XL Group is a global insurance company with both insurance and reinsurance operations. Operating primarily under the XL Catlin brand since the 2015 acquisition of Catlin Group Limited, the company today provides property, casualty, and specialty products to industrial, commercial, and professional firms, insurance companies, and other enterprises on a worldwide basis. On April 1st of last year, XL Group announced the formation of XL Innovate, an initiative designed to foster innovation in the insurance industry. It seeks to invest in and build new businesses that are addressing large markets and have the potential to become significant new companies. An early focus has been looking for ways to address currently uninsured risks.
The new vehicle is led by Tom Hutton, a venture investor with deep knowledge of risk and insurance. He is a former director at XL Group, so obviously he knows the company well. He is also a former CEO of Risk Management Solutions and White Mountains Re, and has been a Director of other private and public insurance and reinsurance companies including Montpelier Re, Safeco, Centre Cat, and Palomar. Most recently, Tom served as the CEO and founder of New Energy Risk (now an XL Innovate portfolio company), a provider of insurance and structured risk transfer solutions, technical data analytics, and strategic consulting to the renewable energy industry which has partnered with XL Catlin and a group of reinsurers to provide performance warranty insurance for fuel cells and other new energy technologies, resulting in less expensive and more broadly available financing. He is also an investor and Director at SoFi, a leading FinTech company.
Q. Tom, what is the impetus for starting XL Innovate?
A. Mike McGavick (XL Catlin CEO) and the XL leadership team are true believers that the insurance industry is poised for change. I agree with them. We also share the perspective that change will come both from within the industry itself and from outside disruption. This led us to conclude that we could provide a valuable catalyst for change that combines both the skills and incentive alignment of venture capital with the resources and relationships of a leading global insurer and reinsurer.
For most of my career, I have been an entrepreneur and investor in FinTech, with an emphasis on insurance. In partnership with XL Catlin, I founded New Energy Risk, to define a helpful role for insurance in the renewable energy space and to determine if the model of an engineering-based, domain expert underwriter acting as an MGA would scale and be replicable. As it began to work, XL Catlin said, “Let’s find a way to create more of these.” So, we established this fund, which is in fact a traditionally-structured institutional venture capital fund, not really a corporate venture fund.
Our goals are three-fold. With our combined relationships and resources, we have the opportunity to be form or to be involved early on with ventures that could:
- Provide us with attractive capital returns;
- Provide value to XL Catlin’s business, including new sources of underwriting premium; and
- Provide visibility into development throughout the InsurTech space, even in situations or sectors where we are not investors.
Q. Has XL historically engaged in corporate venture?
A. First of all, XL Innovate is not what is generally considered a corporate venture group, as it is structured as an independent venture fund, with the same incentives as a standalone institutional fund would have. Specific to your question, XL Group actually has, relative to its P & C peers, been quite a differentiated and successful investor, over the years. This has included being an anchor investor in hedge funds and other investment vehicles, in addition to ventures and underwriting businesses that are related to the company. So, this is not a new thing for XL. Planning for the XL Innovate initiative began quite a while ago, independent of the wave of “insurance venture” or “innovation labs” that have followed in the industry.
Q. How much capital has XL committed?
A. We are well-capitalized and have access to additional capital as we see promising investment opportunities. The amount of capital invested will be the amount we can find attractive returns for. If that amount becomes greater than XL Catlin wants to have tied up in this particular asset class, then we would consider investments from outsiders.
Q. What can you tell me about the kind of investments you plan to make from this fund?
A. We have formally been in business for about 18 months, and we are coalescing around a model that fits into three categories. The first category includes ventures that we initiate and build, and where we are the sole initial investor, as in New Energy Risk. XL Catlin provides underwriting capacity to these ventures, which may include XL Catlin’s reinsurance partners. We have started a company focused on risk related to climate change and climate volatility, which we will announce in more detail in the near future. We have an MGA vehicle called Complex Risk and Insurance Associates, that we can use to provide licensed underwriting capabilities to our portfolio companies, even if we may be one of several investors. This capability is particularly value-adding when we are working with more traditional institutional venture capital partners, who lack such a resource.
The other two categories include InsurTech ventures where we are typically a member of a syndicate of investors from the traditional venture capital community. There we have a few investments, in two areas: Analytics and Data as one area; and New Insurance Models as the other. An example of new insurance models would be Slice Labs. We have also invested in a company that is in the peer-to-peer space that will announce our involvement itself, following its formal launch, and we consider EmBroker to be a company in this “new model” category. We are about to close an investment in a company that distributes insurance in developing countries, using a novel channel.
