The Future of Insurance – Juan de Castro, COO, Cytora

The Future of Insurance

Juan de Castro is COO of Cytora, leading product strategy, sales, distribution, partnerships and operations. He was previously UK COO at Hiscox (FTSE100), and lead Group Strategy and Corporate Development at the Group level, reporting to the Group CEO. Before moving into Insurance, Juan was a senior manager at McKinsey’s Silicon Valley office, focusing on growth strategy and operational improvement engagements for Fortune 100 companies. He worked across a number of different industries, from Tech to Utilities and Financial Services, with a special focus on digital strategy and operational turnarounds. A Computer Engineer by training, he started with a technical career owning P&L responsibility in a professional services division, building and leading engineering teams. He holds a Master’s degree from Stanford Graduate School of Business and a Computer Engineering degree from Universidad Complutense de Madrid.

Highlights from the Show

• Juan came to Insurance from consulting in Silicon Valley, and admits he didn't realize how much he didn't realize that justified the sense some have of the industry being behind, like not knowing the cost of the goods you're selling when you sell it
• He also found that we spend a lot to bring customers in, only to decide they're out of appetite, especially in the direct channel, where his carrier work focused
• Serving as COO of Hiscox UK, he focused a lot on the expense ratio, but worked on driving up premium per underwriter rather than cutting costs, which he sees as less sustainable or impactful
  • He found getting the data you really need to do this is hard, like where underwriters spend their time or lose it
  • Once you had the data, you had limited tools to deliver on what you discovered, like how to identify the right risks quickly and then get them to the right underwriters
• Juan sees a growing focus on the end-to-end workflow of underwriters, much like how manufacturing transformed in the Industrial Revolution
  • New tools enabled the flow of work and automation
  • New energy enabled speed and deploying tools that weren't possible before
  • Automation allowed the new fuel and tools to push product through the system
  • This is actually very similar to how underwriters work, and we're in the midst of the same type of drivers coming online
    • New tools, like AI and Gen AI
    • New fuel, meaning better internal and external data
    • New ability to deploy automation that didn't exist before, so risk can flow (which is the idea behind Cytora's podcast that Juan hosts, called Making Risk Flow)
  • This is a moment where underwriters can rise above the transaction to focus on macro-level issues and engage with brokers
• In the mid-market area that Juan and Cytora focuses, he talks about 10 Click Underwriting
  • This is about using tools to remove the excessive number of steps and handoffs internally so risks can come in and be quoted within hours instead of days or weeks
  • This includes using third party data and artificial intelligence to take in submissions, analyze and prioritize them in conjunction with a rating engine, to present prioritized opportunities to underwriters with the transactional work done for them
• When it comes to AI, Juan is interesting in enabling both the early adopters and those who are on the sidelines, unsure of what to do
  • You need to have the right controls and safeguards, like not sending proprietary data to the LLMs to protect carrier's IP
  • LLMs allow carriers to overcome historic roadblocks to digitization, with three examples he shared:
    • Ingesting submissions from brokers and taking the insights from them without having to train models on hundreds or thousands of examples
    • Mapping data, once extracted, so your internal systems can understand, like taking in varied occupancy reports in a way that informs a rating engine and record of risk system without a person having to make sense of it
    • Bring together UW guidelines and the book of business to help guide underwriters on how to handle a specific risk – something you'd need years of coaching, shadowing and training to achieve otherwise
  • Juan thinks the horizon for adoption of AI is different from past technology like IoT because the benefits aren't theoretical, they're real, tangible and demonstrable, so he believes the industry will move faster here

This episode is brought to you by The Future of Insurance book series (future-of-insurance.com) from Bryan Falchuk.

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Music courtesy of Hyperbeat Music, available to stream or download on Spotify, Apple Music, and Amazon Music and more.