy or short process, but it, it, it’s something we’ve been successful in doing in the past and, you know, plan to keep doing moving forwards. So
CW: Right on. So in, in terms of some of the areas that Michelle mentioned across the, you know, the business life cycle and the different verticals what are you seeing in terms of I’ll be the tech nerd, it’s my job here. Yeah. What are you seeing in terms of trends in the technologies, the things that are starting to pop up, the things that are not so popular as they might have been? I’m curious.
JN: Yeah, so I think generally speaking, sort of automation in on both the underwriting and claims side continues to be a big focus area. You know, and if you speak to some of the underwriters out there, not just at QB in general they’ve sort of got, you know, there’s no sort of system that encompasses everything. You know, they’re, they’re working with different systems across the value chain of insurance, so, you know, and that don’t talk to each other necessarily. So it can be sort of time consuming and and frustrating from them. So I think, I think to answer your question, you know, platforms that can be sort of a, a one-stop shop I is a sh is a, is a huge, progra is a huge sort of focus area. Generally speaking in underwriting and document ingestion you know, I know you’re familiar with this space, obviously, but you know, to, to speed to, we’ve sort of found that to speed up business means you can win more business as well. So sort of efficiencies addressing inefficiencies in the, in the document and submission intake. And then I guess just technology. We’ve, we’ve been very active in the geospatial area and sort of aerial imagery space especially around property inspection in that cat risk, sorry, go ahead.
CW: No, no, that’s fascinating. I, I didn’t expect you to say that. That’s cool.
JN: Yeah, no, e especially for, you know, I guess Nat Cat, you know, hurricanes, cyclones we’ve seen a lot of those over the last few years. So to have that technology, like a different view to provide more insight sort of pre and post incident management in crisis management has been really helpful.
CW: And natcat: natural catastrophe.
JN: Natural, yeah, exactly
CW: Right.
JN: Cool. Insurance <laugh>.
CW: Yeah. I have to be our conscience when it comes to insurance lingo.
JN: Yeah.
CW: Okay. Yeah, go ahead. Go ahead.
JN: I only learned to yesterday, that’s why I’ve been, that’s why I said that three times.
MG: So Jay, on on on that, right? When you’re whether it’s the business coming to, to you and saying we’ve been working with, with this startup, it may be worth you taking a look or you coming across a startup that you think the technology is relevant and interesting, and then you want to introduce it into, you know, to to someone within QBE to test it out. What are, what are some of the things that, that you, you QBE Ventures look for in terms of stage capabilities? Like are you, look, are, are you guys interested to the extent that you can share, right? Are you guys interested in really, really early things that Q B E can help kind of form and shape and and build or with the company? Are you looking for things that are really more enterprise ready to deploy that have some, some true ROI metrics behind that you can point to before you make an introduction into the business?
JN: Yeah. Yeah. No, it’s a good question. It’s sort of a fine balance. It’s like, I mean, really we look at series A to C, that’s the sweet spot. We have made a couple of seed investments you know, depending on the sort of strategic case or on and the company. But it’s sort of, you know, you want them to be, we like companies that are early enough that you can work with Q B E and you know sort of learn and work together and, and, you know, run pilots. And sort of, you know, I guess create a relationship that will work for both companies. But you, you don’t, you can’t be too early that, you know, you need to go through QB doesn’t have the time to help the company, you know, set up shop and, and find and finalize the product.
You sort of need, they need to be well established enough to hit the ground running but early enough to sort of be flexible and, and nimble and, and, and be able to work with Q B E. And we find that sort of series A to B spot is perfect for that. Mm-Hmm. <affirmative> you know, they have, they do have product market fit. You know, they do have, they are earning money. They do have some a r but there’s a lot of growth opportunity and, and you know, Q B E can help shape that roadmap to, to be so they can be as effective as possible in the insurance industry. You know, check size is typically two to five mil is is normally what we ride. And then we do lead and follow with investments. Typically we like to follow. But if the strategic case is really strong and, you know, we’re already working with the company internally then we, then we may lead as well.
CW: Totally. Yeah. So, you find a company, they’re early stage, they’ve got product market fit, but they’re trying to figure out how to scale to the, to the rest of a very large market. Right? How do you, as you bring them in and have them working with Q B E so closely, how do you keep them from overfitting to Q b?