In Analytics and Data, we have made an investment in a sensor company called Notion that provides sensor-derived analytics to underwriters; we have an investment in a machine learning-based property data business; and we are studying opportunities in a couple of other areas driven by new IT technology but focused specifically on addressing insurance issues. We will probably continue this basic portfolio layout.
We like investments where XL Catlin can provide unique value, including underwriting capacity, and we like to see XL Catlin receive value in return, by being exposed to new underwriting opportunities. However, our incentive is to do what is best for each individual venture. For example, Slice Labs recently announced an underwriting relationship with Munich Re, which is an ideal partner for the specific business area being addressed.
We try to work with other investors with whom we share vision and incentives, and have complimentary skills and resources to add. We are pleased to have found examples in both the technology venture capital community and at a few carrier-sponsored investors, and we are pleased with the makeup and balance of our existing investment partnerships. Without question, the main reasons tech venture capitalists and entrepreneurs have included us, are our tight focus and experience with insurance and the unique resources provided by XL Catlin. We hope to make more investments with the same or similar partners.
Q. XL is primarily involved with P&C. Will you consider life insurance investments as well?
A. We have to date avoided life, health and benefits. This is partly due to the fact that our team members have spent their careers in the property casualty business and I personally have the most comfort there, and it is partly due to the fact that, without question, we have a greater impact on a venture if we can bring the resources of XL Catlin to bear. Whether those be underwriting capacity or knowledge gained from their underwriters, or other relationships opened throughout the world, we don’t have these advantages in life or health and so we’ve shied away. That said, I’d highlight Jamie Hale at Ladder as an entrepreneur I’d like to have been involved with, but the venture is just not in our space, at least right now.
Q. I’m particularly intrigued by the potential of peer-to-peer. You mentioned that you’ve made an investment in a peer-to-peer insurance startup that will be announced down the road. Would you like to see more peer-to-peer deals? Is this an area that continues to interest you?
A. It’s hard to develop a model in insurance that has not been practiced at some point in history. That is partly because people in insurance have been creative through the years, and it’s partly because regulatory constraints require that really only a certain number of models are fit for licensing. It takes a long time to gain the support of regulators to stray from the tried and true.
We’re likely to see peer-to-peer businesses that look a lot like risk-sharing pools. My very first foray into insurance came when I was in my mid-twenties and owned a commercial fishing boat. I grouped ten fishermen together and we pooled our risk, and bought insurance in excess of one major loss. That saved us a good deal of money. We were very careful about our boats and managing our risk. Really, that is an example of what Friendsurance and most other peer-to-peer businesses look like today. They are structured so that the regulators can define them as risk-sharing pools, and they need to work within those constraints, at least for now. We have seen a couple of interesting ventures targeting small commercial segments with risk sharing pools. I can’t fail to mention that XL was actually created as essentially a “peer to peer” carrier in the 1980’s, in response to an availability crisis in liability insurance. It was capitalized by a group of corporations requiring large amounts of liability insurance, which subsequently obtained it from the company they formed.
I do think this model provides some significant opportunities with respect to the behavior of insureds. These may come from better definition of claims, or from the amount of insurance purchased, or how it is purchased. As either commercial buyers or individuals feel they are being fairly treated, they treat their partners and their insurers fairly. That should lead to an increased interest in the use of insurance, hopefully.
So, I am high on peer-to-peer, even though I am very cautious about the use of the terminology. People exposed to the FinTech sector have a reaction to this terminology that assumes investors being able to participate directly in the market, as was the case with marketplace lenders such as Lending Club and Prosper, and this is not at all likely to be replicable in insurance until or unless regulatory constraints are eased. I think the insurance trend starts at the personal lines level and that we could see it moving toward the larger and more complex risks in commercial, as the details get worked out.
