Metro Bank: Magic Makers
Magic Makers provides insight into the breadth of disruptive technologies reshaping the sectorRead more
In 2018, Lloyd’s of London partnered with L Marks to create Lloyd’s Lab, a new hub for insurance innovation within the 330-year-old specialist insurance and reinsurance market.
Lloyd’s Lab created an environment to develop new products and deliver solutions to meet the unique and rapidly changing needs of the Lloyd’s market. Now a global center of insurtech, Lloyd’s Lab is an award-winning innovation lab bringing together insurers, brokers, and entrepreneurs, embedding new technologies into Lloyd’s and the Lloyd’s market, and supporting the market’s shared goal of sharing risk to create a braver world.
The selected businesses benefit from the insights, mentorship and practical support of both the market and corporation, allowing them to develop products and services that cater to the current needs and future ambitions of the marketplace. Since its doors opened, over 80 teams have taken part in the Lloyd’s Lab across seven cohorts. Through those teams, Lloyd’s Lab has:
Lloyd’s Lab entered its fourth year in 2022, launching its 8th cohort focusing on systemic risk posed by climate change, supply chain disruption, data and modelling, and claims handling.
Lloyd’s Lab is both delivering pioneering products and services for the Lloyd’s market and driving transformation throughout the insurance industry. As a tech hub geared toward entrepreneurial solutions, the Lab has become the focal point for the organisation’s wider innovation agenda.
Addressing the imperative set by Covid-19, alongside the two cohorts in 2020, Lloyd’s Lab also created two additional programmes to respond to different aspects of the global pandemic, from customer support and economic recovery in the short term to building resilience in the market in view of future waves of the virus and crises on a similar scale.
Lloyd’s Lab continues to achieve successes for the insurtechs, for Lloyd’s, and for the Lloyd’s market. The Lloyd’s Lab alumni have raised over $250 million since joining the lab and 64% of the startups that have joined Lloyd’s Lab have achieved commercial deployment across the market.
These include Optalitix that is saving more than 13,000 hours of data entry per year for the market and Parsyl that partnered with Lloyd’s to create Syndicate 1796 and the Global Health Risk Facility to insure the transportation of the Covid-19 vaccine.
Parsyl’s supply chain management platform helps shippers, retailers and insurers understand the conditions that will maintain the quality of sensitive and perishable goods as they move through the supply chain.
Part of Cohort 1, Parsyl had not worked within the insurance industry before joining the Lab. During the programme, the team worked with Lloyd’s and a handful of top-tier market syndicates to develop a new initiative offering crafted risk coverage for sensitive shipments using Parsyl’s solution. The team also worked with its mentor group to access historical claims data in order to determine the potential usefulness of its solution for a much larger claims initiative.
By the end of the programme in December 2018, Parsyl had established partnerships with six large insurers with a view to providing enhanced marine loss-mitigation and risk-prevention services. In February 2019, two of those insurers – Ascot and Beazley – launched a Lloyd’s-based cargo consortium, offering insureds the use of Parsyl’s device to manage risk claims and performance.
In July 2020, Parsyl announced that it will provide insurance and risk mitigation services to support the manufacturing and distribution of a Covid-19 vaccine. Developed in anticipation of a Covid-19 vaccine, Parsyl’s “Syndicate 1796” both recognises and responds to the need for a comprehensive and streamlined insurance and risk mitigation strategy that can complement manufacturing and distribution objectives of major vaccine development efforts, including the ACT-Accelerator Vaccines Pillar (COVAX) and the US Government’s Operation Warp Speed (OWS). Syndicate 1796 was recently approved by Lloyd’s of London and is planning to begin operations on 1 October 2020.
Layr’s proprietary underwriting algorithm makes it easier for small businesses to access liability insurance by enabling business owners to select the most suitable insurance, quoting a real-time monthly fee to be paid by credit card and, finally, identifying the relevant insurance carrier.
During Lloyd’s Lab, Layr completed API integrations with service providers including Xero Accounting and QuickBooks Accounting, providing commercial customers with a tailored quote in a single click – and without having to complete the usual insurance application.
Following the end of the programme, Lloyd’s invested in Layr, while Head of Innovation at Lloyd’s, Trevor Maynard, joined the company as an advisor. Layr used some of the funds from the Lloyd’s investment to obtain surplus lines licenses, enabling the company to operate in the UK. The team has since signed a contract with a carrier to have its terror product deployed on the Layr platform.
On 1st July 2020, Layr announced a $5 million Series Seed round of financing led by Sandbox Insurtech Ventures with participation from new investors Flyover Capital and Maschmeyer Group Ventures, and from existing investor, Lloyd’s of London.
Tautona is a Cognitive Automation company which uses robotic process automation (RPA), machine learning (ML) and Natural Language Processing (NLP) to provide insurers with a frictionless approach to automating claims and ancillary processes.
The Lab environment provided Tautona with direct access to those that were facing problems within their existing claims processes and they took advantage of this to run a PoC, and build a bespoke prototype with one of Lloyd’s Managing Agents (MA). The team was able to gain access to the data and policy documents necessary to begin building a rudimentary prototype. Tautona were able to demonstrate a reduction in lapse time for determining coverage for 80% of use case claims from 2-10 days to 10-15 minutes (99.3-99.9% time reduction). Additionally, they saw a reduction of 50% in loss adjusting expenses via the automation of the claims process and a 5x increase in the number of claims that were processed over the same time utilising existing procedures. They also saw a reduction in errors and emissions, leading to better decision-making and importantly, an increase in the speed of the claims process for the policyholder, undoubtedly leading to ‘peace of mind’.