JN: Yeah, no, that’s a good question. I I think a lot of, you know, a lot of the carriers sort of have the same, same end goal, I guess. And that’s just, that’s just to be more efficient in how they are, you know, underwrite payout claims digest documents and then, and then more insight. So we don’t, you know, when we help our companies, like when we run pilots, we, we love to see our portfolio portfolio companies and companies we work with go and work with other carriers. Yeah. and be successful, you know, with other carriers it’s sort of a win-win for everyone. You know, cuz then they can learn from them and they can sort of expand on their network within, within the insurance industry. But you’re right, it is definitely a fine balance between managing Q B E, but then also the company’s growth more generally in the insurance space. But I think usually they sort of do work hand in hand for the most part. Cause they, Chris,
MG: Surprising of what Jim from Microsoft on a recent episode said where insurance carriers are all unique, but they’re like snowflakes, right? They’re all unique, but they generally follow eight patterns. Right. I think I got that right <laugh>, I feel like that’s, that’s probably in, in that, that specific scenario that, that you’re referencing because you know, from our perspective where we are not a C V C and we work with an a number of different carriers, right? Companies that we look for we hope that they’re responsive to many if not all of of our investors. And for that, like you want them to be able to, to Jay’s point, be flexible enough to, to take it and say you’re working with this system versus that system. Like we, we can connect in into that. We’ve worked with that before, but there’s also, you know, IP that that carrier is bringing that, that benefits and, and makes the product its own and, and drives the outcomes as specifically to what the carriers need.
CW: Got it. Yeah.
JN: And the, the relationship usually works better than more flexible. You know, the, the, the startup or the partner company is you know, there might be some comp could be, might have a request, you know, can we change this? Can we customize this? You know, sometimes the companies will come back and be be like, no, we’re fixed in our ways. Un unfortunately we can’t do that. Yeah. Other companies will be like, of course, you know, and then sit down with us and work together to sort of build something unique. So I think it’s just, you know, and, and that can be, that can form quite a powerful relationship. So it’s, yeah, I guess every company’s different.
CW: Yeah. Co co co-development is a powerful force if you can make it work. Well, that’s been my experience, yeah. Here and elsewhere.
MG: Jay, I don’t know if you’re, if you would know just from, from where you, you sit and who, who you’re working with, but like Chris and I are still eager to do a regulatory, this sounds so exciting, right? About a regulatory episode. And so I wonder from, from your perspective, woo, right, <laugh>, from your perspective like the, this, like when you guys are looking at a company or when QBE e is is working with, with a startup, do is one of the the things that you as, as representing the carrier does, like, do they, can you partner with them and does, does QBE kind of help them get through some of the regulatory landscape? Or is that, you know, cuz I’m just thinking through like if it’s an M G A or you, you know, you guys wanna go expand into geography, then maybe that, and yet do you help them with, with some of the, the filings or product pricing or things like that? In those partnerships? I’m not sure if you, if you’re close enough to some of those.
JN: Yeah, I’m, we, we, we definitely candor and you know, with our global presence and sort of, we do look to make that move and help them grow internationally. So part of that does come with understanding the international framework. I think that’s sort of when you, you know, divert to the different business units like globally to help the company do that. But a lot of the due diligence upfront is, is done upfront by our team and we’ll look at that, you know, depending on the underlying technology and the platform. You know, for example, if you’re sort of in the, you know, healthcare or, or healthcare space you know, a lot of that isn’t really just it, it just wouldn’t work anywhere else. That might be a, you know, specific to one country or another. So we, we do look a lot at a lot of that upfront. And then if the opportunity is there, then definitely we, we get our get hands on deck and you know, the relevant business units to help facilitate that cha that sort of change.
CW: Interesting. Is another example like a US company going to Europe and having to cope with gdpr, is that the kind of thing?
JN: Yeah, exactly.
CW: Yeah. Okay. Interesting.
JN: Different, yeah. Rules and regulations. Especially around data.
CW: Yeah, of course. Yeah. Yeah. This is a total left turn, but I don’t wanna forget to ask cuz I’m super curious. You mentioned Cat are you seeing any technologies
MG: Using those abbreviations?
