Liz Green:

Good morning, good afternoon and good evening everybody. Welcome to another ICMIF webinar. My name’s Liz Green and I will be your moderator today. Our wonderful panelists and speakers today will be focusing on our topic that I know is close to many of your hearts, helping you to navigate your InsurTech journey. We know this is a big issue for our members at the moment. We know that you’re all thinking about how you will be navigating this journey, and we know that you’re looking for the top quality advice from people that you trust. We’re thrilled to be able to meet that requirement today in the shape of our presenters.

We have Stephanie and Ben from Portag3 Ventures. We’re very delighted as well to welcome Louis from Beneva in Canada, who’s one of our ICMIF members. Together they’re going to help you to explore this probably uncharted ground for many of you. Maybe for some of you, you’re halfway through it yourselves. You’re in very safe hands. I’m going to hand you over to Ben, who’s going to take us through that journey. Over to you, Ben, and thanks again.

Ben Harrison:

Great. Thank you Liz. Hi everyone. Ben Harrison from Portag3. First off, I’d like to thank all of you for joining us today. I’d also obliviously like to thank the ICMIF organization for providing us this opportunity and the cooperators, who I know are icmif members and partners of ours, who actually helped make the initial introduction to the ICMIF team. Thank you to all.

As Liz mentioned, the session today is entitled, “Helping Navigate your InsurTech Journey”. I think that helps to nicely illustrate the purpose of today’s session, which is to showcase how partnerships with venture capital funds can help to develop, execute and accelerate some of your own InsurTech business strategies.

The goals for today’s session really are twofold. One, give you some perspective on what we’re seeing in the InsurTech space. The trends, the challenges, the opportunities, and in particular the segments and spaces that we’re looking to invest in. That sort of helps to give you the lay of the land. The second part of the presentation today will focus on how can venture capital funds help to navigate those challenges? Through, be it partnership opportunities or through the insights that we share. We’ll finish the session also with a short Q&A with Louis Régimbal from Beneva, an ICMIF member, to talk about his organization’s experience with working with venture capital funds.

If we go to the next slide, very quickly, here’s how we’ll run the session. I’ll do a very quick intro on Portag3, just so there’s some context. I’ll have my colleague, Stephanie Choo, who’s a partner and leads our investment team, talk about the views we have and the opportunities we see within the broader fintech space. Then we’ll look more specifically at what’s going on today in the market, and then really dig into the InsurTech insights and theses that we have.

From there, again, I’ll touch on a bit of the way that venture capital funds can work with investors and corporate partners. Then we’ll finish with an initial Q&A. Then hopefully we’ll have some Q&A from the audience as we go along.

Portag3 is an early stage, global fintech investor. Our primary investment geographies are North America and Western Europe. Our investors are predominantly financial services companies. That may include insurance companies, it would include banks and wealth and asset managers as a whole. You’ll see here some of the stats about the group in terms of geographies and countries we invest in.

A couple of maybe quick comments on some differentiating points and what we think makes us unique in the space. One is a global perspective. We’ve got partners around the world who can use that perch to see the different trends that are playing out in different markets, and then use those insights to help inform first and foremost our investment strategies, but also to help inform the insights that we’re able to provide our corporate investors. As Steph will showcase, we take a very thesis driven approach. We’re not waiting by the phone for it to ring to find the next company we invest in. We’re doing our research and homework, we’re really trying to understand the opportunities within specific segments, and I’ll touch on very briefly the verticals that we do invest in, insurance being a core one. We do that up front work to identify those opportunities and then aggressively go out and find the best companies in those spaces.

Then what is also a key differentiator is just the network of ecosystem partners, portfolio companies, investors, financial services companies that we can work with to help drive the overall partnerships that we’re able to put in a place. That’s a very brief introduction. I’ll also say we are in market right now raising our third fund. We’re going to keep the sales pitch here to a minimum. Really this is about helping to share insights with this group, but wanted to just, in the interest of full disclosure, mention that.

