Ep153 Ben Hubbard CEO & Co-Founder of Parsyl: Bringing a good kind of naïveté to insurance

Summary

Podcast Summary: The Voice of Insurance - Ep153 Ben Hubbard CEO & Co-Founder of Parsyl

Release Date: February 3, 2023

Introduction

In Episode 153 of The Voice of Insurance, hosted by Mark Geoghan, listeners are introduced to Ben Hubbard, the CEO and Co-Founder of Parsyl. Unlike typical insurtech innovators, Ben brings a unique perspective by combining cutting-edge technology with traditional cargo insurance, particularly focusing on temperature-controlled goods. This episode delves into Ben's journey, Parsyl's mission, innovative solutions, and future aspirations within the global insurance landscape.

Ben Hubbard’s Background and the Origin of Parsyl

Ben Hubbard begins by sharing his unconventional path into the insurance industry. His early career was deeply rooted in humanitarian supply chains in sub-Saharan Africa, where he worked on making HIV/AIDS treatments and vaccines accessible.

“[...] the first step was understanding the distribution of childhood vaccines in Africa and ensuring that they reached children in rural Kenya safely and effectively” ([02:14]).

This exposure to the challenges of supply chain visibility and risk management in developing countries ignited Ben’s passion for leveraging technology to solve persistent problems in critical sectors. This foundation ultimately led to the creation of Parsyl, a mission-driven insurer dedicated to safeguarding essential supply chains.

Parsyl’s Mission and Technology

Parsyl identifies itself as a "mission-driven insurer of essential supply chains," specializing in cold chain products such as perishable and temperature-sensitive goods. The company employs extensive data analytics to enhance risk assessment and pricing, surpassing traditional methods.

“We use a lot of data to underwrite accounts—additional data than is currently used today to better understand and price risk” ([02:14]).

Central to Parsyl’s approach is the integration of Internet of Things (IoT) technology. These IoT devices, small sensors attached to cargo, provide real-time environmental monitoring, ensuring that goods remain within safe temperature ranges throughout their journey.

“It’s about putting tailwind behind data collection and helping shippers improve” ([16:00]).

Integration of Insurance and Technology

Ben emphasizes that Parsyl’s unique value proposition lies in its ability to merge insurance with technology seamlessly. Unlike traditional insurtechs that aim to disrupt insurance solely through technology, Parsyl believes that insurance itself enhances the technological solutions by providing economic incentives and encouraging better risk management practices among clients.

“Instead of just selling technology, it's also coming to take on a client's risk and that's something much more useful” ([00:02]).

Parsyl’s policies are designed to reward clients for implementing IoT devices and utilizing the data generated to mitigate risks, thereby fostering a collaborative relationship between the insurer and the insured.

Partnerships and Market Position

Parsyl has established strategic partnerships to bolster its market presence and expand its offerings. A notable collaboration is with Lineage Logistics, the world’s largest temperature-controlled logistics solutions provider, whose customers spend approximately $500 million annually on cargo insurance.

“Ben is really a friendly character who has the charisma and empathy needed to succeed in a multi-brokered market” ([00:02]).

This partnership underscores Parsyl’s commitment to integrating technology with traditional insurance practices, enhancing both coverage and operational efficiency for clients.

Challenges and Evolution as an Insurtech

Transitioning from a technology-centric company to a full-stack insurer posed significant challenges for Parsyl. Ben candidly discusses the trial-and-error process and the steep learning curve associated with navigating the insurance value chain.

“We took longer to evolve as an insurer because we did it as non-insurance people and some of us were just figuring this out through trial and error” ([12:37]).

Despite these hurdles, Parsyl has successfully built a syndicate at Lloyd’s of London, allowing the company to operate as a risk-bearing entity while leveraging Lloyd’s robust platform for global distribution and underwriting.

Impact on Clients and Insurance Efficiency

Parsyl’s solutions have had a tangible impact on its clients' operations and loss ratios. By providing granular data through IoT devices, clients gain unprecedented visibility into their supply chains, enabling proactive interventions to prevent losses.

“We've had clients save very expensive cargo because they were able to intervene” ([17:27]).

Additionally, the integration of data-driven insights facilitates faster claims processing, reducing administrative burdens and enhancing customer satisfaction.

“Customer gets paid faster. We avoid spending money surveying when we, oh, it's just been a loss, we can just get them paid quickly” ([06:42]).

