Allphins: understanding terrorism exposure
InsTech London’s Henry Gale speaks to Laurent de la Porte, co-founder and CEO at Allphins, to discuss the company’s new terrorism product, how it works and what clients Allphins is already working with.
Henry: Laurent, why did you start the company?
Laurent: I founded Allphins in 2018 after working for Schlumberger, an energy services company, heading up its European and African investments. I became interested in how our projects and assets were insured, so I started speaking to insurers, reinsurers and brokers. These conversations highlighted the challenges within energy insurance and opportunities to improve it with the right data and technology. This is why I founded Allphins with my co-founders Jean-Baptiste and Antonin.
Henry: What does your role as CEO involve?
Laurent: My role involves deciding what features should be in the product and what classes of risk Allphins should focus on. We started with energy and are now expanding into terrorism. I am also responsible for future strategy development. Allphins is currently focused on exposure management, but we could consider moving into pricing or claims too.
Henry: What products does Allphins offer?
Laurent: We currently offer exposure management solutions for energy, political violence, credit risk and contingencies. There is currently a live beta version of our terrorism exposure product, with a commercial version likely available soon.
Henry: How do underwriters access the insights Allphins provides?
Laurent: Allphins’ offering is in the cloud, so clients log in to access it in a secure way. All their risks and exposures are presented to them in a simple digitised format.
“Speciality risk is complex, but you need to be able to answer simple questions.”
Our tool has a straightforward user interface that can be used and understood by a range of people - not just exposure managers. Then on top of this, it is possible to explore in more detail the exposure to different events with different assumptions.
Henry: What problem does Allphins’ new terrorism exposure product solve?
Laurent: Underwriters want to quantify and qualify their terrorism exposure, be it from their existing book of business or from the marginal impact of a potential policy to underwrite. This exercise is rendered extremely difficult due to the very large quantity of data they receive – millions of risks, the specific format of the bordereaux and the need to perform heavy scenarios calculations. All this in the heat of the renewal period where underwriting decisions have to be made in a few hours. Allphins’ terrorism product allows underwriters to calculate the exposure impact of their potential decision in real-time.
Henry: What technology does the terrorism exposure product use?
Laurent: Natural language processing (NLP) is a crucial part of our product. In particular, forms related to speciality risks are provided in a variety of formats and often have inconsistently written addresses.
You can read more about Allphins’ activities in digitising forms in the InsTech report - Data Extraction and Ingestion: The 40 companies to watch in 2021.
The other important piece has been scaling up our technology infrastructure. Allphins needs to perform sophisticated calculations to give clients quick answers to complex questions, such as the worst place a bomb could explode.
Henry: What factors need to be taken into account to calculate exposure to terrorism risk?
Laurent: A re/insurer may want to understand their exposure if a bomb goes off and destroys everything in a 200-metre radius, half of the buildings in a 400-metre radius and causes business interruption. Longitude and latitude of the bomb location is needed, but also information on the area more broadly. The type of event, such as war or nuclear attack, is another factor. Whether the exposure is for a building, its contents or a time dimension, such as business interruption for three weeks after an explosion, also needs to be understood and standardised. Based on these key factors, Allphins generates automatic scenarios.
Henry: Are you partnering with any data providers for the new product?
Laurent: Geographical coordinates are needed for the tool, but this is typically available via Google API data. In terms of terrorism, the safety of locations is important for underwriters to understand. While they may have a $30 million exposure in one location, it may be less concerning than a safer location with an exposure of $20 million. Allphins is planning to partner with a data provider that offers this type of analysis, so that underwriters can understand the riskiest areas.
Henry: What clients is Allphins working with that you can name?
Laurent: TransRe was our first client in 2019 and since then Allphins has signed with MS Amlin, Chaucer, Arch Re, Blenheim and Ariel Re amongst others. As Allphins is an agile company, we are able to make changes quickly, using feedback from our community of clients. Word of mouth from our current clients has been the most successful way of expanding to work with new clients.
Henry: What are the biggest areas of opportunity for Allphins?
Laurent: In the next 18 months, it is most likely to be cyber. Insurers currently have a low ability to control their exposure, meaning that they underwrite less cyber risk than they would like. In the longer term, property is a big area of opportunity for us.
Henry: Allphins participated in Cohort 3 of the Lloyd’s Lab. What was your experience of the Lab?
Laurent: It was important for Allphins to get recognition from the industry that we had a good idea and were offering something that insurers needed. Being part of the Lab also allowed Allphins to become part of a community, as we had weekly meetings with mentors. This also helped us with going to market; so far, two of our mentors have become clients.
Henry: Why is Allphins a corporate member of InsTech?
Laurent: Joining InsTech has allowed us to become part of a tech-focused community. It is also great to keep up to date on insurance trends and what other companies in a similar space are up to. Through InsTech, Allphins can communicate our offering to the right audience effectively.
Henry: What kind of companies would Allphins like to connect with?
Laurent: We think reinsurers would be most interested in our solution, but insurers who think Allphins could also help them should reach out. Allphins is happy to discuss our products and listen to feedback to understand the issues you would like solved.
Canopius, the leading global speciality (re)insurer, and Allphins, the speciality risk management software company, today announced that Canopius will be using Allphin's solution for Treaty Energy.
Chaucer, the international specialty (re)insurance group, and Allphins, the exposure management platform for specialty risks, have entered a long-term partnership.