In terms of areas of focus to help put this into context, there are three main verticals we invest in, insurance being a core one. Again, this is what Stephanie will be talking about today in terms of the opportunities we see there. In addition to insurance, we also look at the banking, so consumer and SME finance space, wealth and asset management. Then we have a sort of foundational technology enabling layer, where things like tech, AI, aggregation, some of these supporting capabilities in technology that feed into the three core verticals that we invest in, is another focus for us. That’s a really quick background on Portag3, just so we’ve got the context. I’m now going to pass things over to Stephanie, who will start to walk you through our views on the fintech space as a whole, and then really dig into the insurance opportunities that we see today. Steph, over to you.

Stephanie Choo:

Excellent. Thanks Ben. Maybe what we’ll do is we’ve got, just to set the stage, we’ve got a few themes here that I think cut across the whole world of fintech and InsurTech that we invest in, that I think will be definitely familiar to anybody who’s run a digital transformation. These are certainly all applicable in insurance as well.

We are seeing four kind of very important trends, which I won’t belabor, but will tie into where we think the insurance world is going. The first is a real focus on the customer. When we say on the customer, we really mean that people want to be buying things in context where they are today, and they’re going to expect the same kind of experience that they receive in the rest of their lives in consumer tech from all of their financial services endpoints. There’s really this shift to being consumer versus product focused.

The second kind of key trend that we’re following closely is what we call the great rebundling, which is the fintech 1.0 trend, or the InsurTech 1.0 trend was really about point solutions and providing better point solutions. We’re now seeing, which I can talk about more, a rebundling of these point solutions back into full suite financial services products. We’re seeing that in insurance as well, with folks like Lemonade kind of rebundling home, auto and life together. I’ll also talk about that trend.

Finally, two other kind of trends, which we can talk about in context of insurance as well. The third is the API-ization of everything. The idea that there’s a whole new generation of infrastructure that allows for fintech and insurance experiences to be embedded in context via API. Again, the technology for this I would say has really only existed over the last five years to enable more in context experiences, where you can have, for example, quote and bind technology that is fully automated from an infrastructure perspective.

Then finally, all of this would not be possible without the ability to look at data. This last trend is really about the availability of a lot more data specifically on customers that allow for very specific targeting of products to specific segments. The quality and quantity of data has never been more important.

Maybe I’ll just touch on really what we’re seeing in the market today, which is a massive acceleration, that’s been caused by COVID, in technology across the fintech sector. In terms of valuations, I think, what we’ve really seen is high valuations in the public markets for anything to do with InsurTech and fintech, which has really trickled down to very high valuations in the private markets as well, across all stages of ventures.

We’re a venture fund that invests seed all the way to series B. The last year has seen a fundamental shift and tailwind in terms of the number of consumers that have moved to digital alternatives. Not only are we seeing really high public markets valuations, but we’re actually seeing this underpinned by extremely strong growth, both from a user base perspective and from a revenue based perspective.

This question of how long kind of the music will last, and if we’re in a bubble, is something that we think a lot about as fintech investors. What I will say is fintechs and insurtechs are now some of the very largest companies in the world. You can see in every country. In the US you’ve got Robinhood and Stripe. In India and in Asia you’ve got Ant Financial and Paytm. There’s been this question, I think, of will valuations continue to sustain themselves? I think in the wider both public and private markets our perspective is they’ve actually been supported by commensurate growth that has been accelerated by COVID and the adoption of digital experiences in the financial services space.

The other trend that we’re seeing in the wider venture market when we think about funding, again, we’re seeing record valuations but we’re also seeing record liquidity options. We’ve seen the most dollars deployed, and the most dollars raised by venture funds in the last decade. We’re also seeing this new phenomenon, which is the opportunity for companies to go public at a much quicker time horizon via SPAC. We’re also seeing an explosion of M&A’s via large scale incumbents, but also large scaled platforms like Stripe, Square, Google, have been very inquisitive as well. We’re seeing the proliferation of M&A options as well.

Our perspective on this is really that these new valuations may actually be here to stay for some time. What it’s going to take … At the same time, I think we’re all cognizant that it is quite hard to call the top, but the amount of dry powder available that’s been raised by new venture funds that has yet to be deployed is still very high. The music stops we think when there’s some kind of exogenous shock that we can’t really predict yet. That could be kind of interest rates, it could be inflation. It’s something that we’re watching really closely.

