By Russ Banham
Carrier Management
Ron Glozman has always been a problem-solver, a good skill to have as a tech visionary creating companies that automate manual processes in the insurance industry. Once the business is launched, he’s already thinking about the next one.
In 2014, Glozman founded Chisel AI, a real-time data extraction tool that identifies submissions that align with a carrier’s book of business. Prior to that, he founded Knotes, a machine language tool that “reads” college textbooks to provide a one-page summary of each chapter within. The app tallied more than 10,000 users across 33 countries and was named one of Google’s top 50 apps. He parted ways with Chisel AI in August to work on his next digital project, FindOffMarket.ca, an online wholesale real estate investment platform.
It may appear that Glozman is a workaholic who just can’t stop building companies. The truth is otherwise. “My favorite quote is ‘hire the laziest person for the hardest job and they’ll find the easiest way to get it done,’” said Glozman. “In some way, being lazy has always been my superpower. Given my background in software development, I can’t help but look for optimizations.”
Glozman is just one of hundreds of tech visionaries, many of them in the InsurTech space, who come up with a viable technology solving a work problem, draw up a business plan, attract funding to commercialize the concept, and then rinse and repeat. Such serial entrepreneurship is “a burning itch that needs scratching,” he said.
Other busy InsurTech entrepreneurs like Dogan Kaleli chalk up their scratching to unrestrained curiosity. “I can’t let go when I see a problem until I find a solution,” said Kaleli, founder and CEO at Stere.io and before that Nion, Wanderfly and Connexa Network AG. “When I headed up North America program business for Allianz early in my career, I was the guy that others reached out to, to ask, ‘Can you find a better way to do this?’ Once I find it, I’m looking for the next problem.”
Daniel Demetri can relate to these experiences. The founder and CEO of Trellis previously co-founded another InsurTech, known today as Doma. Prior to that, Demetri was a product manager at Google. Between 2012 and 2014, he led a team entrusted with making Google Maps faster, smoother and more informative but was feeling down for some reason, he said.
“I realized that on the Maps team, everyone’s opinion was equally valid, and I didn’t have a particularly outsized thing I was influencing,” he explained. “Then, I realized that what excited me was the intersection of technology and financial services. I wanted to explore this intersection by creating new operating models.”
A Seller’s Market Beckons
For entrepreneurs like Glozman, Kaleli and Demetri, InsurTech is a great sandbox to play in. “All these entrepreneurs with technology backgrounds constantly thinking of new ways to disrupt the status quo has made InsurTech a shining light in the insurance industry,” said Julia Lamm, partner in consulting firm PwC’s Workforce Transformation practice.
These “new ways” are apparently endless, prompting the rinse-and-repeat actions of many InsurTech entrepreneurs. Given a ton of unspent cash available among venture capital and private equity firms to invest in new ideas, it’s a good time to be an InsurTech entrepreneur. Global InsurTech funding reached a record $7.4 billion in the first half of 2021, surpassing the $7.1 billion raised for all of 2020, according to a July report by CB Insights and Willis Towers Watson. Prospects ahead are equally bullish: Grand View Research recently projected a 48 percent compound annual growth rate in the global InsurTech market through 2026.
Put into perspective, inventors of a sharp new technology tool automating a complex carrier process like underwriting, pricing, quoting or claims management will easily attract the attention of venture capital and private equity firms. So will the creators of tools designed to enhance the customer experiences or provide analytic-driven insights into wide-ranging data. Their “Shark Tank” moment awaits.
Yet, what is it that separates serial tech entrepreneurs from their forebears like Bill Gates, Steve Jobs and Jeff Bezos, tech visionaries who created some of the world’s largest companies and stayed on as CEOs for many years thereafter? One possibility is that founding an InsurTech startup, scaling the company and running its day-to-day affairs are three different skillsets that don’t always reside in the same individual.
“It’s not uncommon for an entrepreneur to find that building something is different than running a company on a day-to-day basis,” said Lamm. “When that happens, they start thinking about building something else.”
This progression is especially the case among founders in the InsurTech sector. “Once the company is well on its way, founders often realize the role they are performing no longer fits their skillset,” said Adrian Jones, partner at venture capital firm HSCM Ventures.
Unlike tech visionaries in the past, Jones said most InsurTech companies are founded by a team of people. “The lionized image of the extraordinary founder who breaks down walls and builds fabulous companies singlehandedly is a bit of a myth,” he said. “Typically, I see anywhere from two to five people joined together as a founding team, each with a specific skill like finance, technology, insurance or operations. That’s the more common model.”
When any one of these individuals leaves, the departures are amicable, said Jones. “Since a founder often has a material ownership in the organization, as the company evolves, it’s in their best interests as an owner to step aside, find a better person to assume the role, and go out and do other great things,” he said.
Lamm agreed. “Founders have a natural affinity for the thing they founded, and often like to remain involved in the business, post-departure,” she said. “While you don’t want them lurking around disrupting the authority of the person that’s replaced them, given their problem-solving skills it’s a good thing to keep them involved.”