CW: I know I’m a, I’m a quick learner, Michelle <laugh>, I’m on, I’m on it. Are, what are you seeing in like the climate change space? Like are there any technological hopes for Florida? You know,
JN: Yeah, I’m, we’ve been doing a lot of work sorry, I dunno if I’m allowed to share this, but we’ve been, so we were liable for a lot of the, for Hurricane Inn and, you know, a lot of the flooding and, and I guess that’s not really climate change. Sp specifically that’s, you know, our favorite word natcat and, and like, you know, we’ve, it’s definitely on the radar. You know, no doubt. So we are looking at sort of more on the resilience, risk management space, I would say in terms of trying to get better, trying to use technology to get better insight and understanding for for impact. And, and the idea is that if, you know, if, if we can sort of avoid you know, the, the, the, the best way to manage a claim is to avoid one in the first place. Yeah. So if we can sort of, for example, you know, use this technology to, I mentioned sort of aerial and geospatial technology to dive deeper into certain areas of risk of these of natcat risks you know, we can look at sort of the, the roofing or the construction of properties and understand better, you know, how, what risk they’re at depending on the, the quality of the materials and sort of, you know, spatial awareness of how close they are to, to flooding risk, et cetera. Yeah. if that makes sense.
CW: It does. And stuff like that is more dynamic now than ever before. So that real time insight super powerful. Yeah. Yeah, that makes sense to me. Okay. Sorry, that was
MG: No, I’ll jump in there too. Cuz I think some of the things that we’re seeing really, like climate change is a big topic, right? And so even within how is the insurance industry responding to it? What are the things that they have to look for down the line or be concerned about is also a big topic. And so you’re seeing things, I’m, I’m not gonna hone in on your like Florida specific comment cuz I, I like Florida, I don’t want Florida,
CW: So my parents live there half the year. Yeah.
MG: But so like, and, and I mean it varies, right? Like California, the prime example is wildfire risk, right? And, and obviously now with what’s happening in Canada and, and the air quality as it comes down to, I think we’ve all been affected in some, some way, way by it. You know, like you’re seeing a lot of startups saying we can bring new data or bring variables in that aren’t something that like the, the incumbent solutions are modeling for, to try and be better predictors to Jay’s point of what is really at risk you know, how to underwrite, how to be, how to select those risks more efficiently and effectively. Same, same thing, copy and paste for when you’re talking about hurricane risk or you know, tornado risk or things, you know, any, any natcat that you would, you know, be concerned about.
That’s right. But <laugh> keeping your running Sally. But then there’s also I think I’ve, I’ve mentioned it maybe on a previous episode some of these companies are really going about it from like a value added service perspective. Yeah. And so like, like what are the things that we can provide our insureds to, to try to prevent the claim from even happening, right? Like, what are recommendations we can make? How do we use aerial imaging to, to indicate, oh, you’ve got, you know brush near too close to the house you’re in and you’re in a wildfire zone. Like, what’s the recommendation we can make to you to, to clear that or keep that clean? You know, there’s companies out there that are using weather data to proactively reach out and say, it looks like you’re in the path of a storm.
Here’s what you should do to try and protect your home or your, you know, your, your vehicle, et cetera. And then using that same data after the fact to, to check in and say, it looks like you didn’t get affected or it looks like you did. I think the core to all of that, and what interests, at least me is, is the data and the fact that you have to be sure that your data is accurate because that’s what you’re relying on to do things like offer parametric insurance products do, do outreach to your insurance when it makes sense and not kind of freak anybody out or scare anybody. But then also be on the backend if there is a claim, responsive in a way that’s meaningful, right? Like proactively help them, you know, he, here, here’s, here’s your check to help with damages, or here’s how we can help you relocate. Or we’re sorry this happened to you. Like, here’s ways we can help, like let us help you get the claim started as opposed to figuring out where you have to go. Yeah. and going back to you know, our common theme that we always thread is like, so, so how do you internally take in that data, manage it, and then use it in a way that can do all of these things in a way that that is efficient and makes sense?