The other thing that I think could impact, that is really baked into these very high public markets valuations, is what we describe as geo and cross sell and market expansion. This kind of goes to this point that I made earlier, which is one of the trends that we’re watching is the great rebundling of products to specific customer segments. We think growth could really hit a ceiling if cross sell opportunities don’t play out the way that kind of early indications show. Because I think all of these valuations are really predicated on companies rebundling various different products, insurance and non-insurance related, across the financial services spectrum to a specific customer. If companies don’t figure out either how to expand geographically and/or become successful at cross selling, that is when we think they’re going to hit their growth ceilings.

Focusing now specifically on the insurance world. This is, I think will be familiar to many of you, a breakdown of where we see innovation. I think the key point that we want to make here is that innovation is really happening across the spectrum here. Where before kind of insurance 1.0 was really about innovating on the customer experience specifically, but now what we’re seeing is really specific innovation across the value spectrum. From the broker world, from digital enabled brokers, all the way to digitally enabled MGAs, to full stack carriers, to new kinds of digital platforms that link reinsurers and other kinds of funding to … The ILS world, for instance, to MGAs. We’re seeing really interesting innovation across the value spectrum.

Maybe I’ll make a couple of other points here, which are, if we project out the world kind of 10 years from now to who we think the eventual winners are going to be, I think the eventual winners in the insurance space are going to be threefold. They’re going to be, one, scaled insurance plays that can use their scale advantage to drive cost efficiencies, to drive marketing and sales advertised over a larger premium base. I think these for us are the kinds of Progressives and Geicos of the world that just are operating at a very different scale than the rest of the market.

I think the second group of winners are going to be, in our thesis, digitally enabled or digital native insurance companies, some of which may exist today, some of which are probably going to be founded in the next five years. I think our fundamental belief, if we go to the next slide, is that technology can really help across the value chain. There is incremental benefit to be had across product development, marketing, sales, underwriting and pricing, and claims, that is going to drive really sustainable competitive advantage. The second set of winners are going to be digitally native insurtechs that are either digitally native insurtechs or incumbents that are able to successfully make the transition to incorporate technology across each of these points in the value chain. That’s kind of winner number two, or category of winner number two in the future.

Then the third category of winner that we think is going to exist if we look 10 years from now, are the specialty players. These are players that either use risk arbitrage in the asset management world and/or have very specialized data sets that are really difficult to replicate. If you think about these players, again, I think technology and data is really going to underpin their advantage and make it difficult for others to catch up.

We think if you project, again 10 years out, there’s going to be significant consolidation in the industry because you really probably don’t need, in a world where those are the three kinds of winners, there’s probably going to be consolidation. If you are not one of those players, I think it’s going to be a challenge to really grow and sustain yourself. Versus the kind of funding advantage, and the scale advantage, and the specialty data advantage that some of these players will have.

Across the value chain here I think the other point that I would want to make is the original, again, InsurTech thesis 1.0, was really focused on the front end kind of consumer facing, maybe marketing and sales focused piece of the value chain. We’re now seeing more and more interesting products, or more and more interesting innovation happen in product development with brand new kinds of products being released. We’re seeing more interesting underwriting and pricing with alternate data sources available, and we’re seeing more automated kind of claims functionality and innovation in the back of the house. This is all underpinned by the availability of new kinds of policy management and admin systems that cut across and really enable innovation across the value chain.

If we go, I’ve touched on some of these already, so I won’t go through them in too much detail. I think that there are four core main themes. One I think is really obvious, overarching theme, is insurance is no longer a walled garden. Really what we’re seeing is where previously there was this world of technology, and the world of technology was really quite separate from the world of insurance, which requires a kind of quite specific understanding and vocabulary, and it’s a very specific industry. I think we’re now seeing the walled garden fall, where we’re seeing a lot more technology entrepreneurs become interested in the insurance world and vice versa, which has really changed I think the rate of innovation in the insurance world. That’s kind of one of the core themes underpinning everything.

Just to talk more specifically about some trends that we’re seeing that we believe are interesting. The first is insurance really purchased in context. We’re seeing a number of different companies, such as a portfolio company of ours called Cover, which provide insurance as a service and partner with, again, large distribution platforms where consumers already sit. In Asia, this is Ant Financials of the world, this is the Grabs of the world, where there are big super apps. This is the Revoluts of the world. Where do customers already do either live on their phone already as consumers? This might be banking products. It might be super app driving products, ride sharing products.

The ability to use a set of APIs to then allow and offer insurance in context, we think is a trend that is really interesting, and it is one that carriers certainly can participate in as well. You need the technology, i.e., the policy management systems and the APIs, to really be able to service customer segments.

We also think these customer segments, again, are quite specific, and if you are going to offer an in flow purchasing experience, it has to be seamless and frictionless. It also has to be tailored, so the ability to offer really customized value propositions for each of these specific customer segments. Let’s say if you’re offering a commercial insurance product to Uber drivers, it’s might be UBI based, it might be custom developed for that segment. That I think is quite important.

The other interesting trend that we’re following is what we’re describing as the capital light model in which MGAs are now partnering directly with reinsurers to launch new insurance propositions. You now no longer necessarily need to have the balance sheet that you would have had as a full stack carrier to offer an insurance product. This means that you could be up and running in 12 to 18 months in many jurisdictions. Where it would have taken $100 million plus or more of capital to stand up a new product, we’re now seeing a number of new MGAs go out into market and launch relatively quickly with reinsurance partners of their choice.

This of course means that one of the big limiting factors, or bottlenecks in the industry, is actually both reinsurance and fronting capacity. We’re seeing this as a really interesting opportunity actually for those that do have this, it’s really a moat, is we’re now hearing that many MGAs are actually struggling to find, in certain categories, for instance cyber, fronting and reinsurance capacity. I think that’s why we’re seeing, we think that there is potentially an opportunity here for incumbents that have paper to offer this to new MGA programs, and/or we’re now seeing the reintegration, ironically, of MGAs who want to launch new products really by fronting carriers, like Hippo bought Spinnaker. Ultimately, I think the real trend is this capital light model, where we see MGAs partnering with reinsurance partners, but it’s actually created this relatively new bottleneck.

Then finally, none of this is possible without core insurance or core policy management systems that are modern. Much in the same way, again as I kind of talked about earlier, many incumbents kind of face this legacy technology issue of having a core insurance policy systems that aren’t particularly robust, that are monolithic. I think in order to really participate in the InsurTech world, you really need, at the core of everything you do, a scalable set of technology that allows you to manage your policies and really offer a new kind of product experience, a new kind of marketing experience. It allows you to onboard customers quickly, quote and bind quickly, and that’s really enabled by your core infrastructure. We’ve got a portfolio company in this space called Sokotra, that’s working actually both with new insurtechs, full stack carriers, but also incumbents that are making the transition to more modern technology.

Maybe I’ll give you, just to tie it all together, I think Lemonade is a great example of a full stack carrier here that incorporates a lot of the trends that we’re seeing. First and foremost, I think a lot of the criticism of Lemonade, so first of all it’s a P&C full stack carrier launched in the US. They’ve also most recently launched in Europe. They went public last year with a large IPO. They’re trading at valuations that many of you will not recognize from the insurance world, these are valuations of multiples of what a traditional incumbent carrier would trade at. They have I think really demonstrated that public markets investors have an appetite for the InsurTech story, and there aren’t that many names today that you can buy if you are bullish on the InsurTech sector, and Lemonade happens to be one of them.

I think that there’s a whole other set of questions about whether or not the valuation is justified or deserved given how small their book of business is and their premium actually is. I think there’s no denying that there will be a new generation of digital native insurers, and that right now public markets investors have really determined, or at least made the determination, that the incremental advantage that they have built across the value chain, across each of the pieces of the value chain, from a technology perspective, and their culture and ability to innovate is a differentiating advantage. It’s being reflected in their valuations.

I think they’re a great example of a company that, again, has innovated both in providing excellent customer experience, but also from a claims perspective, and also in the way that they use technology to quickly get a rate and offer new products. They’re also about to, their new kind of annual reports say that they’re about to again try to cross sell and re-bundle products here, where they’ve moved from the P&C world and they’re about to move into the life and health world as well. They’re really focused on this new generation of kind of younger customers and developing new interesting products specifically for that customer segment. They also have a set of APIs that are embedded into and partnered with other scaled platforms in order to distribute their product. They’re both a B to C and a B to B to C product, and I think they exemplify a lot of the trends that I’ve talked about today.

Maybe I’ll hand it back to Ben.

Ben Harrison:

Great. Thank you Steph. Coming back to the theme of the session, helping navigate the InsurTech journey, it’s hard to navigate the landscape if you don’t know what that landscape looks like today, but I’d say even more importantly where it’s going. The insights and perspectives that Steph has just shared I think helps to provide some of that perspective.

The next question then becomes, how can venture capital funds help, or what role can they play in navigating that journey? The way that we think about this piece is really twofold. In order to be a strategic enabler for the investors you work with, there are two core areas that we see venture capital funds well placed to support organizational strategies and plans. One is helping to facilitate partnerships between portfolio companies and investors, where the solutions of the portfolio companies address the particular opportunity or challenge that an investor has. Those types of partnerships really help to accelerate those plans, where you’ve got the right alignment and right resources available.

Then the other component, as we’ve just spent the last 20, 25 minutes talking about, are the insights. Providing not just perspective on what’s going on in the market and what are some of the really big trends, but also trying to provide that insight and information in a way that helps inform the actual business strategies of an investor. Providing that in a way that helps to think through decision making around potentially new products and services, new technology decisions that are being made, or in some cases, for some investors, investments that they want to make themselves in this space.

One of the key components to the partnership piece, so I’ll just take a couple of minutes to go into each of these partnership and insights sections. Our view has always been, and my background is actually leading an innovation practice at a large Canadian insurance company before joining Portag3, and so I’ve lived the challenge of trying to connect a big company with a small company. I’d say while there’s no secret ingredient to making that work, or a silver bullet, the key we’ve identified is just having a good process in place to manage these relationships, starting with identifying the opportunity from the perspective of the investor. Then always working towards getting to the next solution, or the next decision rather. Be it this isn’t a fit for either organization, or let’s continue to figure out what the opportunity is here. Having a good process is actually, in our view, critically important to making this piece of the partnership relationship work.

Along those lines, and for those on the call who may be interested, we’ve actually consolidated and collected all of our thoughts on process, best practice, learnings, all of those things as it relates to identifying and facilitating these types of partnerships. We put together, probably about a year ago, a partnership playbook that we’d be happy to share with anyone on the line who’s interested. We can share a copy of that with the folks at icmif, or feel free to reach out to me directly. This is a resource guide that, again, shares the learnings and mainly scars and lessons learned from trying to create these partnerships and identify the best ways for both the investor, for the corporate, and for the portfolio company to identify the real opportunities here.

The other really important, and maybe in some cases even more important than some of the partnerships, are the insights that a venture capital fund is well placed to provide to the organizations it works with. Both at a macro level, in terms of big trends, big shifts in the market that we’re seeing and areas that venture capital funds are interested in investing in, that in and of itself signals both opportunity and potentially challenge, depending on the type of business. More than that, the opportunity to really understand a corporation’s areas of focus and priorities, and then where possible provide insight into those specific categories or projects, where they align with some of the thesis work that a venture capital fund might be doing, are also really great ways to help accelerate some of the internal thinking. This is an area that we as an organization, leveraging folks like Stephanie and her team, try and really help support our partners.

A perfect segue and timing. What we thought would be helpful is actually to take a few minutes with someone that just so happens to be both a member of ICMIF and a partner of Portag3, really to try and understand and get some insight into their perspective on why invest in venture capital as a business strategy. I’m honored to have Louis Régimbal from Beneva join us today for a short Q&A. Maybe Louis, let’s start with the basics. Beneva is I believe a new member to the icmif organization, so there may be some folks on the line not familiar with your group. Could you just do a quick background on Beneva, its history, and then specifically your role there?

Louis Régimbal:

Sure Ben. Thank you, and thank you for the invitation. Thank you to ICMIF and to Portag3 for the opportunity to come and share our experience with the group. In some ways Beneva is both a new and an old member of ICMIF because Beneva is really the merger of SSQ Insurance and La Capitale, so two well established multi-line carriers based in Canada. SSQ Insurance had been a member of ICMIF previously and had to, for all kinds of reasons, lapsed membership, but now we’re very excited about being back, and so we are both old and new at the same time.

