Adrian Jones is venture capitalist in insurance and former reinsurance executive. Organizations that he has been a part of have invested in 40+ young insurance sector companies. Adrian has been a Board director or observer at eight young companies including distributors, carriers, and service providers in insurance. Before joining HSCM Ventures as a Partner in 2021, he was Deputy CEO of P&C Partners at SCOR, where he set-up and led SCOR P&C Ventures. From 2010 to 2016, he was head of strategy at RenaissanceRe. He started his career in 2001 at Bain & Co and has lived/worked in New York, Paris, Bermuda, Brussels, and Stockholm. Comments made by Adrian are made in a personal capacity only and should not be associated with any organization to which he is afiliated, employed, or an investor. His comments are solely for educational purposes and do not represent recommendations or research.

Highlights from the Show

• Adrian started in consulting, then worked in reinsurance and venture investing
• He has been looking at the headcount in the InsurTech sector starting with data from mid-2020, and saw that employment has increased from about 75,000 to over 100,000
  • In the downturn, there was a retrenchment, with companies reducing staff by 31% on average, with the bulk of that being driven by mid-sized companies (200-1000 employees)
  • There's been a lot of movement recently, between startups and incumbents, and people from outside the industry coming into it (and vice versa)
  • This also portends the changes we've now seen in the traditional insurance companies, especially in admitted carriers, some of which have been reducing staff
• Adrian spoke at ITC on lessons from early InsurTechs (founded after 2008) who are now worth $5 B or more, and looked into what lessons we can learn from their success
  • He noted 7 lessons from their experience
  • A surprising finding is that technology is not the differentiator
  • He found leadership teams that were experienced, entry into dislocated markets, partnership and support with regulators, and time to prove their model's success
  • "Insurance is a business of compounding reserves over time, and many young businesses haven't had the chance to prove that their compounding machine works?
  • You can see his slides at https://www.linkedin.com/posts/adrianjo_adrian-jones-keynote-at-insuretech-connect-activity-7125587320308682752-NhL6
• Insurance isn't about the giant TAM and high traction for Adrian, who would rather see less traction but the right traction rather than getting lots of traction that ends up being bad business
• Adrian has also seen reinsurers support the new InsurTech risk takers, whether backing programs where 100% gets ceded, to even carriers where they're ceding 40-60% of the premium (whereas an established carrier seeds 6% on average)
  • He didn't see the reinsurance veto people predicted
• We talked about how to address the issue where coverage is too expensive to buy and too cheap to sell in some pockets today, and what role parametric could play in solving that
  • He sees parametric as a good solution, but in niche situations like a deductible buy down
  • You face basis risk and a need for distributors who are willing to educate consumers while taking potential E&O exposure if insureds are unhappy when their loss isn't paid because the parametric trigger wasn't met

This episode is brought to you by The Future of Insurance book series (future-of-insurance.com) from Bryan Falchuk.

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Music courtesy of Hyperbeat Music, available to stream or download on Spotify, Apple Music, and Amazon Music and more.