Growth Plans and Future Directions

Looking ahead, Parsyl is poised for significant growth, both in the cargo insurance sector and in public health systems across sub-Saharan Africa. The company plans to expand its technological and insurance capabilities to support vaccine stockpiles and other critical health-related supplies, emphasizing a balance between profitability and mission-driven impact.

“We want to make sure that we're able to move food and pharma products around the world so that we can have more confidence in the quality” ([16:00]).

Parsyl also aims to deepen its presence in existing markets like Chile, leveraging the Lloyd’s platform to support major exporters efficiently.

Competitive Advantage and Syndicate at Lloyd’s

Parsyl’s full-stack approach and syndicate at Lloyd’s of London provide a competitive edge. Being among the first insurtechs to scale on the Lloyd’s platform, Parsyl benefits from the historical significance and extensive network of Lloyd’s, enabling rapid market entry and global distribution.

“We're the first insurtech to scale on the Lloyd's platform” ([22:26]).

This strategic positioning not only enhances Parsyl’s credibility but also facilitates flexible and capital-efficient operations, essential for scaling in the dynamic insurance landscape.

Personal Insights and Mission Focus

Ben Hubbard underscores his commitment to Parsyl’s mission, emphasizing that building a sustainable and impactful business takes precedence over short-term gains or exit strategies. His leadership is characterized by a focus on long-term value creation, customer-centric solutions, and fostering resilient partnerships.

“We're here to do something different. The industry needs to innovate... we have something important to offer and let's do this in partnership” ([31:02]).

Conclusion

Episode 153 of The Voice of Insurance provides an insightful exploration into Parsyl’s innovative approach to cargo insurance. Ben Hubbard’s journey from humanitarian supply chains to leading a pioneering insurtech highlights the transformative potential of integrating technology with traditional insurance practices. Parsyl’s mission-driven focus, strategic partnerships, and commitment to enhancing risk management exemplify the future of the insurance industry—where technology and insurance coexist to deliver superior value and impact.

Listeners gain valuable perspectives on building resilient insurance solutions, navigating industry challenges, and the importance of maintaining a mission-centric approach in driving business success. Ben Hubbard’s story serves as an inspiring blueprint for aspiring insurtech entrepreneurs aiming to create meaningful change within the insurance landscape.

Notable Quotes

• Ben Hubbard [02:14]: “We call ourselves a mission-driven insurer of essential supply chains... to create financial motivation for the client to actively risk manage.”

• Ben Hubbard [06:03]: “It's about risk sharing... we both get rewarded if we're able to use that data to better and more efficiently handle a claim.”

• Ben Hubbard [11:00]: “It's really about building the technology into everything from the policy wording kind of ground up.”

• Ben Hubbard [17:27]: “Clients seeing their supply chains and seeing the data from their supply chains in a different way... notable improvements in those cases.”

• Ben Hubbard [22:26]: “We're the first insurtech to scale on the Lloyd's platform.”

• Ben Hubbard [31:02]: “The industry needs to innovate... we have something important to offer and let's do this in partnership.”

Final Thoughts

Ben Hubbard’s journey with Parsyl exemplifies how fresh perspectives and technological innovation can revitalize traditional industries. For those in the insurance sector, Parsyl’s model offers valuable lessons in integrating data-driven solutions, fostering strong partnerships, and maintaining a steadfast commitment to mission-driven objectives. This episode not only highlights Parsyl’s achievements but also sets the stage for future advancements in the insurtech space.

Transcript

[Mark Geoghan]

I'm Mark Geoghan and you're listening to the Voice of Insurance podcast produced in association with the Vantage Go enabling enterprise scale underwriting through a single pane of glass. Normally on the Voice of Insurance, we interview established leaders, but sometimes there are young businesses out there that are crying out to spend a little time in the limelight. So today's guest is a real insurtech innovator with a story that is all the more remarkable because it's bringing cutting edge tech to one of the oldest and most traditional lines of insurance, Cargo. Ben Hubbard, CEO and co founder of Parcel, is an insurance outsider who now finds himself running a syndicate in the beating heart of the global cargo market, Lloyds of London. How did he get there? The other remarkable part of the Parcel story is that unlike other insuretechs who see fusty old insurance as ripe for disrupting, Parcel is born from the idea that it is insurance that completes the tech side of the business because it allows economic incentives and enhanced coverage to be offered to customers to make them change behavior, run their businesses better in the interests of all. So instead of just selling technology, it's also coming to take on a client's risk and that's something much more useful. To give you an idea of the firm's progress and its potential, the business has just announced a strategic partnership with Lineage Logistics, the world's largest temperature controlled logistics solutions provider whose customers spend around $500 million a year on cargo insurance. Ben is a really friendly character who has the charisma and empathy needed to succeed in a multi brokered market. And I think his approach shows the way forward for how best to apply technology into the wholesale insurance value chain. So listen on, you may find inspiration for how to adapt Ben's approach into your own chosen specialist lines. Enjoy the podcast.

