Insuring the Future, a VC view… with Kevin McLoughlin

In this episode, we speak with Kevin McLoughlin. Kevin is partner and co-founder at MTech Capital. He has spent 22 years in insurance investment banking. Along with his brother they created MTech Capital as a venture capital firm that invests in technology companies operating in the insurance industry.  Kevin talks with us about how digital technology allows insurance companies to advance their operations and offer new products, but how adoption has been a slow process. As venture capital investors, he explains how MTech is being patient and navigating the industry as insurance becomes more embedded in daily life. Kevin does stress the importance of digital transformation, and how the use of the cloud and technologies like AI and ML can be game changers for insurance and banking. -------3 Takeaways:AI will transform the insurance industry. With the advent of machine learning and artificial intelligence, it creates enormous opportunities in the insurance industry to aggregate new data and to analyze existing data.There are clear parallels between the evolution of FinTech and InsureTech. There is a strategic imperative in insurance to adopt technology for digitalization. Many processes now can be automated using combinations of technology, OCR, machine learning, and natural language processing, and others.A big and important trend is cloud computing. Kevin believes that insurance companies on the one hand understand that to really make use of machine learning in all parts of their business, they need to move their data up to the cloud. At the same time there can be resistance and reluctance to do that because they are used to the on premises systems they have today, so there is fear of losing data.-------Key Quotes: “You'd be hard pressed to come up with I think another industry that uses data more than insurance. I mean the whole industry is actually predicated on data. There's nothing tangible about it.”“AI will transform the insurance industry. I have no doubt. The industry needs time to develop these use cases and measure the efficacy of technology in various parts of the business. Personally, where I see the most potential for value creation through technology will be using machine learning, on the underwriting front.”“Insurance is all about probabilities. That's really what it comes down to. What is the probability that a business or a person is going to have a claim?”“The fascinating potential of AI here is to be able to assess a whole lot more of these factors that maybe never occurred to actuaries or data scientists, that there might be some correlation and to identify correlations, which actually have quite predictive power about the probability of a claim.”-------Best Career Advice:At some point pick your niche and go deep in it to make yourself invaluable to your employer.-------Bio:Kevin McLoughlin, Partner and Co-Founder at MTech CapitalKevin McLoughlin spent 22 years in insurance investment banking, most recently as the Global Head of Insurance Investment Banking at Bank of America Merrill Lynch, and prior to that, as Global Head of Insurance Banking at Citigroup. He also spent 7 years as an executive at AIG. Kevin maintains senior level relationships across the insurance industry globally, having advised many of the largest companies during his banking career. Kevin holds an MBA from Columbia Business School and a BA from Boston College. He is based in London.MTech Capital is a venture capital firm with offices in Santa Monica and London investing in technology companies operating in the insurance industry.  We define the insurance sector broadly to encompass all of the businesses that insurance companies are in, including asset management, wealth management