Q. Which of the other “new” insurance models do you find most intriguing?
A. I am an investor in a company called SoFi, which is a marketplace lender. (That is actually one of the background pieces which led to the creation of XL Innovate – my experience and the belief, that I shared with Mike McGavick, about how similar innovation could potentially occur, in insurance.) One of the reasons why marketplace lenders such as SoFi have become successful is that there is a significant group of individuals – we tend to call them millennials but they extend beyond that particular age category – who have never participated in the traditional distribution of financial services. And they’re not that interested in trying, because they’ve become quite comfortable receiving advice and executing transactions electronically. GEICO and Esurance have demonstrated that this is not limited to Millennials. In many cases, electronic interaction includes a telephone call, but it probably doesn’t involve a visit to an office with an insurance agent or a lending officer. I think that will extend to small businesses and then eventually to big businesses, where there are very sophisticated risk managers and financial executives who are absolutely capable of addressing many of their own insurance needs. There is no longer any magic associated with knowing how to find carriers and underwriters (‘markets”). I think the distributors in the business – the brokers – probably become advisors, more like consultants or investment bankers. There is a trending toward self-education and direct access for many of these products. EmBroker is an interesting example of this trend. It provides a combination of expert services and technology-enhanced client interfaces.
Q. You mentioned that you are investing in machine learning startups and risk analytics-related startups. How broadly will you define insurance-related? Are you looking at blockchain? I know you’ve invested in IoT. What else?
A. We are certainly interested in analytics, we are certainly interested in blockchain, and we have additional interest in IoT. We are involved with an initiative with a major provider of commercial sensors, and we think that together we may be able to meaningfully impact risk management in commercial buildings and factories, addressing both structural and life safety risks.
All of this said, I tend to believe that the most interesting InsurTech ventures are focused on solving problems that exist within the industry, as opposed to those ventures that provide broadly applicable technology, such as we have seen with examples such as data warehousing or now, perhaps blockchain. Let me use as an example RMS, where I was CEO for the initial ten years and my partner, Martha Notaras was a Director for 10 years following my own departure. We certainly did not have the resources of an IBM or an Accenture, or other large companies that could have provided far more people, data, or even more relevant expertise in insurance. However, we were focused on a singular issue, which was natural catastrophe risk. After a while, we became the de facto partner of our clients in that specific area. Today, the company is without question the global leader in catastrophe risk analytics and has begun to broaden its focus, into adjacent spaces.
Blockchain is a technology with a broad set of applications that needs to be focused on specific problems. Those ventures which can use blockchain to solve a set of very specific security problems within insurance will be very interesting to us. The same is true of IoT, Virtual Reality, Artificial Intelligence and “Big Data Analytics,” (a few of the technologies du jour in Silicon Valley). Placing networked sensors in a building is one thing. Having sensors in a building which can be used to meaningfully reduce risk, and meaningfully improve the insurance company’s understanding of that risk, is potentially game changing.
Q. What are the biggest opportunities for innovation that you see in reinsurance?
A. Over the past couple of decades, there has actually been far more innovation in reinsurance than is often recognized. The “Bermuda Market” has been created literally from nothing, including the application of data analytics and computer-based modeling that has attracted billions of dollars in investor capital. In a mere 25 years or so, Bermuda has become home to a substantial share of the world’s reinsurance capacity and the companies operate state of the art information and decision support systems. Lloyds’ of London has reinvented itself into a more efficient and modern form, and has become an even more important part of global insurance and reinsurance than it was, before. As you know, we’ve also seen a good deal of activity in the use of non-traditional capital in the industry (CAT bonds and now Insurance-Linked Securities, or ILS funds), and hedge fund-backed reinsurers being created in Bermuda and Barbados. This is really a result of a focus on two or three things, one being the use and impact of technology, another being access to capital that is not restricted by the inflexibilities imposed by regulation, and a third being tax optimization.
Facultative reinsurance has been fairly traditionally structured for a long time and is quite ripe for electronic advancement. Facultative, like small commercial insurance, is likely to see a lot of activity. That said, it’s a market that is not well known to the non-insurance entrepreneurial community and as such it is the type of opportunity that is likely to be addressed by someone who comes from within the industry.
My assumption is that we will see considerable innovation in reinsurance, but that reinsurance innovation will come more from within the industry when compared with personal lines insurance, where the outside disruption will be more prevalent.
Q. Which areas of InsurTech are overhyped? Do you think that blockchain is overhyped?
A. I do. Blockchain or something quite like it is likely to have a profound impact and presence in financial services, where security is so critical. However, I think it is overhyped with respect to timing and focus. I think the expectation that suddenly an industry of this size and complexity changes the way that it transmits or transacts – turning on a dime – it just doesn’t happen. This is an industry that has taken a long, long time to put any information into the cloud, because the participants have fiduciary duties to their clients not to disclose confidential data, and the consequences of leaks can be very large. It is simply easier (carriers believe) to protect data physically than to expose it. I think we’ll see some significant developments in these areas but it does to take time. I think as we look at what is happening in InsurTech (and I hope to write a paper on this topic) with respect to development cycles, we’re in the first inning or chapter, of several. Lessons learned in early innovation attempts will lead to far more impactful successors.
