How technology will disrupt the insurance industry – a founder’s perspective from the CEO of Cytora Richard Hartley

By October 25, 2019 News

Cytora transforms underwriting for commercial insurance. The Cytora platform enables insurers of any size to underwrite more accurately, enhance efficiency, and deliver better experiences to customers. Cytora’s technology powers underwriting for some of the world’s most advanced insurers and MGA’s including AXA XL, QBE and Convex. The company has secured over $40M funding from EQT Ventures, Cambridge Innovation Capital and other investors

We’ve spoken with the CEO of Cytora Richard Hartley in preparation for his upcoming presentation at NOAH London

How was the idea of starting up Cytora born and what was your main driving factor? 

Insurance is an economic necessity, and we feel strongly that insurance should be data-driven, efficient, and fairly priced for businesses. We believe that risk transfer – moving risk from one party to another – should be as easy and as data-driven as financial trading.

We recognised that today, this isn’t the case, especially in commercial insurance. Underwriting decisions are made using sparse and outdated information, and the entire process is antiquated and manual. Both insurers and consumers lose because operating costs are unnecessarily high and the customer experience isn’t good which leads to a lack of trust.

Cytora was born out of the belief that the proliferation of data coupled with machine intelligence presented an opportunity to solve this problem. We want to help insurance companies on their journey to become technology companies. 

Fast forward to 2019 and some of the world’s leading insurers are using our platform to automate their underwriting processes. One of our customers has been able to distill their seven day underwriting process down to 60 seconds using our platform. We are building a world where risk transfer is effortless and fair, transforming the world of commercial insurance.  

As a founder, can you share a story when you almost gave up but pushed forward?

I believe courage is critical for success, so for me giving up was never an option. We’ve been through moments where our future path wasn’t clear, such as when figuring out which industry vertical to focus on, but we had the willpower to make good and fast choices based on a combination of intuition and data. 

Underwriting decisions are made using sparse and outdated information, and the entire process is antiquated and manual. We want to help insurance companies on their journey to become technology companies

What was the easiest and the most difficult moment in getting funding? What came to you as a surprise? 

Seed rounds were most straightforward for us and tend to be easiest as there is more capital available. Getting funding is never a simple process though. It’s important to take a holistic view, looking closely at the firm, the partner relationship as well as the strategic value add and follow on potential. 

What kind of potential partners are you looking for at NOAH and what are your criteria for an ideal partnership?

Partnerships are key in insurance as participants in the industry have historically not been successful in developing technology and launching digital propositions. We look selectively at partnerships where we can have a clear long term strategic impact, and where the partner’s long term ambitions are aligned with our core competency and future roadmap.

With automation in the insurance industry, the role of the underwriter will change to focus more on complex risk-assessment, relationship building, and developing new products for customers that are more granularly defined and segmented

How do you think InsurTech will disrupt the insurance industry in the next 5-10 years?

With access to new technology and data, underwriting will become completely programmatic for small to mid-market risks, and pricing decisions will be instantaneous. As a result of this, frictional costs for insurers will decrease, enabling them to pass savings on to the end customer.

At the larger end of the market, underwriting will remain human-driven and key parts of the process will be automated, such as data entry and information retrieval.

The role of the underwriter will change to focus more on complex risk-assessment, relationship building, and developing new products for customers that are more granularly defined and segmented.

Once programmatic, underwriting will be embedded into multiple distribution interfaces which will disrupt the current operating model. For business owners, this means they will have effortless access to fairly priced insurance whenever they need it. Insurance pricing will be driven by comprehensive and contextualised data, avoiding biases and discrimination.

The economic model will also change with insurers been able to realise the original promise of cloud computing: variable costs. We think this will have a meaningful impact on underwriting and increase overall liquidity, allowing insurers to enter and exit lines faster than before.  

It will be your first time at NOAH Conference this year and we look forward to welcoming you! What do you most looking forward to at the upcoming NOAH London? Why did you decide to attend NOAH in the first place? 

The high calibre of delegates and speakers at this year’s conference make NOAH London a really exciting place to be, and I’m looking forward to sharing the stage with a host of talented individuals driving innovation across a variety of industries. 

Taking up the opportunity for a fireside chat with Tom Mendoza from EQT Ventures, the VC that led our series B of £25M back in April this year, was a no brainer too. We’re really proud of what we’ve achieved in recent months and years, so can’t wait to share our learnings with some of the world’s most successful innovators and investors. 

Book your ticket now to watch Cytora’s presentation live on 30 October at NOAH London 19 (see the details in our program).