Combined Ratio Solutions Co-Founders Michael Jones, Chief Executive Officer and Luke Magnan, Chief Operating Officer spoke with MetroHartford Alliance Content Manager Nan Price about their experience launching an InsurTech startup and the importance of locating their business in Hartford.
NAN PRICE: Give us a little context about when and why you launched the company.
MIKE JONES: Luke and I had spent 20 years working in various facets of the insurance industry on the agency and carrier side. We had both segued into the technology side, where we met around 2012 when we were working on similar project at the same organization. As that company was getting acquired, we saw an opportunity for us to build our own company focusing on the insurance industry, which we had been part of our lives for so long.
Honestly, we thought we knew what we were going to focus on and we started down that path. As we started to expose our vision to the marketplace, we received positive feedback but we found there was another business problem that really needed solving, where there was a big gap in offerings. So, we pivoted pretty quickly. We’ve been working on that concept for the last couple of years. Then, in January of 2018, we formally started the company.
LUKE MAGNAN: Mike and I come from software companies that service the insurance industry. When we started thinking about going out on our own, we made a very conscious decision that we didn’t want to be a different type of software startup.
We saw a different path forward and we decided early on that we weren’t going to walk down the investment or accelerator path. We wanted to be a profit-generating company as soon as possible. So, we started the services side of our business to do that and to fund the software side. That approach enabled us to do some things I think other startup companies aren’t able to do, like finding our office space in Hartford and hiring people in Hartford and paying them good salaries.
NAN: Mike, you mentioned pivoting. Did the company experience any other pivots as a result of COVID-19?
MIKE: Because of what we do as a services practice, we help insurers with a lot of their technology needs. So, we’re well equipped to operate remotely. Even pre-COVID-19, that’s how we communicated with our customers. With the pandemic, we found that our customers needed an added level of help when they were constrained by remote work and the demands that come along with managing people virtually. They’ve leaned on us a lot more because they know we have the capacity and expertise to coach them through managing their teams.
So, in one respect we’re thriving through COVID-19 because of the nature of what we do for our customers. However, we have products we were planning to aggressively get out into the marketplace pre-COVID-19 and the pandemic slowed us down. It made it a harder sale.
A lot of times in our industry, you can make a big splash when you announce your product and its value and benefits at big conferences and tradeshows. Well, all of that went away, so we did need to pivot our strategy there. And, while we had planned to be in the marketplace in March, the pandemic enabled us to pump the brakes a bit and be a little more introspective about where we were going to position our product and the value it would provide.
NAN: We all know Hartford is “The Insurance Capital of The World.” As an InsurTech company, was that part of reason to locate in Hartford?
LUKE: We had some time before we needed to have a formal headquarters somewhere. Mike lives in Central Massachusetts and I live outside of Hartford, where I grew up. My first job was downtown at The Hartford. I spent a couple of years of living downtown and then I got my graduate degree at UConn Hartford downtown and I worked for Insurity, which is also in downtown Hartford. So, I had this sense for Hartford and a real desire to set up shop here.
MIKE: When we were deciding where we wanted to locate, we contemplated Boston, Worcester, and Hartford. As the non-Hartford resident, I’ve been impressed with the strong network community here. From a leadership perspective, I was impressed by the accessibility to have our voices Heard. We were able to meet with Mayor Bronin to discuss what our business would look like in Hartford. I don’t think we would have that experience if we went to Boston—and probably not in Worcester either.
LUKE: When Mike and I had the conversation about where to locate, Hartford won. There were two separate trains of thought. One is, like you said, Hartford is “The Insurance Capital of The World.” This is where big insurance companies are and there’s a history of insurance operations starting and being successful here. It’s something Hartford does and there’s a certain cache to being in Hartford. Mike and I spend a lot of time working with the European market and some big London-based insurers. Hartford is very much a big part of the map for them. So, having a Hartford address was significant.
The second thing is there’s also certainly a lot of talent here in Hartford. These big insurers have a lot of employees on both the business and the technology side. That makes it easy to tap into industry expertise.
MIKE: We’re excited about being in the community and in the insurance scene. We see that there’s a renaissance happening in Hartford in the insurance industry. Right now, we’re actively recruiting for some more talent and we’ve been impressed with the types of resumes we’re seeing.
NAN: Where do you see the benefits of becoming involved with the MetroHartford Alliance and the Hartford Chamber of Commerce?
MIKE: It’s given us insight into where to find the networks we should be tied into. Admittedly, we know these networks are accessible. But our involvement with the Alliance and the Hartford Chamber provides opportunities for introductions to people from all types of industries, not just insurance. It’s been a huge help for us to leverage those networks.
LUKE: With regard to the Hartford Chamber, at the end of the day, a rising tide lifts all boats. The more businesses that are successful in Hartford, the more talent comes in, the more young people come to live here. All of those things only help our proposition. So, being a member of the Chamber is an easy way to help contribute to that.