On this episode, Sabine VdL interviews Tanguy Touffut, founder and CEO of Descartes Underwriting, a top of its space InsurTech company which is recognized as a top-grade growth venture in its category, parametric insurance. It recently raised $120 million in series B funding with the likes of Mundi Ventures, BlackFin, Cathay Innovation to name but a few.   KEY TAKEAWAYS After graduating I really wanted to launch a company shares Tanguy, but lacked some of the skills and I wanted to increase my purchasing power, so I started in the corporate world. There are plenty of benefits when working for a large corporation: the resources, expertise, strong colleagues and you have less skin in the game. But the scope of things you can do as a startup is much wider. The venture capital market is quite bullish about the insurance industry, even if the valuations are decreasing. There’s lots of capital available and you can have a long-term view, compared to large groups who have a short-term view on profitability.  There’s a lot of confusion about parametric insurance. It’s not a line of business or a product, it’s an approach to improve product features. It’s the result of years of frustration about insurance that opened up new ways of thinking within the corporate realm. Customers are poorly served in this space and the economics don’t work that well and there’s a lack of transparency, which was increased by the Covid-19 pandemic. "Parametric" has become a way to address these challenges by offering better product features to customers and improving the insurers’ trust by making things more true, and more transparent. When you launch your own company with your co-founders, the team is the most important part of the equation: The most precious asset. You need to convince enough people to believe in you in order to build the best team that works well together. The first years aren’t that easy, you have to work extremely hard and be able to step back and criticize your own way of working. This is something you can’t achieve if you aren’t motivated and resilient, or able to take hits. But you always need to be surrounded by the right minds, energies, and beliefs. Brokers are definitely dominant in the corporate sector. They are very useful for clients to understand how insurance for corporates works. This is why we only want to work and ally ourselves with brokers for them to better serve their clientele. I believe that every link of the insurance value chain will be disrupted in the next 5-10 years. Think banking un-bundling and re-bundling! This is happening to us too right now. Some companies are going direct to consumers or corporates with their strategy (don’t be fooled). At Descartes Underwriting, we think this is a mistake...   BEST MOMENTS ‘Working as an insurer in the sector of natural catastrophes and climate change is extremely rewarding.’ ‘As a corporate employee, I used to use data to model the risk and process payments. Looking at wildfires – which is one of the fastest-growing risks in the world today due to climate change – we use AI neural networks to understand the locations and figure out how badly damaged the locations we analyzed were.’ ‘Parametric covers can be based on the number of casualties, the number of shops that must be closed in a specific location due to a lockdown, and much more. Still, the goal is to use parameters to make people whole faster.’ ‘There are plenty of conventions within the insurance sector. Most of all, insurance has a good reason to exist. Still, the industry was created 338 years ago. As an entrepreneur, you must evaluate and identify the rules that make no sense at all, break them and rebuild them better.’