[Ben Hubbard]

Ben, welcome to the Voice of Insurance.

Well, thank you for having me. It's really an honor to be here. I've been listening to all of your podcasts and yeah, happy to be among the esteemed guests you've had on the show.

Obviously incredibly charming. You say all the right things Ben. You're doing really well already. Parcel, you've been around for a while and I'm sorry to ask you run through for anybody who doesn't know what you do, give us that pitch, tell us what Parcel is all about today.

Sure. We call ourselves a mission driven insurer of essential supply chains and what that means is we focus predominantly on cold chain products, so perishable temperature controlled goods. We use a lot of data to underwrite accounts additional data than is currently used today to better understand and price risk. And then we use our policy forms to create financial motivation for the client to actively risk manage, helping us mitigate any potential claims and to utilize our risk management solution, which is an IoT platform that can help us, in the event of a claim, really identify what the issue was and have a much more efficient process for handling the adjustment and payment and subrogation.

So IoT is Internet of things. That's small Internet connected devices, or they don't have to be small, but they tend to be small that can then transmit information and you can ingest that information and make decisions pretty quickly. So it's cargo insurance for perishable goods, probably goods that are temperature sensitive. Would that be right to say in general?

Yes, absolutely. So marine cargo line of business focused on the cargo, really focused on the beneficial owner of those products. Obviously those change hands as they move through supply chain. So in any given time we might be ensuring a supplier of seafood, a distributor of food, a health system that's distributing pharmaceuticals, anyone who needs to manage the financial risk of moving what is a very sensitive product, whether it's pharmaceuticals, seafood or berries, on their way from a manufacturer to an end customer.

How did you get the idea for this?

Well, our origin story is not a typical insurtech one. My background is a lot around humanitarian supply chains in sub Saharan Africa. And the first part of my career was involved in some of the early days of the HIV AIDS treatment push that happened in sub Saharan Africa, making those treatments available to people for the first time because it was inaccessible due to cost of those treatments. And so really getting those medicines out for the first, first time in the early 2000s and also involved in vaccines and the big push that happened there in the early 2000s and got a lot of exposure to the realities of supply chain, but certainly realities of supply chains in developing countries working through public sector health systems, a lot of challenges, so much impact. And we started this company really around that experience, which was a lot of product was getting lost in the distribution chain and there wasn't a lot of data to tell us where and why and how we can avoid it. And I got really curious about that in terms of this problem that had persisted and why the technology that I was enjoying as a consumer in the United States, why we couldn't use a similar approach for something that really mattered in developing countries that could actually save lives. And so we really started the company focused on how do we better understand the distribution of childhood vaccines in Africa. How do we make sure that a kid in rural Kenya gets a safe and potent vaccine by time it gets to them. And that just started us on this journey. And it's always been about understanding risk, using better data to understand risk and mitigate it. And that really quickly led to insurance. And we have just been on this evolution really starting with granular data collection and have been building up all the way through now to operating a syndicate at Lloyd's of London and operating as a kind of quote unquote full stack insurer. So it's been an interesting journey, but each sort of step has built on the previous one and is singularly pointed at solving these visibility and risk challenges when it comes to supply chains, in particular temperature controlled supply chains.

So the problem is you have a long supply chain, you've got different people passing this box of vaccines on from different people. You need to come off a ship, off a plane, onto a lorry, onto a truck and somewhere else onto a smaller truck. And then the problem has been you can't really prove whose fault it was that it suddenly went over temperature and the vaccine doesn't work anymore. So what's your core solution to that problem? We've defined the problem. How have you managed to solve it?

Well, it's really bringing all the components together in one solution. And we have a technology product, it is, got a few different kind of sensor solutions that can measure the environmental conditions of the cargo. So at a granular level, you were.

Just showing me your little, I call it a widget, but I don't really know, it's sort of like about the size of USB stick kind of thing. And that can physically travel with the cargo itself, can't it?

That's right. So it's a domino sized device, is the one we commonly use and that can travel with the cargo. Measure what's happening again at a granular level, which is important when we're trying to determine if there's been a loss. And that's great, but how is that data being used? And as an insurer we are in this very privileged position because we can use financial incentives in the form of the policy and the way we rate it, the terms we put around it to reward customers to put those devices in the shipments, reward customers who are putting the insights that they generate into practice to avoid claims. And certainly we both get rewarded if we're able to use that data to better and more efficiently handle a claim. Customer gets paid faster. We avoid spending money surveying when we, oh, it's just been A loss, we can just get them paid quickly. There's a number of efficiencies that come from taking insurance capacity, an insurance product, a technology product, the distribution of it, all of those things really need to come together through parcel solution to give customers this integrated risk transfer and risk management product. And when you think about supply chain, it's really complex. And you've got all these trading relationships. Someone's a buyer in one moment and then they become a supplier to somebody else. And it is a hard industry to change. There's mindsets, there's outdated technology, there's a lot to move. And what's really powerful about insurance is it just creates this different kind of value proposition. You're no longer saying, hey, I've got this, as you would call it, a widget, it's better than the other widget. Okay, fine, that's not that interesting.

But the point is you can say, hey, and now I can save you $10,000 on your premium and also I'll stop you having losses in first place.

Exactly. We can avoid losses. That's going to help you with your customer relationships. It's going to save you on premium, it's going to help you avoid claims on and down the line. It's going to more than pay for itself. And so you start to abstract the technology and really just start to focus on, here's the value to you customer. The technology, yes, it's there. You know, it enables us, it's very, very important. But it's about much more than a sensor. It's about much more than buying a kit from a technology company. And people have long talked about using sensors to pay claims like we see IoT and insurance all the time. I think you've probably had some podcasts on it and it's certainly in the cargo space, people talked about it, much harder to do it. And that's really because you have to be able to build the technology into everything from the policy wording kind of ground up. How is that policy form responding to the technology? How is the technology architected to withstand the scrutiny in the kind of legal context that insurance operates? How are the customers? Once you bind an insurance, how are they going to get the sensors and put them in the product? Most carriers in the specialty space don't have a direct relationship with their client. That's for the broker. And so the distribution model for us, we work through brokers, but we also have a direct relationship with the client in the sense that our team is working with them directly during the policy period to make sure that they're getting devices, that they're collecting data. We're doing quarterly business reviews with clients, so they're using the risk management insights that we're generating. It's a very different relationship to the client than any cargo insurer has today and has required a lot of innovation for us in terms of what that value chain looks like. And I think as we have evolved, what we've learned is to be effective, to control our destiny. It's really important to have all the components of the solution kind of within our domain, and that's why you see us working full stack across that spectrum of capabilities.

It's really interesting how you say that you were a technology company and then it was this kind of eureka moment where the insurance suddenly brings the whole thing together and makes it a much more coherent proposition. Is that the right way of describing it?

[Mark Geoghan]

Time for an ad break. We'll get back to the podcast after this very brief message.

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[Ben Hubbard]

Yeah, I think it's a compelling business model certainly. I think the things that drew us to it were one, we were frankly quite surprised by the lack of data that was used to underwrite a cargo account.

Yeah. It was certainly famously blind. Really? Or just a sort of experience rated.

Yes, exactly. So that was surprising. Then we looked at sort of what we had in terms of data and saw that it was quite useful. So that's one thing. Okay. But I think as we started to pilot and work at an early stage with incumbent insurers, I think we just started to understand more about that value chain. Certainly for specialty, certainly with Lloyd's you've got often at least two brokers involved. There's a lot of distance between risk and capital, between client and insurer in a way that as a technology company isn't great. You want to have control over that product experience for the end client. And as we started to understand it, I should say like founders of this company, none of us are insurance people and we've been helped along the way by a lot of great mentors and insurance experts. But I think there's benefit to fresh eyes and you know, I think we brought that the good part of naivete to look at this and say, well surely this should be better and you know, started to understand the COVID holder and MGA model saw that as a great opportunity to partner and eventually in the pandemic we have a real expertise in vaccines and underwriting vaccines and managing the risk of them. And so that led to the creation of Syndicate 1796. And so we just started adding these capabilities as we went. And as we kind of think about our business today, we have a lot of quote unquote customers. Like there's definitely the end insured and they're paramount to us. But brokers are our customers. Right. They need to be able to like sell our product and a wholesaler and a retailer and like how do we make this really easy and compelling for them? And we've obviously got our quota share capacity partners. We are risk bearing but we're taking part of the subscription, not all of it. And we've got our reinsurers relationship. So it's a lot of different customers whether we're feeding them exposure and premium or selling them an insurance product and a risk management tool. Not the easiest business model I'll say certainly for a startup.