CW: Yeah. Even even that simple example of like, there’s brush near the house, right? Like finding brush, finding a house, estimating the distance and then contextualizing it like, brush near my house, not a big deal, it’s gonna rain six outta seven days. Right? But in California that, so that, yeah, it, that is a thread we pull quite often, which is that data management data contextualization problem. Yeah.
MG: And, and Jay, when, when you’re thinking about it from, from what you’re, when you’re sourcing companies against like what, what the broader QBE organization is looking for are you, like, do you tend to try and find things that are more general use cases or do you really sometimes hone in and say, we are looking to solve this very specific, I’ll even call it niche problem, and so we’re really interested in finding a, like a, a one solution type company that does really good at this? Or do you guys t typically take a step back and say, that’s a capability we’d like, but we’d really like you to be able to do these four or five things?
MG: Once an episode, at least
CW: Once I, I’m gonna buy you a t-shirt with that on it coming your way. Funny.
JN: I mean, it’s true most of the time. Everything does depend. I think I will say in terms of, you know, what helps, you know, cause a lot of, a lot of startups do wanna work with CVCs to get exposure into that, you know, with the backing of the, the insurance industry especially like a global insurer like QBE for example. I think what what always helps is sort of when the companies come to us with like an internal sponsor or, or an understanding of the specific business unit they plan on working with and, and ex and specific examples of use cases. That sort of, you know, cuz there’s, that just helps with the efficiency and, and, and procurement as well. So, you know, on the strategic partnership side you know, there’s a lot of work around procurement.
You know, we help companies frame up pilots, so the more specific the use case generally the more efficient and the better the process. I’ll also say from a, from a investment standpoint just having, having a more complete data room and sort of is always helpful so you know, and including or sort of legal transaction docs upfront whether it be, you know, past rounds transaction docs from past rounds you know, if you need, let’s say if you’re soc to certified you know, having all this information available upfront is, is very helpful, especially in a big bureaucratic Sorry, go ahead.
CW: I was just gonna say for some of our audience, the whole concept of a data room may, might be a little foreign. Do you mind step back there and framing that?
JN: Yeah, it’s basically almost like a shared a shared document room where, you know, a company can post documents or upload documents I should say for investors to, to go through and read. It’s like a shared, a shared I guess if you wanna call that.
MG: Yeah, I’d say it’s, it’s really it’s, it’s the landing page for everything that on the VC side an investor would need to, to do their analysis and diligence to determine if they’d like to make an investment going forward. So usually you’ve got like value proposition of the business case studies metrics that about like re return on, in, on investment and like results from pilots or, you know cur current customers that you’re working with financial projections. And then to Jay’s point, kind of all of the, the fun legal stuff that you need just to understand what the history of the business has been to this point. It’s just always helpful when a startup does this sort of homework upfront and sort of ask those questions upfront just to save time in the process. You know, as you can imagine, you’ve got a, it’s a big company you know, there’s a, just to sort of cut out the fat of the, the layers and the procurement, if you have sort of all the documents and, and questions and answers sort of ready upfront as much as you can do that, that always helps the process. So we find the relationship it just works better with, with the companies who do that. You
MG: Know, I think that, I think it’s interesting Jay, that, that you brought that up as part of, of your response to that question, because I think, no, because I think a lot of times, like, you know, the, the kind of cliche is, oh, the insurance industry is so slow to move and like they’re, it takes forever to, to get anything done. But then on the flip side, it’s like, well, at, at the, at the end of the day though, they’re a data driven organization and they’re a process driven organization. And so if you’ve got what they need from a data standpoint and a process standpoint, it will move more efficiently than if you’re missing some of those components, right? To whatever you’re trying to, to work on. And I think that the misunderstanding is that startups are so quick and can come in and like, get things done quickly, but I think what entrepreneurs are starting to realize and what’s starting to become even a benefit or kind of seen as a, as a positive is like carriers iur, the insurance industry is coming up to speed.