Following the lab Tautona continued working with one of the Lloyd’s Managing Agents (MA) where they developed a prototype. The specific nature of the use cases undertaken are confidential, however the improvement in efficiencies stand out. Tautona were able to demonstrate a reduction in lapse time for determining coverage for 80% of use case claims from 2-10 days to 10-15 minutes (99.3-99.9% time reduction). Additionally, they saw a reduction of 50% in loss adjusting expenses via the automation of the claims process and a 5x increase in the number of claims that were processed over the same time utilising existing procedures.
Parametrix creates parametric (index-based) insurance for external service downtime such as cloud outages, network crashes and platform failures. Their technology allows them to collect robust datasets, price accurately, underwrite cost- efficiently, aggregate global risk and detect insured events in real-time while providing an accurate and precise view of risk accumulation and concentration across services and regions.
Parametrix joined Lloyd’s Lab cohort 4 to explore the London and wider market regulatory landscape, gain market insight and create a new class of parametric insurance: downtime business interruption on cover. The Lloyd’s Lab accelerated the process from modelling and actuarial analysis through to launch, while helping them to understand the Lloyd’s market and connecting them with potential capacity providers. By the end of the Lab programme, Parametrix had finalised the actuarial analysis to create a viable business interruption product and had secured the capacity to back it.
Following their participation in Lloyd’s Lab cohort 4, they have now launched their product in multiple markets worldwide: USA, Israel, Japan, Germany, Austria, Italy, and have already paid their first claim in a significant moment in company history.
Optalitix is a UK-based software platform that rapidly enables insurers to use AI. Using their platform Acumen, they can convert any desktop model into an API without any infrastructure or code, and then apply them in multiple areas such as underwriting, claims handling or customer management using their pre-built products.
The team utilised the Lab as a ‘safe space’ to source and locate problems in existing processes. For the Lloyd’s market, profitable underwriting depends on continually improving tools and techniques used to select and assess risks, manage risk portfolios and optimise the claims handling process. Optalitix was able to develop a rapidly deployed Proof of concept (POC) within a week using an agile methodology to deliver in record time. The solution was reviewed and tested with a sample of data with market participants over the summer; and in just a few months, Optalitix was authorised to create a full-build version available to market users by the end of the year.
Following the Lab, Optalitix officially partnered with Lloyd’s Lab to use its reporting portal for catastrophe data to reduce more than 13,000 hours of data entry per year for the market.
Gaia combines reproductive health data with financial technology to make IVF treatments more accessible, affordable and individual. They aim to remove the ambiguity of IVF with a personalised success prediction and tailored insurance plans to protect customers from spiralling costs and financial unknowns, providing unique and supported fertility journeys with the option to get reimbursed if things don’t work out for their customers.
Gaia came into the Lab looking to work with the market to develop and write a first-of-its-kind IVF insurance product that would leverage the large amounts of fertility data that they had collected. The intention was to have a sellable policy towards the end of the Lab. They were also looking to use this process to scope out potential capacity providers and learn more about the insurance and Lloyd’s market. Gaia used their engaged and willing mentor group to co-design a realistic IVF insurance product that also retained the value-based objectives of Gaia.
By the end of the 10 weeks, the Gaia team had completed the product design stage of their programme plan having developed an MVP of their product, which they presented at Demo Day. They had also met with the Pricing Innovation Committee and were beginning the pricing aspect of their plan.
Following the Lab Gaia are continuing to work with all of the mentors from the programme on the policy wording, pricing and determining the risk capacity of the mentors.
In February 2022, Gaia announced they had closed a Series A funding round of $20m (£14.75 million) led by UK venture capital firm Atomico in addition to the $3m raised in earlier funding rounds from investors Kindred Capital, Seedcamp and Clocktower Technology Ventures.
Supercede is an independent, venture-backed reinsurance technology company that supports, rather than disintermediates, the traditional tripartite value chain. They offer a digital ecosystem for all reinsurance industry stakeholders to let them show what they can really do, unhindered by the burden of manual admin.
Supercede used the Lab to test drive Supercede Analytics with syndicates and work with them to optimise Supercede’s data capture process for the London Market speciality lines. They had a number of firms trialling or preparing to trial their Analytics product for outward reinsurance, initially developed in the US with Markel. Supersede have been trialling their product with their Lab mentors
Since the Lab Supercede have been in touch with a number of Lloyd’s syndicates, managing agents and brokers as well as non-Lloyd’s entities. Supercede are focussing on developing their US business and have hired a new head of US business development.
Kita’s vision is to be the world’s first “carbon” insurer, providing insurance for the voluntary carbon markets to enable more high-quality carbon removal solutions and generate positive climate impact.
Kita joined the Lab still at the concept stage, having been formed a few months previously through a climate-focused venture builder programme. With a goal to build insurance solutions for the carbon sequestration industry, their purpose was to use the 10 weeks to understand the insurance market and to work with their mentors to create an underwriting process using their proprietary risk models.
With a lot of guidance from their mentors, Kita identified a credit risk policy for developers with claims to be paid to carbon offset customers as the best initial product to develop. After choosing their product, they focussed on developing their risk models, defining cover and building out the customer journey.
They have continued to work with their mentors, including some of the world’s leading speciality insurers whom they are considering providing capacity. Having gained FCA Appointed Representative status and working towards becoming a Lloyd’s coverholder, Kita is on track to launch their first carbon credit insurance policy in January 2023.