So it sounds like quite people heavy. I suppose when you start a Tech business. One of the great things about tech generally is, you know, if you write a piece of software and you sell it a million times, you don't have a huge manufacturing cost for those additional 999,999 sales of the product. You've made the product once and you can cut and paste it and there's no extra cost. And that the great scalability of technology. But of course in this business it sounds like it's more people heavy than you might have thought at the beginning. Is that right to say, you know, because you need the people be with your clients, people with those relationships, building those relationships with brokers. And so it's not just tech and just let it go because it doesn't scale itself.

It certainly isn't people heavy in the sense that we have actually relatively small and efficient organization. It's not a pure SaaS business. That's the comment and I think that's absolutely true. And it's also part of the potential, which is technology is increasingly sort of taking over all kind of industries. Every company is a technology company to some degree. And we really like the insurance model. Certainly as we look at a macroeconomic context that we're in now tends to be very countercyclical. It is something people need to buy and it is, I use this phrase, it's a privileged position. I think you are in the position to create incentives for the practices you want to see clients carry out. And for us it's putting tailwind behind data collection and helping shippers improve. And we take a lot of inspiration from some of the good things that I think, you know, home and auto insuretechs have pioneered. Lots have been said about some of the failings of those. But I think there's actually been a lot of successes that commercial insurers, specialty insurers can learn from. Needs to be Adapted to a B2B and broker context. And yeah, so we see it as like a really powerful medium for affecting change. Our mission is to end the days of ship and pray. We want to make sure that we're able to move food and pharma products around the world so that we can have more confidence in the quality and ensures play a really important role in that and a really important role in global trade that people don't always appreciate. And I don't think that is fully utilized to its full impact potential. And that's what we're really here to do.

When you come in new to an account that's not had any of this technology applied to it before. What's the typical sort of impact for that customer and also perhaps for that insurer's loss ratio? Is it quite dramatic?

Most perishable shippers are collecting some type of time over temperature data in their shipments and most of them aren't using any of it. It's a very kind of tick the box compliance driven process and part of the client education and just sort of change that's more than what we're doing. It's really the whole industry is going this way is like how can you start using the data you're collecting? And to start using the data we need to like architect the solution in a way that the data gets off of a physical device and up to the cloud where it can be aggregated and coupled with other data. That's where real insight comes from. And so the first part of the process is clients seeing their supply chains and seeing the data from their supply chains in a different way. Right. And I think it's being able to look at trend lines, being able to look at performance across so many more dimensions than the sort of simple accept reject type of decision they were using it for before. And you've seen really notable improvements in those cases. Sometimes it starts off like, oh, we got some more problems that we actually weren't aware of. And those are actually great stories too because starts with awareness and then you can kind of make the remediations and improvements. So we've had clients save very expensive cargo because they were able to intervene. You know, they get notified on their phone that something's happening, whether it's save vaccines from a refrigerator or intervene in a shipment. We had a case, one of the evergreen ships, I think it was the Ever Forward was stuck in the Chesapeake Bay. We had clients cargo on that ship and I think it was pasteurized Crab. You know, $350,000 of crab was sitting there for, you know, a shipment that should have taken 30 days, took 100 plus days. And everyone assumed it was going to be a claim. And the ship finally got unstuck, docked at the port of Baltimore. They scanned a QR code on the container. Turns out everything was fine. And so we released the shipment, they renewed their policy, they got a rate discount. But so many other claims happened on that ship. And part of it was like maybe there was a device in there, it ran out of battery. Now there's no way to prove that the cargo is okay. The assumption that it's not, you've got a claim and that's just a great insurance policy for a customer spend 50 bucks putting some technology in your container to have that assurance when something goes sideways. So lots of great examples of how that helps the client and us. And it's just another part of insurance that is really attractive to us. I see it as a really compelling partnership model.

I suppose they're getting claims settlement much quicker.

I'm a customer guy, I love talking to customers and it is very different conversation when you're going to a customer and saying, well, take your risk. I'm not just here to sell you a sensor, I'm here to take your risk. And we're going to both benefit if you use the sensor and this technology to monitor your cargo. We're in this together. And I think that kind of risk sharing mindset, it just leads to a deeper form of partnership with a client that isn't always appreciated.

