Below is our recent interview with Neil Mitchell, Toronto insurance executive, co-founder and investor in Player’s Health and Advisor to Early and Emerging Stage Insurtech Founders & CEOs:
Q: You have spent 30 years of your working life in property and casualty insurance. Why did you choose insurance as a career path and why have you stuck with it for so long?
Neil Mitchell: That’s a great question and I don’t have a “one-liner” response to it. I would say the answer to “why?” was through pure happenstance. I was introduced to insurance by a good friend of mine, whose father and elder brother had successful careers in insurance. That friend really encouraged me to give it serious consideration. I was skeptical at the beginning, however, over time and through many discussions and meetings skepticism quickly shifted to interest.
From those early discussions I learned that Commercial insurance, in particular large accounts and group programs, have complex exposures and risks. Arranging insurance for these exposures and risks sounded like a strategic and quite frankly an intriguing process. A process that included sourcing, structuring and negotiating terms that formed a legal contract. The work sounded all-encompassing including a very international aspect for sourcing and placing insurance protection and alternative risk transfer solutions. With this information it didn’t take long for me to leave my pharmaceutical sales rep job, take a pay cut and head straight for my first job in insurance at Johnson Higgins & Willis Faber in Toronto.
In terms of the second part of your question, “why have you stuck with it for so long?” I was very fortunate to work with many exceptional managers and leaders who provided me with a lot of: insight, advice, direction and many diverse opportunities, experiences and perhaps most importantly challenges. A number of them also gave me “tough love”. In the moment that stung a bit, however sometimes like a good coach they knew how to push the right buttons – while they were not official mentors, they provided me, at the right time, with focus, direction. I suspect their “tough love” accelerated my development and growth.
One of them impressed upon me to be “a student of the game” – he encouraged me to know as much as one could about: clients, insurers and their appetites/capabilities, know the technical aspects of insurance contracts and build relationships with those you trade with and those who ultimately make the underwriting decisions. This person was consistent and constant in telling me that insurance is a noble vocation, integral to all commercial enterprises on the planet, that it is an intensely intellectual and people focused business. Know your game and know the people that play the game well.
Another reason for sticking at it for so long is while it is an intensely competitive industry it is a very collaborative industry that generously invests, donates money and volunteers time to a countless number of community causes and needs. The insurance industry gives back and pays it forward. This really stood out to me in my early years. As time passed, volunteering, fundraising and participating in charity events seemed to form a part of what I and thousands of Insurance industry colleagues and organizations did. Insurance is an industry which exists to do good for: others, communities and commerce.
All things considered it was an easy decision to both head into insurance and to stay in it. I’ve been very fortunate to have found a vocation and industry that has been very good to me. Over the years I have experienced a lot of professional and personal support from the industry and its colleagues. I have made life-long friends from commercial beginnings. This industry has allowed me to work for great people and provided me with a well-paying and satisfying job to provide for my family.
Q: What are some of the biggest misconceptions about the industry out there? What do you wish people knew?
Neil Mitchell: The biggest misconception is that insurance is boring, slow and predictable. It’s anything but that. Insurance is about identifying and transferring insurable risks from a business to an insurance company. Often, depending on the size and complexity of the risks numerous insurance companies are required to assume the transfer of insurable risks facing a business.
An insurance broker operates in a fast paced, intellectually demanding and challenging industry wherein they provide risk management advice and put in place financially sound risk transfer solutions for their clients. When you pause to consider what an insurance broker is doing, they are arranging a sophisticated financial transaction between two parties where one party, the client, exchanges their own balance sheet for an insurance company’s balance sheet to pay for a client’s future losses. This exchange in balance sheets is done at a relatively low known cost to the client for what could be a very significant yet unknown loss paid for by the insurer. To ensure that this exchange provides the intended protection the insurance broker must have done their homework in assessing and identifying their client’s risks and arranging the necessary risk transfer to an insurer’s balance sheet. This is a big responsibility. If this risk transfer from the client’s balance sheet to the insurer’s balance sheet is not done properly it will result in a big problem with serious financial consequences to the insurance broker’s client. Clearly an insurance broker is a very important business advisor and service provider to any commercial enterprise.
Add the complex nature of the claims that can arise, and an insurance broker has a job that is fast paced, intellectually stimulating, challenging and incredibly satisfying. Through clients and insurers they are exposed to any number of rapidly new and evolving risks and business models: climate change, cyber-attacks, advancing technologies, pandemics… and evolving new technologies (insurtech) that are accelerating the digitization of the industry’s entire value chain.
Q: How has the industry changed over the years?
Neil Mitchell: It has changed in perhaps three fundamental ways.
One: The Insurance industry due to recent and significant man-made and natural events has become a very complex industry and is being called upon to solve big world problems, none bigger than the Global Protection Gap. The industry is faced with so many new and evolving macro market and environmental forces: Regulation, Climate Change, Pandemic, Cyber, Disintermediation, Globalization, Population Migration, new entrants via Insurtech and many others, all of which will continue to have significant and profound effects on the future of insurance and its role in solving many of the biggest problems and challenges facing the planet.
