TechTalk: A short history of Lloyd’s Lab

In June 2018, Lloyd’s of London joined forces with global innovation firm L Marks and insurtech accelerator programme Lloyd’s Lab was born.

At the time, the initiative - which allows insurtech startups to road test concepts and ideas - was dubbed the newest innovation sandbox for technology talent and entrepreneurs.

It was originally led by the marketplace’s head of innovation Trevor Maynard - now senior risk advisor at the Cambridge Centre for Risk Studies - until Ed Gaze took over the role in August 2018.

Fast forward to 19 May 2022 and Gaze announced in a LinkedIn post that he was stepping down from his Lloyd’s Lab leadership position in August this year, after a four-year tenure.

Lloyd’s is now looking for Gaze’s successor. In the interim, Lloyd’s Lab and innovation staffer Rosie Denée and Lloyd’s of London’s head of strategy Tom Allebone-Webb will assume control of the programme.

Gaze will continue supporting the current eighth cohort at Lloyd’s Lab, which started on the programme from March 2022, until his departure. Insurtechs within cohort eight are focused on insurance solutions around systemic risk and climate change. 

Meanwhile, applications to join cohort nine opened on 6 June 2022 - startups have until 10 July to submit their entries.

Speaking exclusively to Insurance Times, Gaze said: “Innovation at Lloyd’s has changed. Before the Lab, innovation at Lloyd’s was about risk and emerging risk reports.”

One way Lloyd’s has moved the dial on its innovation is by introducing a specific innovation class in June 2020.

This is where insurers are allowed to write an extra 2% of gross written premium for innovative products, separate from their usual underwriting activities, without facing performance management scrutiny from Lloyd’s.

“We appreciate everyone needs to innovate, but innovation is a risk,” Gaze added.

Value of face-to-face interaction 

Prior to Lloyd’s Lab, Gaze worked at professional services firm EY as a data and analytics senior manager. While employed there from May 2017, he saw an advertisement for Lloyd’s Lab and having been fascinated with Lloyd’s and its traditions, he decided to apply – the rest is history.

He said: “I’ve never wanted to get rid of the tradition - the face-to-face part of the market is really valuable. I love the feeling of being in EC3 and everything around you is insurance.”

During his four years of Lloyd’s Lab leadership, Gaze has seen around 90 insurtechs through the scheme. When the Covid-19 pandemic hit in 2020, the twice-yearly programme was once again in full swing - but Gaze still noted a “huge uptick” in innovation.

For Gaze, one standout insurtech alumnus included Gaia from cohort six, which provides a personal insurance payment plan for in vitro fertilisation treatment (IVF) in the UK. It was founded in 2020, but officially launched in February 2022. So far, the insurtech said it has raised more than $23m (£19m) in funding.

Gaze said: “Just knowing how difficult that product was to get going and the work that the underwriters and the team at Gaia put in. We helped facilitate the start, but Gaia did the rest.

“There were so many challenges getting a product like that to market in terms of the vulnerability of the customer and making sure you’re not taking advantage of them.”

Gaia was an unusual investment for Lloyd’s Lab, as it does not typically focus on health insurance.

Another standout insurtech Gaze remembers fondly is Parametrix, which was part of cohort four. The insurtech MGA offers parametric insurance for external service downtimes, such as cloud outages, network crashes and platform failures.

Gaze explained that Parametrix’s founders had no prior insurance knowledge, but the firm had great data and a passion for its proposition.

Two-way street 

In terms of choosing the startups to embark on the 10-week accelerator programme, Gaze and Denée work closely with L Marks on this process.

Daniel Saunders, chief executive of L Marks, told Insurance Times that the innovation business has worked behind the scenes with Gaze since he started at Lloyd’s Lab.

“We structure that entire process week by week to ensure the continued development of relationships and the output at the end,” Saunders explained.

Although the Lab’s selection process sets certain parameters, Gaze explained that the startups ”that don’t make it, it doesn’t mean they’re no good”.

He continued: “It just means [that] maybe it’s not the thing we’re looking for at that moment in time, or maybe it’s just that we don’t think we can bring enough value to them to make it [a] worthwhile journey – it’s a two-way thing.”

After the startup selection process is completed, contracts are signed and the chosen firms are introduced to their mentors. Each startup gets between five and eight mentors to help them - although some insurtechs prove so popular that too many mentors wish to be involved in its progression, Gaze pointed out.

One example of this is parametric carbon insurer Kita, which is part of cohort eight at Lloyd’s Lab.

Ultimately though, this two-way engagement between startups and mentors is a key facet of the Lloyd’s Lab experience. Gaze said: “If they’re not engaging, it’s not a lab. We want to inspire people in the market to get involved with insurtechs - we want them to learn how to work with insurtechs.”

With this in mind, introducing insurtechs to the Lloyd’s market is another important component of Lloyd’s Lab, to establish this collaboration. “If you don’t know something exists, you don’t know that you want to meet them,” Gaze said. ”All these introductions give people a really good perspective of how it all fits together.”

Differing ambitions

Participants in Lloyd’s Lab all want to get something different from the programme, added Gaze.

“Some teams come with a solution ready and they want to test it with the lowest market. Some, like Kita and Parametrix, they’ve got an idea and data and [they] want to create a product around it.

“Then there are others like Tautona AI [that] have an artificial intelligence (AI) solution for claims automation and wanted to work with a market to make it really fit for Lloyd’s.

”We don’t fix what they’re going to do, but what we’ve tried to do is just basically grease the wheels of innovation and try and make it easy for them to innovate.”