You've been around for quite a while. Did it take you longer than you thought it would to start to embed yourself and to build those relationships with those brokers and their original customers and the carriers and the wholesale brokers? Did it take longer than you thought it would or are you sort of about on track?

Given we didn't start with this end state in mind, I don't know whether it's on track or off track. I think we certainly took longer to evolve as an insurer because we did it as non insurance people and some of us were just figuring this out through trial and error. Part of that natural evolution is healthy because it allowed us to develop a mature technology product. I think our insurance proposition really rests on the value of our technology and our data. And I don't think we could have the capacity, both primary and reinsurance behind us if not for the differentiation that we've invested in as a company. So I think if we had started out of the gates as doing our insurance proposition, I'm not sure what it would be built on. And instead as we evolved, that was sort of the last step, sort of the final sale was insurance. But it is the thing that kind of helps us bring it all together. So sometimes just doing things organically, listening to the customer, understanding the market, it leads you down some really exciting directions. And it's always great to have someone tell you what your value is and sometimes it's different than what you might have originally thought.

So obviously you've got your syndicate, you are a risk bearing entity to some degree and obviously you're going to have coinsurance and reinsurance helping to back you up. Well, how should we view that is you have an aspiration to grow that, to become more of a full stack risk carrier that really is in control of its own destiny in that sense. Or are you more of an MGA type business? Should you be seen more as a hybrid MGA that we'd probably describe it as now?

Yeah, I don't know what label to use. I mean, we have our syndicate, it does make us full stack and risk bearing and we think it's a really compelling capability that sets us apart. I think beyond that, it's actually the Lloyds platform for us is very attractive. I think we can probably legitimately claim to be the first insurtech to scale on the Lloyd's platform. We've gone through the syndicate in a box sort of pathway and it's called a junior varsity syndicate. And it comes with a number of advantages. Our DNAS is a technology company and to your earlier point, you want to scale efficiently, you want to differentiate with data and technology. And so the attraction of an MGA model is always it's capital efficient. Right. And I think what's nice about Lloyd's is it splits some of the differences. Sure, we, we have to put some capital at risk through our syndicate, but the Lloyds security structure, the central Fund, there's a number of really exciting components to that platform that actually allow us to be risk bearing and capital efficient and issue a rated security to distribute our solution to 70 plus countries. And it is just such a unique capability for an insurtech. I don't think we've seen a company yet fully seize that and I think we hopefully are the first and hopefully there's more to come behind us because take a US focused insurtech, you want to go from MGA to risk bearing and you got 50 states, 50 insurance commissioners, policy forms. It is an arduous, steep climb. And you know, you're like, okay, we're going to focus on 12 states and we're going to expand to 30 states. And so for us it's like, well, we're good in 50 US states because we're in cargo. It's not an admitted line, you know, but we can go to Chile and support the fruit export and seafood export industry there and get to market in a matter of months. Where else can you do that but using the Lloyd's platform? And so that's an exceptionally powerful tool. It's still the epicenter of the global cargo market. It's the first form of insurance. It really is still the heart and soul of it. So we feel really privileged to be part of that history to be adding something to it. You know, we did the, we were the first cohort of Lloyd's Lab. So it's just like, it's just a deep part of the history of this company. And you know, we want to make Lloyd's fit for the future and bring our piece of that. And I think they see that potential in us. And so it's been a really symbiotic sort of association.

You're maturing, you're growing. Where do you spend most of your time and where are your key growth areas? Where do you see the business developing?

Yeah, great question. As we kind of look at this year, we're set to grow and we definitely want to grow, as you would expect any insurtech to say. Obviously with the capital markets being the way they are, I think it's sort of balancing growth and profitability. Every company's got that front of mind. But we've made all these investments. We're growing fast right now. We think that's just going to increase further. I think we're in an interesting micro cycle in the cargo insurance space right now. We've still got relatively hard market I think for the foreseeable future. So it's a good time to be in this business. And I think we've established ourselves, we've built a bit of a brand and credibility around. We've hired some incredible talent from the industry and so, yeah, you know, want to make some hay in the coming year and grow. We're also very excited about our work in sub Saharan Africa. We are now in 16 different African countries, mostly working in public health systems, monitoring national vaccine stocks and incredibly impactful, but also a real opportunity for insurance in our insurance capabilities. These are vaccine stockpiles that represent significant exposure. They're not insured. We have the best data set to understand that exposure. And so we'll be this year starting to bring some of those solutions to that really important public health task. And it's also just a part of our business. It has the purity of a philanthropic mission in terms of the impact we're having, you know, but it's a for profit business that we look to serve those customers with all of our capabilities and the best product. And we've gotten a lot of traction as a result of that.

