This article is part of a series of interviews with InsurTech Executives involved in the distribution of property/casualty insurance about their missions, how they are changing the industry, and the implications for carriers.
View All InterviewsHyperion X, might not fit some definitions of InsurTech, which typically refer to standalone startups backed by venture capital investors.
But like startups that easily fall under the “InsurTech” banner, the technological and analytical branch of Hyperion aims to disrupt traditional insurance distribution. Describing itself as “a unique insurance group with employee ownership at our heart,” Hyperion—itself a combination of an international retail brokerage firm, a specialty and reinsurance broker, and a global specialist MGA group, recently hired David Flandro to manage the analytics unit at the center of the disruption.
Flandro authored an article for Carrier Management titled, “High Distribution Costs and How to Fix Them,” and he answered some questions we posed about Hyperion for our “InsurTechs to Watch” feature.
1. Describe your company and its mission. What does the company do?
David Flandro, Managing Director, Analytics“Hyperion X has been brought into existence to disrupt the current marketplace in favor of Hyperion’s brokerage clients through technological innovation.”
Related article: High Distribution Costs and How to Fix Them (written by Flandro)
David Flandro, Managing Director, Analytics, Hyperion X: Hyperion X believes that technology and analytics can lessen the need for carriers to pay high costs to an intermediary for bundled acquisition and relationship services, offering alternatives such as digital marketplaces and underwriting facilities underpinned by untapped sources of data.
Hyperion X envisions a world in which data by region and line-of-business, particularly in commercial, specialty, and reinsurance lines are just as ubiquitous, consistent, and widely available as in other capital markets. In this environment, risk will be traded freely using new and more efficient transfer mechanisms.
2. Who does your technology serve? (Agents and brokers only; Agents, brokers and carriers; customers directly, etc.)
Flandro (Hyperion X): Hyperion X is the technology and analytics branch of Hyperion, a privately held international broker. Our technology serves the Hyperion companies (brokerage and MGA operations), carriers and customers.
3. Who pays for the technology you offer? Is the cost considered commission income or a service fee?
Flandro (Hyperion X): We are agnostic, and our remuneration is based on value, not time and materials, further incentivizing us to deliver fast, impactful solutions. Our fees and expenses are a fraction of the value of the typical solution. We seek to provide returns of over 500 percent of any consideration on average, and we offset project and retainer fees with new transactional revenues whenever possible, mainly because we want to get close to our clients so we can better service them.
4. Are you disrupting (replacing) or empowering traditional distribution?
Flandro (Hyperion X): Hyperion X has been brought into existence to disrupt the current marketplace in favor of Hyperion’s brokerage clients through technological innovation.
5. What should P/C insurance carriers know about you?
Flandro (Hyperion X): Hyperion has several initiatives underway to lower carrier acquisition costs, to help carriers find new risks and to help them underwrite efficiently.
• The current process of connecting insurance buyers and brokers with capacity is too slow, too costly, and involves too much manual data entry and look-up. Hyperion’s xTrade Digital Marketplace (XDM) connects brokers and carriers on modern cloud applications. XDM allows carriers to select additional risks they may not be aware of at much lower acquisition costs using rating engines and machine learning together with external and internal sources of data.
• The Rethink facility is a single-entry data portal which is integrated with London market IT systems including Lloyd’s PPL. Also powered by Hyperion X technology, Rethink creates lower cost digital placement which is underpinned by high-quality data and underwriting. Business is underwritten at a predetermined level using five years of loss data contained in Hyperion X’s Accelerator platform. Insurers benefit from a streamlined underwriting and claims processing costs, creating premium reductions for clients. Participants can see gross and net exposures, premiums and losses as they occur.
• Hyperion X’s Analytics offering, HXA, utilizes a powerful database to allow clients to penetrate areas where public and competitive data are not normally available, and to offer advice on capital markets, shareholder value, strategic growth, ratings and regulatory capital.
The goal of all of the above is to lower clients’ acquisition costs, cost of capital and thereby to increase shareholder and stakeholder value.
6. Bonus Question: What does the future of commercial insurance distribution look like?
Flandro (Hyperion X): Emerging leaders in the insurance industry will need to optimize distribution for profit at the lowest possible cost in order to compete and win. Hyperion X is committed to leading the change currently taking place in the sector. It recognizes that intellectual capital, especially data and technology deployed on behalf of clients, is the most efficient form of capital.
With the increased use of technology, more and more data-driven products will appear. The market is already beginning to transform for those who know where to look. Insurers will be able to make smarter decisions from data insights. Brokers will be able to leverage their data to match business with clients more efficiently and effectively. Hyperion X will be in the center of this trade.