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Disclosure: I've worked in both P&C and Reinsurance for several years. Also on Wall Street for a couple years. Also in Healthcare for a couple years. Overall I

Disclosure: I've worked in both P&C and Reinsurance for several years. Also on Wall Street for a couple years. Also in Healthcare for a couple years. Overall I think this is a nice briefing on the state of the insurance market in the modern economic landscape. It is extensively regulated with rates set and various nuances. All of this, of course, comprises part of a grand "data set" that looks quite appealing to modernization. Unfortunately, I think there should be a strong expectation that the market (industry) will both be openly hostile to "disruption" oriented attitudes a la Uber, but laugh at any ability to raise capital to compete at any meangingful level. I applaud your interest in perhaps improving a legally sanctioned form of graft (I prefer Mutual Organizations myself). Conversely, my experience leads me to laugh a little because I've seen the numbers and the complexity behind the scenes. I've got no interest in the industry beyond the paycheck it provided, but it is quite fascinating in numerous respects. Just the naming conventions alone once you get to Bermuda is a trip. Good luck.

akharris 9y ago
I agree with you that there are going to be challenges in building these companies, but not all of existing players aren't as openly hostile as I think you expect. I've spoken with a lot of P&C folks at different companies, and they know things will have to change, they're just trying to figure out how. Some of the more forward thinking companies are actively investing in new models and companies. I think that's going to accelerate. Even without that, over time, new models and companies will succeed. Some of these are going to look like stock insurance, some will look like Mutuals and reciprocals, and some will solve insurance like problems in new ways.
- 6stringmerc 9y ago
  The ones who aren't openly hostile already have the notion of disruption in development. This summary is, for lack of a better term, a day late and a dollar short.
SmellTheGlove 9y ago
We certainly agree on the bulk of your points (see my top-level post elsewhere in this thread). There is opportunity, though in my opinion, a really good way to get there is to work with an incumbent on a "modern" strategy. That's really hand-wavy, I know, but you gotta find the guy who's willing to piss off its brokers and start there.
- jon-wood 9y ago
  We're doing much that at Neos at the moment. We've taken a series A mostly funded by a couple of big insurance companies who are interested in what we can introduce to the market.
  - SmellTheGlove 9y ago
    Are you the guys using smart home (is that the right word?) devices to try and mitigate homeowners claims by preventing or catching problems as they occur (presumably to respond quickly and limit the extent of damage)? If so, that's a pretty good idea. Carriers already give discounts for things like alarms, sprinklers, etc, but virtually none partner directly with a company that can better assure the quality of monitoring. I'm sure there's a privacy hurdle to work on, but it has to do something to loss activity, right? Best of luck!
    - jon-wood 9y ago
      We are indeed. Out philosophy is that its better for everyone to prevent a claim before it escalates into one. To that end we provide smoke, flood, motion, and door sensors, along with an (optional) camera. We've got some other cool things in the pipeline capable of not only detecting problems but also responding to them before they become a crisis. You're definitely right that there are privacy issues to be answered but we try to be as transparent as possible about what we're doing with customer's data, and by being stringent about who has access to sensor data.
      - SmellTheGlove 9y ago
jessaustin 9y ago
Since you should know, is TFA's description: "Reinsurer – There are companies that purchase insurance risk from carriers." a conventional way to put this? ISTM a reinsurer is paid to take risk, which is the opposite of how one thinks of purchasing.
- jon-wood 9y ago
  The relationship between a carrier and the reinsurer is a bit of an odd one, with the relationship in my experience being more symbiotic than the description gives the impression of. At least in the case of the company I'm at the details of the policies we write, and what feeds into the pricing, is worked out in conjunction with the reinsurer. They then agree to buy any risk we take based on that model. It is definitely a case of the reinsurer buying that risk from us though, the best way to think of it is that if a reinsurer believes the model is correct they also believe that on average they'll end up making a profit on the risks they buy, and indeed that if we didn't sell the risk to them that we would make that profit directly.
- bcgraham 9y ago
  You're correct. They sell a product.

akharris 9y ago

I agree with you that there are going to be challenges in building these companies, but not all of existing players aren't as openly hostile as I think you expect. I've spoken with a lot of P&C folks at different companies, and they know things will have to change, they're just trying to figure out how. Some of the more forward thinking companies are actively investing in new models and companies. I think that's going to accelerate. Even without that, over time, new models and companies will succeed. Some of these are going to look like stock insurance, some will look like Mutuals and reciprocals, and some will solve insurance like problems in new ways.

6stringmerc 9y ago
The ones who aren't openly hostile already have the notion of disruption in development. This summary is, for lack of a better term, a day late and a dollar short.

SmellTheGlove 9y ago

We certainly agree on the bulk of your points (see my top-level post elsewhere in this thread). There is opportunity, though in my opinion, a really good way to get there is to work with an incumbent on a "modern" strategy. That's really hand-wavy, I know, but you gotta find the guy who's willing to piss off its brokers and start there.

jon-wood 9y ago
We're doing much that at Neos at the moment. We've taken a series A mostly funded by a couple of big insurance companies who are interested in what we can introduce to the market.
- SmellTheGlove 9y ago
  Are you the guys using smart home (is that the right word?) devices to try and mitigate homeowners claims by preventing or catching problems as they occur (presumably to respond quickly and limit the extent of damage)? If so, that's a pretty good idea. Carriers already give discounts for things like alarms, sprinklers, etc, but virtually none partner directly with a company that can better assure the quality of monitoring. I'm sure there's a privacy hurdle to work on, but it has to do something to loss activity, right? Best of luck!
  - jon-wood 9y ago
    We are indeed. Out philosophy is that its better for everyone to prevent a claim before it escalates into one. To that end we provide smoke, flood, motion, and door sensors, along with an (optional) camera. We've got some other cool things in the pipeline capable of not only detecting problems but also responding to them before they become a crisis. You're definitely right that there are privacy issues to be answered but we try to be as transparent as possible about what we're doing with customer's data, and by being stringent about who has access to sensor data.
    - SmellTheGlove 9y ago

jessaustin 9y ago

Since you should know, is TFA's description: "Reinsurer – There are companies that purchase insurance risk from carriers." a conventional way to put this? ISTM a reinsurer is paid to take risk, which is the opposite of how one thinks of purchasing.

jon-wood 9y ago
The relationship between a carrier and the reinsurer is a bit of an odd one, with the relationship in my experience being more symbiotic than the description gives the impression of. At least in the case of the company I'm at the details of the policies we write, and what feeds into the pricing, is worked out in conjunction with the reinsurer. They then agree to buy any risk we take based on that model. It is definitely a case of the reinsurer buying that risk from us though, the best way to think of it is that if a reinsurer believes the model is correct they also believe that on average they'll end up making a profit on the risks they buy, and indeed that if we didn't sell the risk to them that we would make that profit directly.
bcgraham 9y ago
You're correct. They sell a product.