Like the, there’s a years and years and years of legacy systems of disparate systems a lot of ad hoc processes and workflows that have, have been built in order to keep things moving and within those are locked a lot of data that can’t just be ignored or forgotten about as you move forward into new, new workflows, new systems, new core, you know, core systems, et cetera. And so it’s really important that everyone kind of is transparent of this is where I am and this is where I, I need you to meet me in order to get anything done. Whether it’s, it’s a partnership getting through procurement to get that partnership started. And so even, even in the, the internal like day-to-day of the insurance carrier, just any type of data intake is super important. <Laugh> like, yeah, for, for all of the various things that an insurance carrier is trying to do, whether it’s like day-to-day insurance operations or trying to, to innovate, they need, they need those, those various
JN: Yeah. I’m, I’m curious and Chris, you might not have the answer to this, but on the flip side, what’s the relationship like from, you know, Indigo’s standpoint for working with carriers? Are you guys saying, oh my gosh, these guys are so slow, it takes two years to get things done?
CW: I wouldn’t, so there are, there are two answers to that. There’s the sales cycle answer, and then there is the, like onboarding a new technology answer. I would say I’ve been pleasantly surprised having worked with insurance companies in two different verticals selling into them, or at least, you know, at least being the nerd that does the song and dance to help sell into them. I have been pleasantly surprised with how fast our sales cycles have been. So, and I, I think that’s partly that has to do with just where the industry is today. You know, it’s been a decade or more of talking about digital transformation and I think companies are, they’re really, really doing it right now. It’s not just lip service. Yeah. On the onboarding side, I think I have seen cases where, and this is not just true of insurance, but just large companies can’t get out of their own way technologically.
They’ve built processes for good reasons, but they’re extremely rigid. I think this is not, I’m not trying to throw rocks at any of our clients or prospects, but I, I think it is often true that the best folks in technology don’t end up in, in insurance companies. I think that’s changing a little bit now as people have realized that insurance is doing really interesting things, but historically that hasn’t been the case. You know, you’re, you’re a Google or AWS or wherever if you’re really good at technology. And so I, I think the real impact of that is that the technology processes are often a bit out of date. And so a little company like Indico with a powerful platform comes in and wants to go fast. And it’s like, well, hold on guys. We, that’s not how we operate. And we really have to bridge that gap in a lot of cases.
JN: Yeah, I guess the, you’ve got like sort of the bigger insurance carriers and then you’ve also got some of the smaller players, you know, I, I don’t know, like maybe more like MGAs or MGOs or Yeah. Some of the more nimble carriers. So I guess it depends.
CW: Yeah, no, that it, it does depend. And it, it really is sort of the speed at which a company can implement is inversely proportional to their size in my yeah. Experience, which is not a surprise thing, but I’ve got real big and scars to prove it.
JN: Yeah. <laugh>,
MG: I think going back to, to Jay’s point about you know, coming in and just being very clear about what you do and like what you can solve, I think at, at, at the core, right? We talk about this often the, the two main thing, even if you’re a solution, a startup that does something on, I’ll call it the periphery of these two things, everything within the carrier is, is focused on the underwriting or the claims, right? And what’s associated with that, the customer experience as it as, as it relates to how fast it is to get the, my information, how easy it is for me to submit an application for you to look at it and then give me, gimme a price, right? To then ultimately bind that insurance policy or on the claim side of why I don’t wanna have to call you five or six times.
Like, how can you get my information quickly and effectively? How can you meet my expectations of how fast something will get handled you know, have a little bit of empathy and sympathy for whatever situation I’m in that has caused that claim in the first place, right? And so when you, when you step back and look at all the different startups kind of in the, what I’ll call the landscape of InsureTech I think it really still boils down to how do I better, how do I, how am I supporting underwriting or, or, or even within like outside of that, a better product that can be underwritten for the needs of the end customer. Or how do I support my customer when, when there is a claim? Because at the end of the day, the core, the core business of an insurance carrier is claims, right? That’s, that’s what they’re there for, is to help you in a time when you have an insurance claim.