Beneva, we like to think of ourselves as being the largest mutualist insurance company in Canada. We are present basically in three lines of business, which is unique, not that many carriers are present simultaneously in property, casualty, group life and health, as well as individual insurance and some savings products as well. It’s a broad range of the services. Today we have over $5 billion in direct written premium. Over and above that obviously some deposits in terms of assets on the savings side, and about 5,000 employees in the organization. We are just now rolling out the new name nationally, and so hopefully in time people will become more and more familiar with the Beneva brand.

As far as my role within the entity, the organization, my title is Vice President of Strategy and Innovation. What that really means is that I lead the team that’s responsible for developing or executing the strategic planning exercise, so that’s both the process and a lot of the content and thinking that goes into the process itself. It’s a collaborative process across the organization, so we do contribute directly to the thinking, but we manage a broader process.

The other component is really around the innovation mandate, and that’s really where I like to say that we set the tone internally. Innovation is not an exclusive responsibility within the organization, we think that it has to be a shared responsibility, so in our minds we set the tone and enable the organization to think more innovatively in terms of how we’re going to do that.

Ben Harrison:

Perfect. That very nicely sets the stage. Given where you are in the organization, Louis, would love to understand a bit of your perspective on why Beneva has taken the approach to invest in venture capital, different venture capital funds.

Louis Régimbal:

I think that from our perspective, everyone’s answers as to why they might want to consider these kinds of investments are probably different. Just maybe to set the stage, we are present in three different funds, so Portag3 being one of them. Two other funds, one is more of a global fund and one is more of a local fund in Canada. Primary reasons for us to invest in these funds are what we call strategic. I mean, obviously strong returns are something that we are excited about, but the primary reason why we decided to invest in some of these funds was for strategic reasons. I really think of it on three different levels.

First of all, there’s what I like to call the line of sight on the future. A lot of what Steph shared in terms of the Portag3’s thinking about where the market’s going and how things are evolving, and the different players, and newer players and some incumbents are adapting. That’s obviously something we’re very interested in learning an additional perspective on that point of view.

There’s also what I call sort of the inside track with some innovative players. Obviously as a result of the relationship with Portag3 and other funds, we get to have very unique conversations and relationships with some of the more players that are out there exploring the boundaries a little bit of the markets in which we operate. Of course, the advantage of Portag3, for example, and at least one of the other funds that we’re in, is that they have a global footprint. Be it, Steph was talking about the CLARK that may be based in Germany, but we’ve had multiple conversations with CLARK over the years to understand a little bit where the model is going. Allen, that may be based in France, but where through a contact with Portag3 we were able to have a very detailed understanding of how Allen was put together and how it looks at the market. These are really unique opportunities to understand what some of the clearly more interesting players are doing.

Obviously the other thing is what I call an extensive network of like minded carriers. Portag3 as a result, and some of the other carriers or other funds and opportunities that we have, obviously bring together a lot of players that are a little bit like us, and so we have opportunity to dialogue and network with a number of these players. We think of those as being the primary sources of benefit for our involvement in a fund like Portag3.

Ben Harrison:

Great. Maybe could you provide some examples, Louis, of partnerships, insights, the Beneva has been able to capitalize on to accelerate and drive forward some of your own strategies and plans through these relationships?

Louis Régimbal:

Sure. If we think about sort of what we’d call maybe loosely success stories or examples where we’ve really been able to leverage some of these relationships, the one opportunity that comes to mind that is often cited is our relationship with a telemedicine provider by the name of Dialogue. Initially the interesting story here is that Dialogue, which was basically curated by Portag3, or by one of the groups within Portag3, was introduced to us sort of on spec. Not necessarily something we’d initially been looking for, but the obvious fit between sort of our group benefits play within and the fact that the telemedicine in Canada in particular was somewhat underdeveloped as compared to many other jurisdictions around the world. There was obviously a click that was instant for us, and so we were very proud to say that we were one of the first two carriers in Canada to introduce a telemedicine service within our offering. Honestly, it was because some of it was brought to our attention by Portag3.