Scratching the Itch
Solving business puzzles keeps Kaleli awake at night contemplating out-of-the-box ideas. In 2010, he co-founded Wanderfly, a review-driven web platform for discovering and sharing personalized travel recommendations. After the company was acquired by TripAdvisor in 2012, he founded Connexa Network AG as an online platform bringing together educators, students and alumni in a shared and collaborative learning community. The former actuary then decided to work a full-time job at Allianz, ultimately becoming the co-chair of its global facilities programs practice.
In 2020, he left Allianz to launch Nion Network, a global online network connecting insurance professionals with InsurTech innovators to develop next-generation solutions. In May, he founded Stere.io, a digital ecosystem making it easier and faster for MGAs (managing general agencies) to source insurance capacity. In just five months, Stere.io had onboarded 30 MGAs, representing $900 million in premium, he said.
Unlike other InsurTech entrepreneurs who diagram their ideas on a whiteboard, once Kaleli has studied a business challenge and developed a unique solution, he reaches out to colleagues and friends to discuss his ideas. “My thought process is to talk to people before I come to a firm conclusion,” he said.
This collaborative process is not unusual for someone who has launched several online networks. His own personal network is composed of people in the insurance business and outside it, as users may not be in the industry. The feedback he receives is often mixed, he said.
“I’ve had my share of failed ideas,” said Kaleli. “It’s a bit tricky when someone with experience whom you respect tells you your idea doesn’t make any sense or won’t work. But what I’ve found most important is to take the idea forward until you’re absolutely convinced it’s either a winning or a losing proposition. Most entrepreneurs tend to give up too soon.”
Demetri also casts a wide net in looking for specific solutions to insurer bottlenecks but pursues a different approach to feedback. “Typically, I come up with a list of ideas,” he said. “I don’t vet the ideas with others, however, preferring instead to test them. The question isn’t can I build the technology; I know I can do that. The more important question is will lots of people want it.”
To find the answer, he advertises his inventions on Facebook on a pre-order sales basis—well before the technology is ready for commercialization. “I haven’t built it yet, but the pre-orders tell me whether or not I should,” he explained.
Once built and up and running, he’s impelled to put on his thinking cap again. “There’s this intersection between what I want to do personally and what needs to be done in a company,” Demetri said. “The more there is overlap between these two things, the more engaged, happy and fulfilled I feel. If the overlap moves apart, I find it’s no longer a good fit for me or the company.”
Such feelings of separation occurred at Doma, which Demetri co-founded as States Title in 2017 and where he served as chief product officer. Doma is a full-stack title insurance company—”full-stack” in the sense that it comprises an insurance carrier, agency and technology platform that uses machine learning and predictive analytics technologies to rapidly and accurately close real estate transactions. In March, Doma became a public company through a merger with a SPAC (special purpose acquisition company).
Demetri had already left the organization in early 2019, following its merger with North American Title. He has no misgivings about the timing of his departure. “The company went from a 25-person startup after the merger to 1,000 people, seemingly overnight,” said Demetri. “As the chief product officer, I had the lateral breadth to feel confident in becoming a CEO. The timing was right to explore this opportunity.”
He wasted not a minute, founding Trellis Technologies Inc. a few months later. The company provides digital solutions that help consumers get more value from their automobile and home insurance by providing a rapid way for consumers to compare their existing coverage with other insurance policy alternatives. More than one million consumers have used the tech platform in the past two years. In June, Trellis announced it had raised $10 million in Series A funding from QED Investors and other venture capital firms.
Although confessing to a natural inclination for laziness, Glozman was fast at work in October putting the finishing touches to FindOffMarket.ca, which he said would “launch any day now.” The prototype he emailed over certainly suggested the online platform was ready to go live. Like his other creations, it eliminated a bunch of irritating manual processes, in this case involving the search for residential real estate to renovate and flip for a profit.
“I’ve always looked for opportunities to build something that people will be interested in and pay money to use,” he said. “I first felt the itch when I was 14 years old and music piracy had become this thing. Something like 19 out of every 20 downloads at the time were illegal. I had this idea that people would be willing to listen to ads to get the music for free. I got a bunch of songs, sold a few ads and created what I called FreeINGmusic.com, which had close to 100,000 users. But it was barely a breakeven business.”
Glozman is hoping his new venture rings the cash register. In the meantime, his mind is open to other ideas. “For me, the time to innovate again is when the team doesn’t need you anymore; you’ve built it well and its growing fine,” he said. “The CEO’s job, besides being the public face, dealing with investors and setting the vision, is fighting fires on a day-to-day basis. At some point, you’re no longer the fire chief. That’s a good thing as your team is doing the job and the business is self-sustaining.”
The time has come to move on, to scratch another itch.
Russ Banham is a Pulitzer-nominated business journalist and best-selling author.