The first inning might have happened, by the way, around the 1998 – 2002 technology bubble. There were some very interesting companies established, including companies like InsWeb, Esurance, eCoverage, eHealth, and CATEX – but it was an era in which other forces (than innovation) restricted change. It was a time when securitization had an opportunity to begin to take off. Cat bonds got delayed for quite some time, for capital market and execution cost reasons. It was a time when direct or electronic distribution of insurance products in personal lines had some very interesting early vehicles. Really, only Esurance and eHealth succeeded.
Esurance is a company I was personally involved in at White Mountains Re, and I admired it for the team’s fortitude and for sticking to it. Interestingly, and I realize I am answering a different question than you are asking, but in my experience with Esurance I actually learned something that has had an important impact on what we are trying to do at XL Innovate. Esurance only became successful once White Mountains became involved. It required more than venture capital and web distribution. It required a partner that could put forward a balance sheet on which these risks could be written. In fact, we reinsured Esurance at White Mountains very, very efficiently when compared to the alternative of raising equity capital to fund insurance risk. If Esurance had been forced to grow by capitalizing the balance sheet with venture capital, it never would have worked.
I am convinced that there is a reason for the existing insurance companies to participate in the developments of InsurTech, and that is because it is so much more efficient to use some of the infrastructure they have, to use their ratings, and to use their balance sheets. So, working together with venture capital, with startups, and those established companies is an effective model for InsurTech.
Q. So can I conclude you don’t think we’ll see full stack, de novo P&C insurance carriers?
A. No. I think in certain areas we may see them. I think we’re about to see a couple of announcements in that regard. The question is, how full is full stack? I think we may see companies that actually have balance sheets that are in regulated jurisdictions and operate as insurance companies but may not have anywhere near the infrastructure or services that we are used to seeing. They will try to operate at dramatically lower expense ratios. They may rely on TPAs for certain things; they may rely heavily on reinsurance. But if you have an opportunity to underwrite a risk that is not being addressed today, for example, it’s quite efficient to do that as an MGA. There are entrepreneurs who believe that an MGA model doesn’t put them close enough to their clients. I think we’ll probably see both approaches.
I tend to favor the MGA model because I think it is an extremely efficient way to leverage the resources of an existing company and that is how we intend to build our internal underwriting ventures.
Q. We talked a little about direct distribution. Direct distribution doesn’t have the market share in the U.S. that it has in the UK, and I’ve always thought it should have more. Are you interested is seeing companies that are innovating in distribution?
A. We are. We’ve spent a good deal of time researching the small commercial arena. There is so much going on that it’s a little daunting how competitive it could be. Berkshire Hathaway, AIG-Hamilton, Hiscox, Insureon, Bolt, etc. – these are meaningful companies that can expend substantial amounts of capital building their positions. So, for a small venture to compete in that market is daunting. But we are very much believers that this is a market where change could actually be good for all participants. It’s not a market where the traditional brokerage industry earns much money. In fact, in many cases, it’s a losing proposition to provide services to a very small business. It’s a market in which the small businesses would benefit from being closer to the information related to their insurance purchases. It’s a business that I think could have lower rates and better profitability in the outcome.
Q. Will you invest in truly disruptive innovation or are you looking for incremental improvements? Will you invest in companies that might threaten XL’s existing business lines?
A. Frankly, we believe that change in the industry is good for the industry and for its most innovative incumbents. We share this perspective with our partners, at XL Catlin. Being a leader in an industry operating with improved or more efficient methods is infinitely better than hanging onto the past. XL Catlin will simply adjust. A more efficient industry which has a greater impact on the world is will result in increased growth and relevance.
Q. Earlier, you mentioned that you are working on a venture in-house that is in the climate change arena and I know you’ve spoken at conferences on that topic. Can you elaborate on climate change as an investment theme?
A. Sure. We will launch and announce that company soon. We’ve been working on it for more than a year. It’s important to differentiate, perhaps, climate change from climate volatility or at least from climate in general. The first presumption people make when we mention climate is that we dealing with the likes of weather/temperature derivatives or precipitation derivatives and associated hedge products. These are part of an interesting preexisting market that has never really grown to the extent many of us thought it would.