Suppose a business that's not for profit can't really scale because if you scale losses, they just get bigger all the time and it becomes unsustainable. So it doesn't really help anybody in the long term. I suppose we're in a much harder reinsurance market and a slightly harder venture capital funding environment or quite a lot harder. Has that affected you in any way or you got all the funds you need?

At the moment it's affecting everybody whether you need funding or not. And the capital markets aren't locked up like 2008, but there's not a lot of deal activity happening. And so as a venture capital funded company, it's certainly something we're contending with, but we're well capitalized right now, we're growing fast. So it's certainly not existential for parcel.

But it's not a constraint on growth that you're more cash conscious than you would have been otherwise.

So it is and I think that's what we have to really balance is if I had my druthers we would invest more and grow faster. And so we're trying to balance that with what's happening in the capital market, what kind of path. And the beauty is we're in control of that. And so we're going to have to make some of those trade offs depending on how this year plays out. But at the same time there's just a lot of juxtaposition between what you might be seeing in financial markets. In the US we added a quarter million jobs last month. Inflation is high, but not historically speaking, horrible. Interest rates are high, historically speaking, not horrible. And so you've got some interesting things happening. Kind of the underlying economy, there's sort of like the financial economy and then there's the insurance economy. Right. Which I think is going to be a very healthy. Yeah, yeah, it's doing fine. And so I think because we're insurtech, we're venture funded, we're working in insurance, we're dealing with small mom and pop businesses who are thinking about insurance purchase and trading it off against their kids college savings account. Right. Like any money you can save, that small business owner really affects them personally. And so I think we straddle some really interesting economic forces that aren't always aligned. And making sense of that for a company like ours is an interesting task. But I think again it gives us some resilience and we're really excited about being one of the strong companies that comes out of whatever we call this moment, whether it's a recession or not, coming out of it stronger and better positioned.

You've built yourself into this position as being sort of kings of the cold supply chain, the cargo smart cargo insuretech people. Do you think given the skill sets that you've got, do you ever eye any other parts of the insurance value chain or other segments of the insurance, you know, other lines of business where you think the sort of things that you know, could be applied at some point in the future? You could say, hey, you know, in, in year three, we could go somewhere else with this where we could apply what we're learning here.

Yes, every startup, every founder has some ideas in their back pocket. We are really trying to stay focused and the perishables opportunity for us is so big that it's going to keep us quite busy for a long time and we need to stay focused on that. That said, there are other adjacent business lines.

What about the growers of some of those perishable products? You know, if they're plant based, for example, you know, they've got greenhouses, they've got temperature problems that certainly, I know tomatoes, they get a bit too hot and then they become second class tomato and they're not worth half as much as the pretty ones that the supermarkets want to buy and all that kind of stuff. There seems to be a lot of potential applications perhaps.

Yeah. And I think once you get good at being able to couple data and technology with insurance, product and capacity and bringing those all together in the way that we're doing, you can start to replicate it in other business lines. For us, the question is always what is going to be different and differentiated about what we do if we were to do something else? And it really rests on like what is the unique data that we can get our hands on or acquire in order to do it differently. So we're not really interested in making something marginally better that's already out there and working. We want to really add something to any additional kind of business line that we might add. But again, right now it's just not something that's on our radar.

Obviously, you're in the first cohort of the Lloyd's lab. You're a first mover and you've built yourself a first mover advantage. How long in your mind do you have before others come and erode that, that competitive advantage?

That's a good question. I mean, good luck. It's. It's hard. Yeah. This is not a capability you can build quickly or easily. And you know, I think even for us, we've had some fortuity in terms of our path and the capabilities that we've been able to acquire. Look at our syndicate. We came into creating that outside of, I think, what Lloyd's and we sort of envisioned, which is, you know, you're an established mga, you got a big book of business, you kind of bring it into Lloyd's and start a syndicate. We were a startup with virtually no book of business. And then because of the pandemic and our capability with COVID and vaccines, we were able to lead the market in creating what we call the global health risk facility that is anchored by our syndicate. And you know, we're growing into that capability now versus sort of bringing that growth into the market. And credit to Lloyd's for showing the kind of flexibility to be responsive to what was happening. So I think will insurers start to use data more? Hopefully, you know, I think that's a really good thing for everybody, but I think it's a hard model to replicate. I'll just put it that way, just knowing what it's entailed for us. And what I really love about the subscription marketplace at Lloyd's is it's not a zero sum proposition. And I think we're already starting to see this is like let's do it together, you know, get crowd behind parcel. This year we can start leading business, open market business. Let's do it together. And we're actually pretty generous in terms of sharing what we're learning with our insurance partners. And I very much believe in kind of rising tide, lifting all boats in this sense. And we're starting to see that.

