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Interview With Dr. Andrew Johnston, Global Head, Willis Re InsurTech

By Ronald Poon Affat

Reinsurance News, June 2021


Dr. Andrew Johnston is global head of InsurTech for Willis Re in Nashville. He heads a practice of about 30 people from various backgrounds charged with vetting hundreds of technology candidates on behalf of Willis Re clients, traditional insurers, or incumbents. He also represents a growing number of InsurTech clients who themselves originate risk. Dr. Johnston is also the author and editor of the WTW Quarterly InsurTech briefing. Recently, I asked Dr. Johnston a few questions about InsurTech.

Ronald Poon Affat (RPA): How are reinsurers engaging in InsurTech?

Andrew Johnston (AJ): A number of reinsurers are looking to the InsurTech community for various reasons. One such reason is that a handful of InsurTechs represent an alternative vehicle for traditional company investments—as InsurTechs are raising money, reinsurers are getting involved (through CVC vehicles, or third-party investors who manage a reinsurer LP). Certain reinsurers are looking to work with some InsurTechs who have developed technological tools that can be leveraged/utilized by the reinsurers themselves as it relates to modelling, portfolio optimization, data usage, etc. And perhaps most interestingly, a number of reinsurers are actually putting their balance sheets to work to support risk-originating InsurTechs—this is typically to support new kinds of products, or products with unpredictable tails (where loss history data is lacking).

RPA: Why are they engaging in it?

AJ: Somewhat cynically, the macro environment of our industry almost expects that reinsurers engage with InsurTechs in some shape or form (in the same way insurers are expected to also). This is both an outside pressure, but also emanating from shareholders, leadership and key internal individuals—pretty much every single reinsurer in the world has a designated InsurTech individual, all the way through to a full team, tasked with making sure that technological opportunities are not missed, and the reinsurer in question is up to speed on the latest developments. More directly, InsurTechs can represent a good investment opportunity (traditional and balance sheet) for reinsurers as there is undoubtedly a heightened valuation in this space at the present time. It also presents reinsurers with an opportunity to diversify their risk portfolio. In a handful of cases, we have observed reinsurers utilizing the underlying technology as well, but perhaps unsurprisingly, most InsurTech is not looking at the scale and breadth of issue that pertains relevant to a global reinsurer.

RPA: What type of trends are you seeing?

AJ: Reinsurers are getting better at knowing what they want from the InsurTech space—their success criteria has been formalized, and they are becoming more accustomed with the space (and therefore improving their vetting mechanisms, etc.) More broadly, there is a quarter on quarter uptick into InsurTech investment, and reinsurers are playing their part in this. More reinsurers are participating in quarterly investments (and globally, more nations in general are participating). We are still observing a lot of early stage investment and bigger rounds of investment are happening earlier (e.g., in Q1 one unicorn making rounds happened at Series C, where they might happen at D or E). This would not be possible without the support of reinsurers.

There are more risk-originating InsurTechs now than have existed before, many of whom have very strong relationships with reinsurers.

RPA: What products have been brought to market and how are they being used by reinsurers?

AJ: In terms of “insurance product sold,” the best example is cyber. We have seen a number of cyber products come into the market that purport to be better reflections of the underlying risk (which is itself a constant moving target)—embedded in portfolio optimization, threat detection, etc. It is worth noting that cyber is a good example of where InsurTechs are incumbents operating on an even playing field given its nascency as a class of business, and its fundamental reliance on technology itself. We have also seen products come onto the market that respond to time triggers and class changes—good examples of these are associated with ridesharing, the gig economy and real-time asset swaps. In a fewer number of cases, we have seen some interesting products (better described as tools) being developed by InsurTechs that support reinsurers’ historic business metrics—a good example would be the evolution of macro spatial imagery/data to provide a better view into issues surrounding natural catastrophes.

RPA: Are there any particular success stories you’d like to comment on?

AJ: For reinsurers specifically, it is hard to call out one specific example. Where we have seen an unlocking of opportunity for reinsurers is the growth of digital product exchanges and digital distributive brokers who are looking to offer micro-BOP/SME products that have historically been very low margin, but with the advent of technological distribution, have seen a resurgence in economic delivery. These exchanges and product providers are looking to offer competitively priced products at scale (delivered through digital interfaces that seek to massively reduce the timing from quoting to binding/issuing), and most of the well-known InsurTechs, for example, Next Insurance, have bigger reinsurance backing to achieve their volume aspirations. With technology helping to maintain more of the margin of profit, this represents a very healthy opportunity for reinsurers.

RPA: How is success being measured?

AJ: This question is not being asked/interrogated enough. For the most part, InsurTech/reinsurer success metrics do not make sense when viewed through a traditional lens. Most InsurTechs do not have profitable business models, and have less than flattering combined ratios. If, however, a mark of success is “keeping up to date,” most reinsurers are doing a fine job of this. Similarly, many have equity in businesses that have very impressive (albeit questionable) valuations, and InsurTechs who are going public are getting a lot of attention from the public.

RPA: Have you seen reinsurers miss opportunities that could have been resolved by InsurTech?

AJ: Yes, we have. Particularly in areas where technology can really play a role. More specific examples of this would be the protection gap issue, risks associated with pandemics, parametric insurance, microinsurance products (and services), and service delivery in less mature markets. Reinsurers are not alone in this, but of the 4 billion people who do not have access to basic insurance services, 80 percent of them have access to a smartphone; this should be an opportunity that is being seriously reviewed in light of the role that technology is already planning in the lines of business previously mentioned.

RPA: What lessons can be learned from those missed opportunities?

AJ: Perhaps the biggest lesson is to review the process in which “new” opportunities are reviewed. As an industry we have a tendency to view new things through old lenses (for good reason). With anything new, we have to take a different approach (to risk) and understand what success might look like in the short term, as well as the long term. With the dawn of technology firms looking to enter our industry with increased speed and volume, we would be well placed to look to bridge the gap between what success looks like when two disparate worlds come together.

RPA: How is 2021 shaping up for InsurTechs?

AJ: We already have observed unprecedented rates of investment, the pandemic continues to spur on digitalization, and we are seeing more businesses looking to go public. Furthermore, there is a greater emphasis on InsurTechs who focus on the B2B and distribution space.

RPA: Any other points you’d like to make?

AJ: We are wary of the dilution of the term “InsurTech.” As we are increasingly technologically enabled, are we actually less in need of a term that specifically references this? And if so, are we in danger of masking what is happening in reality by using an increasingly irrelevant term? The other point that we would like to make is to call attention to the constant increase in early stage companies raising money: This would indicate that there is still an abundance of investment capital looking for grey matter, but is not necessarily a positive indicator of the true long-term impact that InsurTechs might have for our industry.


Statements of fact and opinions expressed herein are those of the individual authors and are not necessarily those of the Society of Actuaries, the editors, or the respective authors’ employers.

Andrew Johnston, MA, Ph.D., is global head of InsurTech for Willis Re. He can be contacted at

Ronald Poon Affat, FSA, FIA, MAAA, is CEO for RGA Brazil. He can be contacted at