Investing in today’s changing Insurtech landscape

 This past week, OMERS Ventures announced our lead of the oversubscribed $17.7M Series A funding for Joyn Insurance. Accompanying us on this journey are some of the world's finest Insurtech investors, including Avanta Ventures, ManchesterStory and Cohen Circle - along with Joyn's strategic partner SiriusPoint, and a handful of select angel investors. 

Joyn is a tech-enabled provider of "Excess and Surplus" coverages (aka E&S, non-admitted, non-standard) for small to mid-sized businesses. If you are unfamiliar with E&S, it is risk that requires bespoke underwriting due to its 'non-standard' nature. The company acts as a Managing General Agency (MGA) and offers coverage for property, general liability, and 'excess' for markets such as construction, retail, and restaurants - servicing over 700 NAICS codes.  

Joyn is led by an all-star cast of insurance professionals who have long believed the industry was not keeping the pace of advancement seen by other sectors. As the Insurtech disruptors challenged the lack of modern technology in today’s insurance experience, Joyn’s leadership team found themselves in total agreement. In fact, they agreed so much-so that ultimately, they decided to do it themselves and founded the company.  

Our path to investment 

What first attracted me to Joyn was its laser focus on servicing brokers in the burgeoning E&S market. Emerging risks, from pandemics to extreme weather, from “hard” reinsurance markets to the rapidly evolving cyber ecosystem, are challenging for incumbents to underwrite. As such, many carriers prefer to focus on their standard, admitted products. This has led to large segments of the market being unable to secure necessary coverage, driving the need for E&S offerings.  

The first half of ’22 recorded E&S premiums in excess of $31B up 32.4% compared to the same period in ’21 – tracking to be the fastest year of growth ever recorded in the sector. This incredible growth is fueled both by increasing complexity of traditional risk underwriting as well as the emergence of yet-to-be seen risk. The entire industry recognizes this opportunity, so much so that this era has been deemed the “Golden Age” of E&S. 

E&S is complicated - each risk must be evaluated individually, with highly customized coverage and pricing. When I spoke to commercial brokers, I consistently heard that E&S placements often took weeks, sometimes even months. The experience was start-and-stop, plagued with highly specialized data requirements, and was highlighted by a lack of transparency through the process. No broker I spoke too enjoyed placing E&S risk – especially in the context of how much improvement other sectors of the Insurtech market have advanced. While the pioneers of the Insurtech Revolution, such as Lemonade, NEXT, and my alma mater, Hippo, raised the bar in speed and ease, their efforts focused on the homogeneous, admitted space. The E&S market was mostly ignored in these advancements. 

Similarly, when I deep-dove into the day-to-day of an underwriter, I quickly saw that these folks spend most of their time performing data entry, versus truly assessing risk. This is especially so in E&S, where submissions can be so detailed that the risk of data entry errors compound the problem. I heard consistently that it would be great to have more time to better assess risk versus keying-in form data. 

Enter Joyn. 

As I mentioned above, Joyn underwrites E&S as an MGA. The company's differentiation is its purpose-built tech platform. The focus of the workflow platform is accuracy and quality, with speed being an outcome. This optimization begins with the system automatically transposing data from disparate submission sources. This input is then augmented with third party data and stored centrally in Joyn’s platform. From there, automations shepherd the underwriting process until human intervention or review is needed. Update notifications, both internal and external, are triggered as the submission progresses. What was once a choppy and tedious process is largely run in the background in a single application environment with high levels of transparency along the way. 

Underwriters at Joyn do not spend hours of time performing excruciating data entry. In fact, at Joyn, an underwriter rarely touches a submission until it’s 100% ready for underwriting. This fundamentally changes the role, while allowing greater accuracy and scale. Joyn models to $20M in annual GWP per underwriter. This stunning metric is yet to be achieved even by most admitted underwriters. And the company’s loss performance is equally impressive, because again, there is now time to accurately assess risk versus cutting corners to win business. 

And of course, the broker experience has already proven to set Joyn apart. Joyn calls its vision “Delivering an ‘admitted-like’ experience in E&S.” In other words, despite the relative complexity of an E&S placement, the experience shouldn’t be much different than the high bar set by the Insurtech disruptors of other markets. Brokers now confidently take on their customer's E&S placements as they know that leveraging Joyn will require a fraction of the effort and time. More importantly, brokers can now quickly secure the proper coverage for their customers at the right price. And the team rigorously benchmarks their improvements and gains, looking to optimize wherever possible. 

As you will notice above, these benchmarks are tracked in seconds and minutes, not hours or days. But again, while optimization is the goal, speed is a bi-product of the company’s accuracy improvements. Much of the streamlined process is facilitated by software entering data, not humans. Submissions are error-checked and enriched with third party data to ensure the underwriter has better quality data to assess the risk. But more importantly, the underwriters now spend time with each risk to ensure that brokers get their customers the most appropriate coverage. 

And wherever possible, Joyn augments its workflow with a series of automations and triggered responses (both internal and external). Now brokers can update their clients on progress and quickly know when more data is needed. 

But most importantly, the team. 

At OMERS Ventures, we focus on investing in great teams. Joyn is led by an all-star cast of insurance professionals, including its CEO, Seraina Macia, who previously served in CEO roles at some of the best-known global insurers. Her leadership team, including Ed McGough, Callie Thomas, Stephan Braig and Uwe Schoberth and Bill Fahrner, is equally impressive. 

Admittedly, when I first met Joyn in early 2022, I was concerned about backing a team of career insurance executives. My bias pointed me towards the tech architype that I have known/been part-of most of my career. But as I spoke more and more with the team, it was their deep knowledge of the industry that kept me coming back. And it was through those experiences I saw the true entrepreneurial grit this team embodied, and their passion for developing a superior solution. I became convinced that only a team with a deep understanding of the E&S market could truly impact such a complicated sector. 

Don’t get me wrong, I am big on outsiders shaking things up, but the caliber of this team is hard not to love. 

From here to the moon 

’22 was a rocky year for the Insurtech sector, but many of us focused on the market simply see this as an evolution. Emerging businesses will be valued less on their disruption potential and more on proven product-market fit as measured by pace of adoption. I have little doubt the cohort of ’23 will be among the best performers when the industry reflects on its incredible progress down the road. In the meantime, armed with world-class technology and industry’s top leadership, Joyn is ready to capture the fastest growing opportunity in the insurance sector. I could not be more proud, or excited, to be along for the ride!