Yeah. And I suppose they're always going to be with you if there are any missteps as well. Because if something unforeseeable happens then you're going to lose together as well, as well as win together.

Yep. And we're pretty candid with our partners about that, which is, look, no one's done this before. We haven't done it before. We're doing it, we're figuring it out. We're going to have some missteps, we're going to have some screw ups, we're going to have some losses. Luckily today we've been able to minimize most of that. But I think really being honest about, we're trying to do something different. You know, the industry needs to innovate. You're probably as an established insurer, maybe not well positioned to do it, but you have something important to offer and let's do this in partnership. And just from day one, it is the single most resonant part of the Lloyd's marketplace is it is a partnership marketplace. It's just something I've never seen anywhere else in the world. I think it's just a really, really unique place and is so conducive. To partnerships between technology and insurers. And that's how we started and that's how we've evolved there and that's how we continue to evolve.

Well, it's really great to hear Ben, you know, because at London Market we do spend a lot of time bashing ourselves and doing ourselves down. But it's really nice to hear a success story. One other thing I wanted to ask is you've opened a London office. It seems fairly understandable if you've got a Lloyd syndicate. Any other offices planned to be open around the world?

Well, our director of operations hopes not because it's not easy. It turns out that was a big step for us opening a London office. We're really proud of the team we hired. We've really acquired some excellent underwriting talent and that's just going to help us expand our presence and I think the most important insurance marketplace for our future because of we can leverage that Lloyd's platform. We've started to build a respectable book of business in Chile that's going to continue to grow. You know, we're imperishable. So Latam, major exporter. That's pretty interesting to us. And so whether or not we open an office, I'm not sure that's necessary. But we are looking to build out in the markets that make the most sense for our focus.

What about you personally as an entrepreneur? Entrepreneurs often have an exit plan. Some do and some don't. So I'm going to ask you, do you have an exit plan? Are you the sort of person who just wants to carry on building a really good business forever?

Well, I'm very much a mission focused person. It's how I spent most of my career before doing this. And for me, for the co founders, for really everyone in this company, you join parcel because you are committed to the mission we're working towards which and the days of ship and pray and making sure everyone everywhere has access to quality goods whether it's food or medicine. And there's some real challenges and problems we're solving around doing that. And our approach has always been focus on the mission, serve the customer and the rest of this should take care of itself. And we have investors, we're a business, we want to make money, we want to generate a return for everyone who's taken a risk on us and put money into this company. So all those considerations are there and deliver it around seeking patient investors who buy into our long term vision, who buy into our mission and that's really important. No one's part of this company because they want to flip it for a buck. They really want to build something enduring and that has a sustainable long term advantage that creates real enterprise value. So I think focusing on the fundamentals is the best way to do that.

Well, Ben, we've had a really, really good, very wide ranging conversation and it's a good place to end, I think, on your mission. So continue the mission and good luck and then come back and give us an update at some point in the future. Thank you so much for coming on the show.

Yeah, well thank you Mark. Like I said, it's an honor to be on with you.

[Mark Geoghan]

Well, I hope you enjoyed today's episode. If you did, don't forget to subscribe or leave a like or a review or recommendation on whatever podcast platform you used to access this program. These really help get the word out. Before we go, just a quick reminder that advertising slots are available here and in other places in the Voice of Insurance podcasts. Podcasting is the fastest growing medium and attracts a high quality audience of key decision makers. It's also an intimate medium where you, the listener are right in the room with me and the interview subjects. Needless to say, that means it's a great way of getting your message out directly to an audience because you know you've got their full attention. It's also very cost effective, so get in touch with mark@the voiceofinsurance.com to find out how you could be speaking directly to the industry. The Voice of Insurance podcast is produced in association with Advantage Go, enabling enterprise scale underwriting through a single pane of glass. Voice of Insurance is produced by me, Mark Gagan. Music was written by Anna Geogan and.

[Ben Hubbard]

Produced by Carlos Gagan.

[Mark Geoghan]

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