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In Conversation with Andrew Robinson

By Tricia Kemp, General Partner, Oak HC/FT
 

What is an Executive in Residence?

As the first Executive in Residence (EIR) at Oak HC/FT, my role will be to develop new insurance tech businesses through a combination of building from scratch and investing in early- and growth-stage companies. The role would evolve into me overseeing one of the new companies on an operating basis.

 

What attracted you to the opportunity to work with Oak HC/FT?

The Oak HC/FT team, first and foremost. Besides having a terrific track record in the industry, they’re wonderful people; very smart and down to earth, which makes for a dynamic working environment.

We also share a view on big opportunities within the insurance tech space and a common philosophy around how to pursue those opportunities. My background and Oak HC/FT’s deep capabilities and insurance tech expertise make for a powerful combination. I am confident we will pursue some big ideas together.

 

What are you most excited to do in your role as Oak HC/FT’s first EIR?

While the Oak HC/FT team has already made smart investments in insurance tech, there are many more attractive opportunities to pursue. Within the US property and casualty market, for example, carriers have only returned cost of capital in aggregate once over the last 12 years. Products remain extremely complex to understand—even to a sophisticated corporate buyer—and efficiency gains and improvements in reducing loss costs over the past 10 years have done very little to reduce end-customer cost. Services and service quality are generally poor when measured against nearly any other industry of comparable size.

The opportunity to build a business that meaningfully addresses these factors is what gives me and the team at Oak HC/FT a lot of energy and excitement.

 

What are some of the initiatives you will be focusing on at Oak HC/FT?

We see abundant opportunities across the entire value chain: how capital is sourced for a specific risk type; how products are constructed; how risk is selected and priced; and how loss events are managed and adjudicated. While we don’t want to be specific on the core ideas, using commercial lines as an example, it is easy to envisage how new categories of data can be harnessed in combination with new approaches that better leverage existing information for competitive advantage. This concept cuts across nearly all product lines and risk types and will be central to product construction, driving down loss costs, and improving risk selection and pricing.

 

How have you leveraged your corporate experience and background in your entrepreneurial roles?

I am passionate about working with entrepreneurs and have years of experience serving on the boards of VC-back insurance tech companies. I can leverage my corporate experience within the VC community to add credibility, context, and perspective around the power of the ideas of each of these companies. My understanding of the insurance market and where and how value is created (or destroyed) is often helpful to the design of the solutions these early-stage companies are creating. I have also been a cheerleader and door-opener for business development and relationship building with carriers, brokers, and service providers.

 

You have strong experience in both financial services and insurance. Compared with other financial services, do you think insurance has been slower to innovate and digitize?

Yes and no. The insurance industry is composed of many smaller markets, so you need to look at them independently. Commercial insurance accounts for about half of the industry, and it is more akin to commercial banking, which has been slow to innovate, as well. But if you look at other segments—such as personal auto insurance, which is more consumer-driven—you would find more evidence of innovation. For example, a company like Progressive has been innovative on pricing, customer experience, and, recently, telematics, where they have been leading the way in product design and driving adoption. So, I don’t think you can paint the industry with broad brush strokes.

That said, there are a handful of challenges that have hampered the speed of innovation and digitization. The US insurance market is regulated at the state level, making changes costlier and more time consuming. International insurers have also been focused on Solvency II compliance over the past several years, which has been an intense process and consumed resources that otherwise might have been deployed toward innovation.

Talent is another root cause. Historically, the industry has not been perceived as “cool” by the next generation “A” talent, and the industry hasn’t paid for top tech talent like many banks and other industries have.

Lastly, the commercial insurance industry is unique in that prices are effectively “set at the checkout line” yet the cost of goods sold (COGS) isn’t known until a future point in time. The combination of these factors makes innovation a challenge but also an attractive opportunity for the future.

 

What do you think will be the biggest upcoming trends in insurance tech?

Big data, artificial intelligence, robotic process automation, blockchain, and chat-bot technologies will all have an important role in shaping the insurance industry’s future. I think the sharing and gig economy will also play an important role in enabling development of new products and markets, and attracting talent to the industry.

One specific area is sensor technology, which could have a profound impact and accelerate the elimination of some categories of risk and the creation of others. These changes will impact every step of the value chain.

 

You’ve worked extensively overseas. Are there any notable lessons or experiences you’ve carried back with you?

Whether they are in London, Mumbai, or Chicago, many early-stage, emerging and growth technology companies share a similar ethos, determination, and frequently, values. That’s unique to the entrepreneurial mindset and start-up culture, which makes working across borders relatively easier than what you might experience within an older, established company.

Specific to the insurance industry, the London market, where I spent many years, demonstrates that concentration of talent can make a huge difference to building real expertise and distinguishing a market. While technology has the potential to make talent concentration less relevant, I would not underestimate this historical advantage and how this concentration of talent may be foundational to innovation.

 

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