RiskMatch – connecting the disconnected world of commercial insurance

By Rick Huckstep

As understatements go, saying that the US insurance market is a big market is up there with the best of them! It’s around $1trillion in size with the market split roughly 50:50 between commercial and personal.

Let’s pick the commercial insurance market and look a little closer.

Here we see a market of 35,000 brokers placing business for 300 plus products with over 15,000 carriers. Brokers still account for 95% of all commercial insurance placed in the US, representing over 10+ million insured and over 200+ million policies.

Commercial insurance is a big market and these are big numbers!

And yet, for such a large and complex market, the way in which business is handled is remarkably inefficient and opaque. Joining the dots to connect the risk with an underwriter still depends on a world of personal relationships and gut instinct. It’s a game of hit and miss for the brokers to find a carrier who will cover the risk they are looking to place.

For example, a client is looking for terrorism cover. You’d think that is straightforward and the broker can go call on the carrier that specializes in this product. When the broker approaches the carrier they find that whilst they write terrorism cover for the US, they exclude any risks in NYC! That’s a wasted call and as many as 60% of broker enquiries are declined or wasted effort in this way.

Perversely, many carriers who say they don’t write certain products can have as much as 20% of their book of business in these very same lines.

It is no wonder that the market is inefficient with as much as 35-40% of the cost of commercial insurance being taken up by the placing and administration of business between broker and carrier.

And let’s not forget the client! They have no transparency on what’s going on, particularly when it comes to the pricing of insurance. There are no publicly available price books. They can’t turn to a Glass’s guide to get a market valuation for the cover they want to buy. And nor can the broker for that matter!

So, what do we have?

  • a very large, complex and fragmented market
  • buyers (aka brokers) not knowing who is selling what and at what price
  • sellers (aka carriers) not knowing who is buying what, where and when

And whatever technology or systems that there are in place, they are typically a heterogeneous collection of silo’ed, single function platforms that are barely integrated within each organization, let alone across the whole market.

It’s all a bit of a mess!

But out of this mess comes the opportunity for a market solution…not to be disruptive, but to enable the market to operate much more efficiently.

Which leads me to Kabir Syed, the CEO and co-founder of RiskMatch.

6ed1f7c2c69145cb5bb3de6f137d159a_sm_riskmatch-logo-reversed-on-blue-rgbRiskMatch is “an opportunity marketplace for Brokers and Insurers.” It is a platform that uses complex data analytics technology to show brokers who is offering the best products and deals. And it shows insurers where the best opportunities are in the commercial insurance marketplace.

RiskMatch joins the dots in the commercial insurance marketplace.

Kabir and I spent a couple of hours talking about the challenges in this market and the journey to build and launch RiskMatch. I also got to see the platform, which quite frankly, blew me away!

Just like QuanTemplate, the data analytics platform for the reinsurance market that we featured a couple of weeks ago, RiskMatch provides a very deep and rich analysis of market data presented behind a contemporary dashboard. The user interface is intuitive and the information it presents back is immediate.

The Broker’s view

Kabir took me through the CEO dashboard as we drilled down into the detail for a sample broker. At the highest level, the CEO can see how many clients he has, how much business is being written, over how many products and how many carriers.

The CEO can then drill down into the data and present it back in many different views. Their top 20 clients by GWP or product type or by margin. How much new business versus renewals is coming in. How each individual in the team is performing relative to everyone else in the team.

The analysis shows the CEO where the strengths and weaknesses are in their client portfolio. It identifies where they need to put more focus on placing additional business versus negotiating better prices. It shows the margin spread by product, by client and by carrier.

One view I particularly liked showed an analysis of the concentration of products (or lack of) by client. Drilling down, the dashboard showed a clear, pictorial view of who was buying what and from whom (and therefore, who was not buying and what they could be sold). This is a great sales aid as it showed very clearly where the opportunities were for the broker to direct sales effort and drive up sales.

For the broker’s executives, these dashboards highlight where the risks are in their business and what they need to do to mitigate them.

The Carrier’s view

The proposition for the carrier is a different one. In the US market, brokers don’t identify the clients to the carriers. The carriers simply don’t know where the business is in the marketplace. RiskMatch addresses this by giving the carrier insight into where the business opportunity is in the market.

Kabir walked me through the dashboards for a carrier and the first thing I looked at was the RiskMatch Opportunity Universe.

For a sample carrier, the Opportunity Universe showed me that they had $25m of business today. However, the Universe also showed very clearly and pictorially that RiskMatch could connect this carrier to up to $7bn of business opportunity, of which $3.8bn was new business and $2.3bn from cross-sell.

The dashboard also showed a high level breakdown of the number of opportunities, their market segments and average transaction size.

Drilling down further, the carrier can see renewal dates, which brokers were placing the business, the premium band and even the name of the person to contact about the business.

For the carrier’s, RiskMatch gives them a view of the marketplace they simply could not have seen before.

How it works

Brokers sign up to the platform and pay a flat fee subscription to access the Platform as a Service. This gives RiskMatch access to the broker’s book of business and all the details of every trade and transaction they have placed. On a daily basis, RiskMatch extract data from the broker’s systems, perform all the analytics processing and by 7am next morning, the data and analysis is up on the platform.

For the carriers they pay based on the business they manage for a specific broker and not on individual transactions.

Carriers get to see where the business opportunities are and also get to see how their performance compares to the market, which they don’t get today. Carriers typically measure performance against internal measures not the external market. As Kabir explained to me, “you might be satisfied with your $100k bonus, but that is because you don’t know that everyone else is getting $1m!”

RiskMatch has set the pricing strategy for the platform deliberately to encourage many active users and today there are over 1,000 on the platform. The reason is simple; they build an “Expertise Map” from the user base. This allows brokers and carriers to look for, find and then connect directly to those users who have the expertise they need to conduct business.

RiskMatch is a platform that has been built to serve the needs of the broker and carrier community by someone who understands what it is like from inside this market.

Having spent 17 years at Marsh in several roles, the last one as Head of Strategy & Operations, Kabir knows this industry extremely well. As do his client facing and account management teams. Interestingly, his co-founder, Roman Stepanenko, knew nothing about insurance and nor did the entire technical team when they started with RiskMatch. “This was very deliberate!” explained Kabir. ‘But now, after being at RiskMatch for over 2 years they have all become experts on insurance tech, terminology and bringing their previous experience from outside the sector to enhance what we wanted to do inside it.”

Roman’s expertise is in building trading platforms in the capital markets space, where the number of transactions are very high, very complex and very fast. Kabir has the market knowledge and Roman has built the technology to serve it

Having built a product and pricing index to connect carriers in the global markets to Marsh, Kabir saw the much bigger opportunity to create a marketplace beyond the boundaries of the firm. However, this wasn’t a proposition that aligned to Marsh’s strategy, so Kabir set about creating RiskMatch himself, bootstrapping with his own money.

In 2013, he hired the team, spec’d the system and filed the patents. They built the platform from the ground up and launched early in 2014. By the end of the 2014 RiskMatch had over $5bn of premiums going through the platform with 5 brokers.

A year later, they have 14 broker clients with $10bn and are now signing up carriers. The target’s and ambitions that Kabir has set for the business are ambitious although entirely achievable. And I don’t doubt Kabir’s determination to succeed.

All too often, when I’m introduced to a new tech solution, it is abundantly clear in 30 seconds that the business will fail because it is a solution looking for a problem. This is not the case with RiskMatch.

The inefficiency in the market is clear and crying out for a matchmaking solution to join the dots. From what I’ve seen of RiskMatch, this does the job extremely well!

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