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Transformation in the Large Commercial Insurance Sector Needs an Inside-Out Approach

Tom Hutton

Chairman, SoFi

Tom Hutton serves on the Board of Archipelago, is currently Chairman of SoFi, and was the Founding Partner of XL Innovate.

Hemant Shah and I go back a long, long way. Shortly after he started RMS in 1989, he and his co-founders invited me to become the first CEO. We capitalized and built the company together, over a period of 10 years. He was a youthful 23, and I was a slightly less youthful 35! For both of us, this was the genesis of what became long-term careers serving the insurance industry.

But my involvement with Archipelago is motivated by a lot more than nostalgia. I’m a great fan of the company’s focus. There are very few InsurTech companies that are addressing the large commercial sector. Most of the insurance-related ventures formed in the past 5-10 years target personal lines and SME, and most of these emphasize distribution and the customer experience. These are valuable problems to address, and they are the opportunities most visible to the tech entrepreneurs. I share their enthusiasm - I have loved my involvement at the likes of Lemonade, and I’m impressed by how willing the incumbent personal lines companies are to recognize the need for change.

Tackling systematic change in the large commercial sector takes a team that has spent time in the trenches of the market and truly understands the pain points of the insurance buyers (the risk managers), the brokers, and the insurance underwriters. This requires an appreciation for the entire value-chain, with a healthy respect for why and how work currently gets done; not naively, as in “I have an algorithm..." but how technology and data can slip comfortably into how the market currently works, and then drive change from the inside out. 

Changing how complex markets work is a daunting challenge, but it’s been done before, and it will be done again. The large commercial insurance market is vast, essential to a resilient economy, and now more than ever needs to empower risk managers, reduce execution costs, and open the door for innovative new solutions for the benefit of all involved.

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"This requires an appreciation for the entire value-chain, with a healthy respect for why and how work currently gets done; not naively, as in 'I have an algorithm...' but how technology and data can slip comfortably into how the market currently works, and then drive change from the inside out."

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