Cyber continues to be a fast-evolving risk. But Phil Edmundson, founder and CEO of the Boston-based InsurTech-focused managing general agent, said his company’s strategy takes that into account.
“The fact that cyber is fast evolving is certainly a factor in how we approach underwriting and delivering value for policyholders, but ultimately we at Corvus want to make the world a safer place, and providing cyber insurance products that help policyholders predict and prevent loss is a significant way to pursue that mission,” Edmundson said in response to a series of emailed questions from Carrier Management Editor Mark Hollmer.
Corvus recently raised $32 million in new financing and it has pulled in $46 million to date. The company, which centers around commercial insurance, said its cash infusion will, in part, help propel growth among existing product lines and help accelerate development of new technologies and tools that will improve risk management in complex cyber risk and other areas.
To help make that happen, the company employs 50 people nationally and plans to triple that number within the next 18 months, Edmundson said.
Below, Edmundson dives deeper into why the cyber space matters and how he sees InsurTech as helping Corvus grab its share of the fast-changing market.
Q: What is the attraction of the cyber space, considering its high level of rapidly evolving risk?
Edmundson: Just this month, a survey of business leaders rated cyber risk as the No. 1 business risk for the first time [as per this Allianz survey]. Attacks have risen steadily in frequency and cost to victims of these attacks.
That alone deserves attention and effort by the commercial insurance industry, if we are serious about helping organizations mitigate risk.
Q: What makes Corvus unique in the InsurTech subspace?
Edmundson: Corvus was founded on the idea that we can make commercial insurance smarter by analyzing novel sources of data and using those insights not just to drive underwriting but also to empower brokers and policyholders to better predict and prevent loss. We have a deep understanding of insurance and how it is distributed, combined with experience in building technology. It’s that combination that leads to product offerings that are differentiated from top to bottom: from the data science-driven underwriting process to the online experience for brokers; from the coverage we offer to the risk mitigation reports (what we call Dynamic Loss Prevention) and value-add services we provide.
Q: Can insurers keep up with cyber risk?
Edmundson: For many traditional insurers it will be difficult. Sourcing new kinds of data, analyzing the data and translating it into underwriting processes — all very quickly and constantly — goes against the principles that underpin traditional insurance. That is one of the ways in which we are able to differentiate our offerings at Corvus, because we built the company from the ground up to do all of those things.
Q: Can cyber risk be drastically reduced?
Edmundson: Corvus can greatly reduce the risk of certain types of attacks. But I don’t see the overall level of risk changing drastically in the near future. Cybercriminals are smart and motivated, as it’s a lucrative business. They will continue to find new forms of attack as long as organizations are conducting business on the Internet. We will fight back.
Q: How does your approach keep pace with or ahead of cyber risks?
Edmundson: Our data science team, working hand in hand with our underwriting team, is constantly monitoring trends and seeking sources of data that can inform our model. There’s a human element to that, and we’re fortunate to have talented data scientists and underwriters on our team, but we’re only able to scale those efforts through the use of AI techniques like machine learning. This enables our underwriting know-how to be applied across massive sets of data that keep our model up-to-the-moment. We are also equipped to alert our policyholders when unexpected vulnerabilities present an urgent risk during the policy year, helping them take steps to avoid a cyber event.
Q: Some MGA InsurTechs in recent years have evolved into full carriers. Is that your path?
We are currently able to progress and grow our business more quickly by working with our carrier partners as an MGA. That may change in the future, but for right now the flexibility of the MGA model is ideal for what we’re seeking to accomplish.
Q: What is your biggest hope for your company in 2020?
Edmundson: We hope to bring our Smart Commercial Insurance approach to more lines of insurance that are underserved by data- and technology-driven approaches. That means finding ways to leverage data to predict and prevent claims — not exclusively in cyber – as well as offering our Smart Cyber coverage as an endorsement in lines where “silent cyber” risk is leading to cyber exclusions and increased risk for policyholders.
Q: Will there be another financing in 2020? If so, when?
Edmundson: No comment.