Future Shock
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nsurance and risk professionals know there are new risks emerging they need to address, but a related development isn’t always appreciated, an industry veteran suggests. “The fact that things are changing so rapidly is a risk factor itself,” said David Bradford, principal of Iosis Consulting. Bradford’s extensive background in the reinsurance industry, and his experience in co-founding what is arguably one of the oldest InsurTechs, prompted CM to invite him to serve as guest editor for part of this magazine. Answering our call, he chose the theme “Future Shock: Managing Risk in a Time of Accelerating Change.” “It’s a concept that has intrigued me forever,” he said, referring to the book “Future Shock” by Alvin Toffler, published 50 years ago. “The thesis was that people were not equipped to deal with the rate of change and that it caused psychological, emotional and social problems.” The rate of change created two groups of people: “those who adapt well to change and who can capitalize on that, and [others], who are not comfortable with change and retreat and get left behind in the process.” “If the rate of change in the 1970s was causing problems, what does the world of today mean in terms of how we deal with change?” The pages that follow summarize answers he got from risk experts with varying perspectives: one involved with taking a disruptive product to market; another with the creation of investment markets for risks like cyber and pandemics; a third bringing technology companies together with insurers; and an executive whose company responds to customers’ coverage needs in an instant—on demand.
Early InsurTech
Bradford learned his own lessons about
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keeping up with rapid change during a 40-year career that started at Allstate Re in 1980. After holding executive positions at Reliance Re and Swiss Re, as well, Bradford and Tom Ruggieri, a former managing director of Marsh & McLennan, teamed up to launch Advisen with the goal of providing an online information resource for the commercial insurance industry. “We didn’t get it right at first,” Bradford said, noting that the pair assumed people wanted to do all their work digitally. “We envisioned an Advisen on every broker’s desktop, but that wasn’t the way brokers worked, [and] it wasn’t the way risk managers worked,” he said. Over time, Advisen “migrated to becoming largely a data company,” licensing the data separately from the Advisen.com platform. The Advisen pioneers were ahead of the curve with another part of their vision: to create underwriting tools using natural language processing and machine learning. “We made a huge investment in that technology, which in 2000 was pretty primitive. The training involved was just beyond the capabilities that we had.” With no payoff on the investment, they scrapped the idea. Leading his own consulting firm today, Bradford helps tech startups navigate insurance markets. His sobering past experiences—of taking fantastic ideas to market and then having them not work out—help him guide InsurTechs when they need to pivot, he said. Advisen could be described as a forerunner to InsurTechs like RiskGenius and RiskMatch with its policy comparison and prospecting tools. But Bradford had an even earlier experience trying to bridge the insurance technology gap with a platform not unlike InsurTech Boost Insurance’s infrastructure-as-a-service offering today.
While at Swiss Re, he formed a joint partnership with Policy Management Systems Corporation to create “a soup-tonuts turnkey operation for launching new insurance companies. If somebody came in with a good idea, PMSC not only had the outsourced IT systems, they also had a complete outsourced backroom for a virtual insurance company,” he said. Swiss Re provided the reinsurance and had an investment division that provided capital. In an earlier role at Swiss Re, Bradford worked with McKinsey to revamp the U.S. operation. Recalling huge disruption that occurred when all of senior management was let go, he said helping to re-engineer Swiss Re America was a great learning experience. The team started from scratch, “thinking about the markets not from the standpoint of a going concern but how we would like to build the company,” he said. Today, Bradford works with leading firms to provide feasibility studies, financing, back-office outsourcing and other services to early stage insurers, MGAs and RRGs. He also helps mature players develop innovations to address emerging risks and underserved markets.