So that’s how I think about it. I, that’s my thesis, that’s how I spend my time. Like when I’m, I believe you looking for companies and, and talking to companies at conferences and looking for solutions that might be reflective of what some of our investors are interested in. Like, I think it really comes down to how are you helping the core operations of an insurance carrier or an M G A or a broker. Cuz that’s, that’s really, and, and to me, what moves the needle, right? There is a lot of, of solutions that are really interesting and companies doing really cool things that are helpful but aren’t really solving for one of those two things. And those are the two things that at the end of the day, an insurance care will always care about. And
JN: So, yeah. Yeah, I agree. And, and I guess on the underwriting side as well you know, but thinking about both sides of the coin, I, the, the more insight, you know, and I guess this is what we’re trying to do, at the end of the day, the more insight the underwriters, you know, all these insurance carriers have, the better they can accurately price, right? Risk, and then on the, you know, therefore customers get a more accurate, true reflection of the underlying risk too. So I, you know, so you, it’s not just on the, on the, the claims payout to make sure they’re look, they’re well looked after, but also in terms of what they’re paying upfront you know, prior to any of that is is obviously important for everyone as well.
CW: That’s great. Jay, I wanna, I wanna wrap this up with one more question. You mentioned that one of the things startups should be thinking about entrepreneurs should be thinking about is just get your documents in order. Don’t make it hard to find out what’s true about you. What other pieces of advice would you give to companies in that B range? That’re looking to be funded by someone like Q B E?
JN: Yeah, I, I think, look, going back to the strategic case you know, we, we are, we are a strategic C B C. And so the relevance to qb and, and sort of how QB can help an investment in, in the company benefit QB and the startup beyond just capital investment is really important. So I guess we, we look to these companies to help build up the strategic case and think about specific use cases with Q B E you know, like what business units are you looking to work with? Are you open to international expansion? You know, how flexible are you in sort of co building a, a product or your platform? I think thinking about this upfront, and I, I know I, I know I spoke about this before, but I would sort of echo that, that’s quite important.
Otherwise just, I guess in terms of the pitch or presentation I feel like, you know, a lot of companies sort of forget that we’re not like you, we we’re not looking at this company working on it every single day. We’re hearing about this for the first time. So sometimes just to sort of dumb it down and, and, you know, walk through clearly what your product actually does, you know, from start to finish with an example, how, how do you make money? You know, are you charging a SAS fee, <laugh>, are you, is it on a report basis, you know, volume, usage basis. You know, I I find just sort of dumbing it down and, and providing sort of clear context and background upfront is always helpful. But you know, there’s all the buzzwords they come in with sort of gen AI data centric platform and you’re just like you know, <laugh>,
MG: I, I would echo that cuz like a lot of times the, the first, the first conversation, right, or the introduction that like on the VC side we have with the company is like 30 minutes, right? Right. And like, the worst thing that can happen is you end that 30 minute call and you’re like, I have no idea what they do. Or like how, how they do it, right? Like how, what’s the, what’s the benefit? What’s the value proposition that, that they’re solving for? And so like I, yeah, like use that 30 minutes to just very clearly say, this is the problem we’re trying to solve. This is the, if it’s a tech, you know, this is the technology we’re bringing in order to do it, this is why we think we’re different. You know, and then if you’ve to, to Jay and, and Kristy, your question, if you’re at that series A, series B where you’ve got that product market fit, you’ve got some, some customer wins under your belt, like talking about those specific use cases. Yeah, cuz cuz the goal, right, is to, to help help the insurance industry move forward. So we wanna know how you’re, how you’re trying to do that <laugh> by the end of the
CW: My Phd advisor used to say, work hard to make it look simple. And I think that principle applies here as well as to theoretical physics. Yeah,
MG: I like that. Yeah.
JN: The, the only other piece I would add to that, just quickly you know, on the sort of people side of things you know, you are really investing in someone, right? A founder and their story and their mission. And it, and it could be a long-term relationship. So I think sh I think sort of honesty and upfront is always important, especially around sort of projections you know, numbers, pipeline revenue I think sort of just being honest and setting realistic expectations upfront and even being candid about where you’re having some sort of difficulties or you know, what are some of the problems you’re facing can, isn’t necessarily a bad thing as well. So yeah, I would just echo that as well.
CW: Amazing. It’s good to get some of that inside baseball. All right, well this has been another episode of Unstructured Unlocked. I have been your co-host, Chris Wells, joined by co-host Michelle. And our guest today has been Jay Novice and investment associate at QBE Ventures. Jay, thank you so much.
JN: Thanks for having me.
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