Climate change – whether one assumes that it’s man-made or whether we are in a trending period, or all of the above – these distinctions are not really relevant to the core issue that risk is increasing and that the market perception of risk is increasing for sure. There are a certain set of climate-driven risks that companies and people are insuring against today, and they include risks like floods and droughts or temperature increases or decreases or specific hot periods or cool periods. There will be more, and we would like to position our business such that it is at the forefront of technology, thought development and market thinking, and to be in contact with those individuals and companies in the market that are focused on this area. We believe that over the next five or ten years there will be a number of risks that are insured relating to or stemming from climate change, that we are not yet aware of today.
Q. Do you have a preference as to the stage of the companies you invest in? The round you participate in?
A. We think of ourselves, and I believe our partners think of us, as a fairly traditionally structured technology venture firm where we are deeply engaged as Directors, as partners, and as cheerleaders for our ventures. Very early-stage ventures are quite time-consuming, for venture partners. On the other hand, we are not a very large firm with unlimited capital. Our basic formula is that we typically invest between $2 million and $10 million in a venture. The bottom end indicates what justifies our resource application and the upper end indicates how risk-concentrated we are willing to be. Seed funds can invest $250-500,000 in a venture, and are structured to be successful at that level. Softbank can invest $1 billion in an individual venture. We don’t operate at either extreme.
This tends to mean a Series A or fairly late stage seed investment simply by economic factors, but we are strategically agnostic as to stage.
Q. $2 million to $10 million – is that an initial investment or over the life of a portfolio company?
A. Those are the initial investments. We would be willing to follow that with two to three times as much, depending on how capital-intensive the venture is and on how appealing the venture is over time. We have less constraining metrics than many institutional investors because we only have as investors XL Catlin and our principals.
Q. Do you have regional investment preferences? Do you see the particular type of innovation you are looking for coming from one geographic region more than another? Or will geographic allocation be just a residual of the attractiveness of the deals you see?
A. I think the only constraint we have is the number of miles we can fly per year. XL Catlin is a global company. Through their contacts and our own activities, we are exposed to interesting ventures, globally.
I happen to live in Silicon Valley and that is without question a major hub of innovative activity. Probably the largest. That said, within the insurance world, I actually think that there’s more interesting development occurring in London than in any other city I know. We have activities in London, in Zurich, in Silicon Valley, in New York, and we will have a venture in Asia quite soon. This is a global trend. Learning locally and learning in Silicon Valley is very helpful, but I think that the model transfers quite well in this business. By the way, there’s an enormous amount of FinTech activity taking place in Israel, as well. I have become a big fan of a number of Israeli FinTech and InsurTech ventures.
Q. How will investment decisions be made?
A. We have an investment committee that consists of myself in addition to two individuals from XL Catlin, who also spend part of their time helping with finding as well as performing our support roles with our ventures. We behave as though we are an arms-length entity, as we really are. Of course, my colleagues on the investment committee consider whether a particular investment would be of value in a relationship to XL Catlin, but, for example, we might have made an investment in SoFi, had the fund been established when I got involved myself. SoFi wasn’t in the insurance sector – it’s in the FinTech sector, but it will be in the insurance sector as a distributor. We certainly don’t have the company vetting investment decisions directly, but we reflect the interests of the company. I would say I reflect the interests of the company as well, in almost an inverse fashion. I believe the most successful investments we will make as a fund are those to which we can bring to bear the resources of XL Catlin.
Q. You mentioned that you’ll be taking board seats. It looks like you are pretty flexible about being lead investor or part of a syndicate in which others take the lead. Is that a fair assessment?
A. It is. We have led a couple of our investments. We are, however, cautious about making sure that an individual venture has the appropriate investor in each role. For example, if a venture is likely to raise subsequent rounds requiring fairly large amounts of capital from the traditional technology investor community, we are probably not the most appropriate partner in that role. We are not Sequoia, or NEA, or Canaan, which have the ability to reach out to their traditional syndication and growth investment colleagues. In those ventures, we are, I hope, valued for the unique experience we have in insurance and for the value that XL Catlin can provide from relationships, but we would certainly not be valued either for very deep pockets or for our ability to reach out to our colleagues for follow-on capital. This could change in the future, particularly of other carriers become more active investors in venture financings.
Q. You mentioned that portfolio companies will be able to leverage XL’s balance sheet if needed. What other kinds of interaction can your portfolio companies expect to have with XL Catlin? Will they have preferential access to people (for advice) or to data, for example?
