Data is at the heart of many decisions in insurance - pricing, risk mitigation, claims and capital management. But data needs to be high quality - and that requires constant diligence.
CEO and founder of Atticus DQPro Nick Mair is Matthew’s guest on Episode 66. Nick talks about how he has successfully built a business, with no external funding, and which in only a few years has signed up a number of major insurance companies to help them manage and measure data quality.
Their conversation covered:
- The awareness and adoption of data monitoring tools
- Building a business without external investment
- Making B2B sales to commercial insurers
- Learning how to define and build products
- Tips for aspiring founders
- Podcasts and book recommendations
- The pros and cons of accelerators and incubators
Delivering Data Certainty - Episode 66 Highlights
Matthew: What does Atticus DQPro do?
Nick: DQPro is monitoring software primarily for specialty and commercial insurers. We plug into legacy systems and monitor the data related to underwriting and compliance. We help business users fix any issues identified and wrap it up with the audit capability that is needed in a regulated environment.
It's a bit like the parking sensor in a car. DQPro identifies potential problems and alerts users before something causes a problem. We use automation to identify data issues and speed the whole thing up saving time, money and bandwidth.
We hear a lot about new uses for big data in insurance, but most of the new companies are offering ways to access new data or get new analytics. Is it harder to get attention for a data monitoring tool?
It varies. If you look at the London market, there's a bell curve in terms of awareness and adoption. Large carriers with innovation arms like AXA XL, Hiscox and Brit are doing interesting things and tend to get what we do slightly faster. Other companies are still struggling to work out what innovation means or are just trying to stay alive in the current market.
What’s common to all of them is that they need a foundation of great data and controls in place to be able to use everything InsurTech promises. Whether that’s artificial intelligence or predictive analytics, you can’t realise the capability until you’ve got that firm confidence in the underlying data.
What gave you the motivation to launch DQPro?
We started by providing consulting and resourcing services, mainly to the London market. Running a people business has challenges and we were keen to move into a product that was more sustainable and recurring from a revenue perspective.
We knew there was a big problem around data and controls and how carriers check that data. That gave us the idea for DQPro. I pitched a deck of six slides to six managing agents and all of them thought it was a good idea. Brit was the first carrier to commit to work with us and put some money in the hat too. We worked with their users on prototyping s before a full launch in 2016.
You've chosen not to go for external investment. What drove this decision?
We were fortunate in having our own cash from the consulting business. We used that money to give us the equivalent of a seed funding. It saved me having to look to fundraise, which as any founder knows, is a challenge and takes up a huge amount of time.
Jack Dorsey of Twitter says "constraint inspires creativity". Are there benefits from having a limited amount of money, particularly when it's your own money you're spending?
It forces you to think very hard about the problem you're solving and ensure that it's worthwhile. Upfront validation with customers is key. We were very careful not to cut a single line of code until we knew we had something valuable, that solved a pain point, that was something that people wanted. It gave us tremendous focus on the problem area that we were solving.
As a small team, we also have to be able to wear many hats and do several different things and I think we've been able to do that very successfully so far.
What have you learned about making that B2B sale when you sell to commercial insurers?
Selling into big insurance companies as a start-up, even if you have industry experience, is incredibly challenging. There's a high hurdle in getting to the right people quickly and then getting through the various steps. It's a common complaint with start-ups that the sales cycle is too long. Our fastest has been four weeks and our longest has been just over two years.
If you have a good understanding of the problem, who needs it the product and why they need it, that's a good starting point. Then it's about building a sales funnel to move people to a pilot and ultimately sign a live production contract.
For anybody listening from an insurance side, particularly those in innovation roles, what would your request be to them to make life easier?
Any carrier that's serious about innovation needs to make sure someone is responsible for dealing with innovative opportunities. Someone who understands what that means, who understands how start-ups work and the processes and constraints of which they work by.
The other aspect is around procurement. Start-ups have to deal with a very traditional, large company process. We've had 200-page contracts and heavy legal involvement. There must be a lighter way of doing things, especially when just running a pilot.
A lot of companies in the early stages go through incubators or accelerators. Why have you not done any of those?
For us, we had funding and early customers and we were able to get things moving. All the things that come with an accelerator just didn't quite add up for us. Because of the stage that we're at now, as a scale-up, we're considering whether this could be the right time.
We like the Lloyd's Lab. There's also a couple of good ones in the States. The US specialty market is a big potential market for us and as a smaller business, it's harder to move into, so an accelerator is a great way of increasing our exposure.
You didn't come from a product background. How have you gained the knowledge to enable you to define and build products?
I had to be self-aware enough to realise I had to go back to school. I read a huge amount about software development and what it takes to start and grow a software business. I spoke to other founders; I went to conferences like MicroConf and I consumed hours of podcasts.
We had a stroke of luck in terms of our development team. I'm incredibly fortunate that we were able to hire great people them and get them on board.
We talked about Lloyd's in the context of the lab. 'Blueprint One' mentions data and processes and regulation significantly throughout. What's your view?
I'm quite positive about the “Future At Lloyd’s”. The fundamental position is the London market has to change if it's going to survive and move successfully into the next few decades.
Data is one of the key foundations, but the big challenge Lloyd's has is that it's in control of where that data comes from and who produces it. The market needs to think about how to incentivise the broker to provide great data. The further upstream they can solve that problem, the better for everyone down the chain who consumes that data.
The challenge is always on these things, where does this fit on the list of priorities for people?
There are data disasters happening pretty much all the time, several big ones a year. Some you hear about in the press, but there's stuff that happens below the surface.
Some of our fastest sales have been where someone has an internal issue with the potential to cause problems. They recognise they needed software to prevent that happening going forward, so we help them reduce the risk significantly and deal with it in a better way.
You run a business, you’ve got a young family and you split your time between Lisbon and London. How do you focus yourself to keep learning?
I'm making good use of my plane time. I fly six hours a week and so it's about trying to make sure that I can read and get my podcasts in. I spend a lot of time with other founders and senior people in the market that I'm lucky enough to know, who've helped from a mentoring perspective.
I think it's important to take some downtime too because the journey as a founder is not an easy one. I like getting out there and into the outdoors, I like my fly fishing.
What podcasts or books would you recommend?
I'm a huge fan of 'Start-ups For the Rest of Us,' that's with Rob Walling and Mike Taber. It’s a great podcast that's been running for almost 500 episodes now. That's essential listening for anyone who's looking to build what I'd call a non-venture track business. 'Start-up Chat' with Hiten Shah and Steli Efti is also great and covers a range of topics around start-ups and founders and Hiten has a great newsletter as well.
I like 'Inspired' by Marty Cagan. It changes the way you think about building products. It's about how to build products that customers love and it's all about the whole team view. I also really loved 'Obviously Awesome' by April Dunford and that's all about product positioning. It's this notion that you need to be able to explain what your product does in the minimum amount of words so that customers get it, buy it, love it.
Finally, you are a corporate member of InsTech London. What made you get associated with us more closely?
You were there right from the start and ran some of the very first insurtech events. It's been really good to see that mature. I enjoy the evening events when I can make them and the feedback's universally positive. I like your podcast and you have a good newsletter too.
What you've done is to coalesce everything into one community and it's valuable. Whether you're a founder, a carrier or you just want to learn more about Insurtech and how the world's changing.
For more information on Atticus DQPro, vist atticus-associates.com