Matthew Grant talks to Phinsys Chief Commercial Officer, Stuart Conibear, to find out more about what Phinsys do and the impact they are having on the insurance market. This interview is an extract from a podcast recorded by InsTech London which can be found here.
Phinsys is focused on financial accounting, regulatory reporting, and analytical needs. What does that mean in practice?
Our CEO Richard Tyler spent many years inside ACE and Chubb looking at ways to streamline and automate manual finance and accounting processes that were holding the business back. We’re going back a decade or so but even then Insurers were increasingly demanding access to accurate and reliable financial data so that they understand how their businesses were performing. Richard developed a range of solutions that were designed to automate everything from front-end policy and claims systems, down to the general ledger. It’s these solutions that formed the building blocks of the product suite that Phinsys offers today.
In very simple terms our products eliminate the use of spreadsheets and associated manual processing and ultimately take data out of siloes into a single warehouse that supports enterprise-wide accounting and reporting. We see ourselves as being quite niche and there’s no-one really doing what we do, certainly in the UK and the London market.
What do your solutions provide that other people can’t do?
Rather than building bespoke solutions for each client, we felt we could design enough of a product that meant each time we go into a customer, 80% of the work is already there.
We spend the rest of the time focusing on what makes them unique, what policy admin systems they have, whether that’s a London market system like Eclipse or something more international like Duck Creek or Guidewire. We can conform to all of those data standards.
Are you helping clients tap into new sources of data? And are you helping them underwrite new products?
With Phinsys, it’s all about efficiency – doing things faster, more accurately, with fewer people. That has an obvious positive effect on Insurers costs and their ability to reduce the expense ratios that have been highlighted as major issues both inside and outside the Lloyd’s and London Market.
In terms of the insights that the data gives them, it’s all sitting in one place. Clients have a far more granular view of the way the business is operating, which lines are performing well or not, and the financial metrics. These often aren’t available from existing systems when companies are looking at underwriting and claims key performance indicators.
Is Phinsys brought in to work on projects alongside existing systems, or are companies looking to replace all of their financial accounting?
Historically, companies wouldn’t have a system for the areas we’re looking to address. Typically, they will be reliant on dozens of spreadsheets to solve some of these challenges.
More recently, even larger insurers that lack flexible finance processing systems are having to change what they’ve done in the past due to new regulations like IFRS. As I mentioned, we can interface easily with policy admin, claims and other systems but we’re not replacing those – we’re bringing something entirely new to the table that can have a profound effect on the way insurers operate their finance function.
You’ve got a very strong set of clients, so what attracted you to the PwC incubator that is historically geared around helping early-stage companies?
The way we felt to really grow was to find partnerships. I spoke to all of the big players, KPMG, EY, Accenture, and PwC was the one that had already put together a program specifically for scale-ups.
We ended up coming out of that signing a joint business relationship. I think we were the only one so far on that cohort to do that. Even though we’re not a start-up, to get to where we want to be will need more than organic growth and we believe relationships with the likes of PwC will help us scale more quickly.
What was your motivation for joining the Lloyd’s Lab?
We were struggling to get close to the people who mattered. Lloyd’s Lab is an opportunity to work with mentors that are passionate about driving the market forward. They’re opening their address books and introducing us to other people in their networks.
We have products, they’re live, they’re proven, but there are other things that we want to prove with those products. We would like to get the opportunity to work on the Future at Lloyd’s initiatives, such as wider data integration or to prove out a new business model.
There have been some high costs involved with system integrators in the past. How easy and cost-effective is it to plug into Phinsys products?
We’ve proved that we’re very good at it. We can take very large volumes of data into our systems, process it and push it down to where it’s most needed.
APIs will come, but until managing agents and larger insurers have got those sorts of things in place, and with their continued focus on underwriting and claim systems, there’s no point in us moving first on that.
Is there anything you see that will enable you or the industry to change dramatically, with regards to either efficiency of workflow or access to data?
A lot of the capital in the London market is coming from large US insurers. They expect something better than data being driven by bureau messaging and the resulting lack of easily accessible, accurate and reliable financial information.
We’ve also seen that Finance Directors aren’t just demanding accelerated financial close processing but a move towards daily close. They want real-time data on the financial performance of the business rather than the time-consuming end-of-month close which the market has always accepted as the norm. Similarly, earning of premiums, ceded premium allocation, IBNR calculations and expense allocations – together with reporting of Lloyd’s MDC returns, Solvency2 Pillar 3, IFRS and UK/US GAAP figures – all demand a different approach as the finance team is being asked to do more, more frequently and in shorter periods of time.
In terms of InsurTech, or just regular tech, who do you like the look of and what characterises companies that are succeeding in this space?
The people that take it seriously realise the complexities of the market. There are clever individuals in insurance that have been trying to crack this nut for a long time.
It’s all about networking and relationships, and that goes a long way with the technology as well. Partnerships and eco-systems of services are the way forward.
We’re delighted to have you as a corporate member of InsTech London. What brought you along to our events?
We operate in a few different cities but London, by far, has the strongest community of InsurTech firms. New York has more InsurTech firms registered on paper, but zero communities because no one like the three of you (Matthew, Paulo and Robin) have taken the effort to try and do anything (yet!).
I’ve taken huge value from the presentations you’ve held and met some very interesting companies. Joining as a corporate member allows me to invite others in the team that are interested in meeting potential partners and clients.
It’s effectively training for them because they will hear things that impact the way they work for us and help them bring new ideas to the table.