A. Yes. For our investment in a machine learning business, we have had contact with underwriters throughout the XL Catlin world (including those at other carriers) who can guide that company as to what the most valuable initial data applications would be. They may also become the initial customers/clients. For ventures where underwriting is part of the business model, we can provide capacity through our MGA vehicle.
Interestingly, I’ve watched a number of technology venture firms reach the conclusion that a business plan which assumes a venture is going to have an MGA relationship is probably one you want to wait on to see if it is going to get one first, because it is so difficult to achieve that status. We can provide that status. We don’t provide it lightly, but we can certainly provide it in a pilot phase, and if it’s the right relationship we can certainly provide it on an ongoing basis. That is really something that distinguishes us in the venture community and it’s something that we’re pleased to be valued for.
Q. That’s a big advantage for your portfolio companies. Do you have any recommendations for insurance-related startups that need access to data? What options are available for entrepreneurs who need risk or experience data to prove their models?
A. I tend to revert, perhaps too often, to my experience at RMS. We had access to data because we were providing value back to our partners and clients in the analysis of that data. Of course, we had to be cautious about what we did with proprietary information. To give you an example, one of the really meaningful steps that occurred with RMS and its clients was that we were able to use real claims data to determine what damageability or what loss would be associated with a major event of a particular magnitude. What was important was not the percent damage to a structure or sometimes even the total cost of repair. What was important was what the loss would cost the insurance carrier. Taking that from a theoretical relationship to a fact-based or data-based relationship had a major impact on the confidence of our clients and the accuracy of our work. There really is no wrong or right answer, in modeling; you’re providing a perspective, a modeling perspective. Our model perspective became more meaningful and more believable, and it achieved higher confidence because it was based on real claims data. We weren’t provided data that a property and casualty company would not be allowed to disclose about its policyholders; we were provided data that allowed us to develop a better answer for them. If new ventures can position themselves as being helpful to their partner companies, they’ll be provided access. If they are simply asking for data to build their own businesses, the insurance companies are likely to say, “What’s in it for me?”
Q. How will XL judge the success of this effort? Purely on financial return? On strategic benefits? Or a combination?
A. There are three factors but we don’t yet know what the balance will be. Those three factors are financial returns; value perceived by XL Catlin, including opportunities to participate in new areas of underwriting; and visibility into what’s happening in the world of insurance innovation.
In our very early days, I was tested by some of the entrepreneurs who came to see us as to whether I knew much about insurance. Today, this has transitioned. We are now expected to know a lot about which InsurTech ventures are doing what in the world. Comprehensively. Only by being very active in the market are we able to gain that aggregate picture of who is doing what and what is likely to be successful.
Q. Do you anticipate being involved with accelerator programs and incubators?
A. Yes, but not deeply. One huge benefit that insurance companies gain from accelerators – and I would put Plug and Play into that category, where there is an effort going on now in insurance – is that executives from those companies can experience firsthand the passion and the energy and the willingness to be creative that these ventures demonstrate. That is something that insurance executives would only otherwise read about in magazines or hear about third-hand. So that is enormously valuable. XL Catlin is currently evaluating involvement in a few accelerator programs, in the U.S. and in Europe.
There is, of course. the opportunity to find an investment gem in the group every now and then. Lending Club started in the Plug and Play environment. That said, there are only a few gems among the many young companies that begin in these environments. The exciting opportunities that institutional VCs are used to backing are formed by the people who have been there and done that (been successful entrepreneurs), before. They’re able to walk into a major venture firm as known quantities and be funded straight off. We tend to invest in the latter, in teams that we have seen success from, who probably aren’t focused on participating in accelerators and incubators. However, we are very big believers that there are a few gems to be found at accelerators, and we’d like to find them.
Q. How would you like entrepreneurs to contact you?
A. Email is fine. We also attend conferences. We are happy to get to know companies that we may not invest in initially because if we can be helpful they’ll come back to us, and because we learn from meeting with them.
Q. Is there anything else you would like to leave us with?
A. Venture capital is an activity that requires teamwork. We have a tremendous team, at XL Innovate. I have the pleasure of working with Martha Notaras, whom I’ve known for 30 years and worked with at RMS, and Sarah Street, who was the Chief Investment Officer at XL Catlin and has enormous contacts in the finance community, and a group of people within XL Catlin who are very helpful to us and extend our reach both geographically as well as from a skills standpoint. One of the challenges that evolves at venture firms is how big the team becomes or should become. That’s often dictated by how much capital you raise and what size investments you make. We intend to stay fairly small and nimble.
# # #