Two: The industry has rapidly become a knowledge based and technology focused industry. To compete insurance organizations, need to have talented and diverse thinking knowledge workers, equipped with skills and tools to collect data digitally to enable real time: assessment and analysis to accurately identify risk, segment and select risk, predict risk, underwrite risk, price risk and transfer risk. The industry now more than ever is a knowledge business. Data and analytics are now foundational to a re/insurance organization’s ability to create, innovate, differentiate and compete.
Three: Insurtech has presented itself as a force of change and opportunity. Insurtech is creating and enabling: new risk transfer solutions and risk service technologies; enabling new distribution channels; improved customer experiences and interfaces with brokers, insurers and customers; and, improvements in operating performance. Insurtech is helping the Insurance Industry move from a product-centric industry to a service-based industry. Insurtech has ushered in the age of Insurance as a Service. No longer is Insurance just about selling a product. Add to that the amount of capital that incumbent re/insurance organizations are investing in the Insurtech sector – and the numbers, challenges and opportunities facing the industry today are staggering.
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Q: You have been passionate about confronting the Global Protection Gap. Can you please explain to our readers what that is and why it matters?
Neil Mitchell: The Global Protection Gap is based on total economic losses caused by natural and man-made events; LESS, the dollar amount of those losses actually covered by insurance. More often than not the economic cost of catastrophic natural and man-made loss events is not insured or are woefully under insured. The financial consequences of no insurance or under insurance are profoundly significant and painful and more often than not are left to governments (the taxpayers) to fund (pay for). Given the significant wealth that rests on unencumbered balance sheets – the re/insurance industry in collaboration and partnership with governments, NGOs and other agencies can be the solution. There are countless examples of such solutions being delivered regionally across the planet to address protection gaps. These regional initiatives (and newer ones) now need to be done at scale on a global level.
The numbers associated with the Global Protection Gap are sobering and staggering, yet it presents an incredible opportunity for the re/insurance industry to provide significant value and solutions at a societal and commercial level.
What industry on the planet has the ability to financially fund restoration and indemnification for the profound economic devastation inflicted on communities, individuals and businesses as the re/insurance industry?
In the face of the global protection gap the re/insurance industry has an incredible opportunity to do good for others and for its stakeholders/shareholders. Helping people in financial crisis and financially restoring lives and communities is the purpose of insurance. Being there to help others in their time of need is the: how, why and purpose of insurance.
Q: You transitioned away from Marsh Canada, co-founded Player’s Health and now you’re focused on supporting, advising and originating capital for other founders and their early and emerging stage ventures. What do you look for when you assess whether or not to get behind a founder and their company?
Neil Mitchell: I tend to focus on the problem that the founder is intent on solving. Is it a niche that is scalable? What is their secret sauce, differentiation? Have they achieved product market fit? Is their venture generating any income? I’ve learned through doing to be cautious and leery of founders with little to no previous sector experience. Sometimes it’s tempting and very convincing if a founder has exceptional presentation skills (good on their feet). Even if they seem to have answers for every question and some really good optics (great data room, perhaps a stacked board/advisory board) you still have to keep digging. Regardless of the founder’s experience or lack thereof it is absolutely critical and important to engage and consult with a network of smart and successful executives and entrepreneurs. Their insights, experience, and advice are integral to assessing and determining whether to invest or not to invest in an early/emerging stage venture.
I categorize opportunities between those founders who have experience i.e. have ‘been there and done that,’ and those who are embarking on their first venture/rodeo. The latter has more risk than the former, yet if they get it right could yield great returns. For a founder who lacks previous success and or corporate experience it’s quite frankly a coin toss, a gut decision at best. In the absence of real business experience one is left to rely on a founders life story/journey, how have they dealt with adversity in childhood, adulthood AND most importantly is there someone on their cap table who has exceptional experience that is funding the operation and actively promoting and fundraising on behalf of the venture. If that kind of person is involved, I want to know as much about that person as I do the founder.
For experienced founders, I want to know about their previous ventures and whether they had a successful exit(s) or not.
In either case I want to get to know the founder at a personal level, create a relationship with the founder. Knowing the founder personally, in the absence of past financial performance to analyze, will provide insight and a comfort level for the founder’s ability to plan and execute and ultimately whether or not they can be trusted with other people’s hard learned dollars.
The start-up journey is literally the business equivalent to an endurance activity like Ironman or Ultramarathon. It will ebb and flow, pivot to find a path forward, require resilience, resolve and a mindset that is prepared to accept the unexpected and above all keep pressing forward. Some of the best ventures fail simply because someone gave up – had they pushed for one more month, one more client, one more investor meeting – just maybe they would’ve made it.
Early/emerging stage ventures are imperfect organizations, investing in them is not for the faint of heart.Activate Social Media: