Why are we building Joshu?
When people ask me what do I do for a living there’s always that moment. The moment I mention insurance. The curiosity level drops to zero and there’s an awkward silence. If insurance is not the sexiest conversation topic, building software products for insurance companies is even less so. In some cases the next question would be: “how did you end up in insurance?”
The first time I encountered insurance was in a microeconomics classes in college and grad school. Basic models on a whiteboard showing how pooling different risks together yield better results. Insurance saves people from financial devastation. There’s risk everywhere and sh*t happens. It happened to farmers whose crops were destroyed by hail. It happened to traders in ancient Greece whose ships sunk in the mediterranean. But when many farmers or traders banded together to set aside a little bit of money and pay it out to whoever got hit by bad luck it changed their lives forever. It provided a new safety net that made it easier for more people to engage in economic activities that are inherently risky. Insurance helped existing businesses stay alive and reassured people they could start new businesses.
The second time I encountered insurance was as part of a startup I joined, At-Bay, that sells cyber insurance to businesses. I descended the ivory tower of the economics department to the front lines of selling insurance. There, you spend less time pondering about the virtues of insurance and more time figuring out how insurance is actually sold and how to make it better.
Putting a piece of paper on a table in a London pub and having people with money sign under it is one way to sell insurance that worked in the 19th century. Waiting for the fax machine to print the next submission and rushing it to an underwriter was how it was done a couple of decades ago. What was quite a surprise for us was that in 2020 commercial insurance is still mostly transacted over emails and PDF attachments.
While most of the world has moved from offline and email transactions to online stores on the web or your mobile device, commercial insurance as an industry is not there yet. Indeed, some very successful startups have changed that mindset and used modern experiences to sell commercial insurance better. But they still represent a small fraction of policies and premiums. Incumbent insurance companies offer great coverage, risk expertise, claim handling, and deep relationships, but most are lacking in their digital offerings.
This is not (just) about delightful online experiences. Unnecessary human intervention where it is not necessary introduces friction that everyone suffers from. Carriers employ or outsource data entry clerks whose job is to enter data from one format to another. Brokers spend too much time moving attachments and emails from one place to another. Insureds have to wait for their submissions to go through the opaque pipelines of a complex ecosystem before they get quotes back.
Not everything can be automatically underwritten, but there is a large segment of businesses that can and should be. Carriers need the tools to set up and adjust how their products are underwritten automatically. With Joshu they can do it independently and quickly so they can experiment and gradually improve their insurance products, their automatic underwriting, and the digital experiences for their clients.
Shimi and I started Joshu because we love building software products that make their users more productive and happier. Commercial insurance presents so many opportunities across so many insurance lines and segments. Complex insurance products, ecosystems, and processes are very slowly changing and adapting to new ways of doing business. We’re building Joshu as a catalyst and an agent of change. We chose to enable incumbents rather than to compete with them. With Joshu, incumbents reimagine how they sell commercial insurance online. Just like designers or engineers have software products that were designed and built for their needs, we believe insurance professionals deserve world class tools and platforms to sell their products online.