I mean, we’ve had multiple conversations with the group that curates these opportunities within Portag3, a group by the name of Diagram. A lot of these different types of opportunities have been introduced to us and we’ve been able to in some cases it’s made sense for us to move forward, based on some of the comments Steph made earlier around alignment and so on. In some cases we’ve chosen not to, but it’s certainly opened our eyes to a whole bunch of opportunities that otherwise I think would not have necessarily been obvious to us.

Ben Harrison:

Yeah. That’s an important point, that idea of actually triggering some thinking. That access to both the insights and potential partnership opportunities, not just to reinforce existing strategies, but in fact to help identify new opportunities that maybe the group wasn’t thinking about. I think that’s a important point to highlight.

Maybe just to take us to the end, any thoughts you would share with the audience, folks that might be either leveraging venture fund partnerships today or thinking about it? Any thoughts that you would want to impart, lessons learned, best practices to really maximize the value of those relationships?

Louis Régimbal:

Sure. I mean, I think that in terms of, when we think about the VC funds or similar type players, be they incubators or accelerators, which are broadly in the same category, one of the things that we see is that they will curate organizations at different stages of their development. I think it’s very important if you’re looking to set up a relationship with some of these players that you understand a little bit how they play in the industry and where some of the opportunities that they’re going to bring or be able to offer you. For example, in Montreal there’s an organization called Holt, which is an accelerator that has been able to bring to within its hold organizations from around the world really into its accelerator model. A door onto the rest of the world as well as sort of some of the opportunities that are local. It’s important to think about what kind of organization you may want to partner with and on what basis, because they do often bring different types of benefits.

The other thing is that it has to be aligned obviously with your own view in terms of how you think about innovation or how you want to develop the organization. From our perspective, our innovation strategy is really centered on partnering, and partnering with what we’d like to think are best in class players. As opposed to where a lot of carriers in the past may have been thinking more about home grown solutions or trying to develop a lot of these types of offerings internally, for us it was explicit from the beginning, given our relative size in the market, that partnering was key. From our perspective, the access to the folks within the Portag3 or other type funds has really allowed us to move forward on that partnering approach. That’s really something that’s been extremely key for us.

When we think about partnering, one of the things that I think that Steph may have highlighted initially is what initially the fintech world was, I think most of the incumbents were concerned that they were coming to replace them, to some extent, or take away some of the customer relationships. In the insurtech space one of the things that’s been I think a hallmark of how a lot of the players have developed is they’re really there in order to contribute to the overall success of the industry, helping many of the incumbent players like us. For us, we really need to capitalize on that kind of thinking and make sure that we give ourselves the best chance to succeed going forward.

Ben Harrison:

Excellent. Any other final thoughts, Louis?

Louis Régimbal:

Not specific. I mean, again, we’re very pleased with our relationship with Portag3 and with the other VC funds where we’re present. We’re looking forward to continue moving forward with these relationships.

Ben Harrison:

Excellent. Well, thank you for providing some of that perspective. I think we can talk to PowerPoint slides all we want, but to get some first hand insight from someone leading the charge around innovation and partnerships, and again how you and your group are working with different VCs I think is really helpful context for this discussion.

What that, that brings us to the end of our journey, if I continue on with the theme. Thank you again to the ICMIF group. Thank you to Louis and Steph, and for all those that have joined us. If anyone is looking for more information about Portag3, we’ve got my contact information here. Again, that partnership playbook, if you think that’s something that you’d be interested in receiving a copy of, please don’t hesitate to reach out to either myself or to the good folks at ICMIF. Liz, that concludes the session. I don’t know if we have any questions from the audience that we want to go to.

Liz Green:

Great. Ben and Louis, absolutely wonderful presentation, and thank you also to Steph. We have questions and we have a little bit of time, so I’m going to get straight to it. Our first question says, “Do you see insurtech companies jumping from enablers for the insurance carriers to actually being risk carriers themselves, or will they generally stay as digital outsources?”

Stephanie Choo:

I’ll start and then you guys. I think we’re already seeing, again, the first generation of full stack carriers emerge. We’ve invested in a few of them ourselves. A company called Allen, which is a full stack digital carrier in France. Confidentially, we’ve invested in a second one that will be announced shortly, also in France. We’ve got wefox in Germany. You’ve got Lemonade. You’ve got Hippo. You’ve got Metromile. You’ve got Root. Absolutely we’re seeing new digitally enabled full stack carriers that also take risk.

I would say they also have a diversified panel of reinsurers that they’re working with, like everybody else does, but certainly we’re seeing I think the emergence of kind of new full stack carriers that are taking balance sheet risk, at least some portion of balance sheet risk. I think it will be a question, I think most of them did that because they couldn’t move quickly enough if they partnered with other carriers, but I think the route to market generally is take no risk and then eventually prove, get enough data that you can then move to being a full stack model.

I actually really question if that actually makes sense going forward, and whether or not some of these new carriers will realize that actually managing risk is a lot harder than they thought, and maybe they should have … I think there will be some who regret, and I actually do wonder if they’re better placed just staying at the MGA level and reinsuring away all of the risk and staying capital light. Certainly I think there already have been a number of carriers that have taken this route, and I think there will be others that continue to do this, but I’m not sure that it actually makes sense or is the best path for some of these companies.

Ben Harrison:

Maybe Steph I would just, as a carrier, one of the things that we can’t help but be a little bit concerned about, and all the other folks on the call that have the same view, is that it’s one thing for the insurtechs to kind of be interested in the same market we are. It’s another thing for the reinsurance companies to kind of start stepping in and playing a role that a carrier might typically play in terms of fronting risk. We’re obviously, well let’s just say that we’ve had lots of conversations with our reinsurance partners around definition and market presence, and so that may play into the trend in the long term as well.

Liz Green:

That’s brilliant, guys. Thanks so much for giving such a thorough response. I’ve got quite a few to get through here so I’m going to crack on with the next one, which is directly for you, Louis. How do you see your VC partnership supporting your mutual value proposition at Beneva?

Louis Régimbal:

I mean, it’s clear that from our perspective there are a few things that are, from the members’ point of view, we’re looking for a superior experience. We’re looking for, in the new strategic plan that we’re coming out, the notion of simplification, or simple relationships, or simplifying the interactions, or simplifying the life of our members as a key theme that’s going to be embedded in what we’re doing. Relationships with some of these innovative players, they’re really supporting this notion of how do we deliver a simple, efficient service to our members and allow them to get on with their lives as easily as possible? We see it very consistent with what we’re trying to do as a mutual player on the member experience component.

Liz Green:

Thanks so much, Louis. That’s a really great answer to a really great question. Thanks for whoever’s put that through. I think we’ve got time for one more just before I close off and talk a bit more promotion about some more webinars that we have. Steph before mentioned about Lemonade, and it always comes up on one of these presentations. People are so fascinated. I’m curious, do you think that the current public market valuations of insurtech that are currently IPO-ed, like Lemonade for example, are sustainable?

Stephanie Choo:

Yeah. I kind of touched on this in the presentation. It kind of depends on the time horizon that you describe or that you want to look at. I think in the short term I think investor appetite for these kinds of insurtech public market stories don’t seem to be diminishing at any point, but I think there may be an overall market correction. That could impact things, and there’s still a lot of the story that hasn’t yet been played out in terms of loss ratios, and geographic expansion, and cross sell, that all are already factored into each of these valuations, and if they don’t play out exactly as planned, you could see an impact. You’re already seeing that with companies like Root, which are trading far below their IPO value. I think some of them will be, but the story’s still to be played out.

Liz Green:

Understood. Well, thank you so much. I’m afraid we’re actually out of time. Don’t worry ladies and gentlemen because, as Ben mentioned in his presentation, there is this wonderful partnerships playbook resource, which we can circulate to you on request. ICMIF’s here to connect you to any of the speakers on today’s presentation, so please get in touch if you have more questions that you’d like us to put through. I’m sure all of both Ben, and Louis, and Steph will be delighted to carry on the conversation. I just want to take this opportunity to thank the three of you.

Big thank you to everyone who’s participated. Have a wonderful day, and stay safe, and we’ll see you on the next webinar.

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