EIP chief executive Ross Sinclair on parametric insurance and why AI-accelerated coding lets EIP bet on new products like a venture capital firm.
EIP’s platform is the insurance layer inside apps run by the likes of Monzo: embedded distribution built on the same plug-in infrastructure model as the rest of fintech. In this week’s Five Minutes With…, Fintechly speaks to EIP chief executive Ross Sinclair about parametric insurance, AI-accelerated product development and insurtech valuations.
Can you tell us about yourself and what brought you to this point in your career?
I started my career in insurance working, at different times, as a broker and underwriter in the UK market, before eventually moving to a role as Insurance Managing Director at Carphone Warehouse (Europe’s biggest retailer of phones in the late 1990s). In this position, I was responsible for building an insurance business for the retailer, one that would eventually yield over £100m in annual profit across 13 countries.
In 2004, my business partner Terry Alford, whom I had met at Carphone Warehouse, and I decided to start EIP. In its early iteration, EIP was a dedicated consulting business working with companies that wanted to offer embedded phone and device insurance. In 2010, we decided to pivot and transform EIP into a cloud-based embedded insurance platform that suppliers and partners could plug into to reduce their lead times and implementation costs when bringing new products to market. We also offered clients the ability to easily switch a supplier without disrupting other partners. Since then, we have acquired a client roster that includes the likes of Monzo, Vodafone and Media Markt.
What problem or opportunity are you most focused on right now?
With the advent of AI and prompt-driven software development tools – otherwise known as ‘vibe coding ’ that can write code in seconds, the reality is that many SaaS companies will need to fundamentally revise their business models.
However, these new tools are completely rewriting the economics of experimentation, and we have spent the last 12 months exploring how we can use this technology to pivot our distribution model and expand our offering to customers. Using this type of AI-accelerated coding, alongside our 20-plus years of industry experience, we can develop greenfield products for customers much more quickly and at a much lower cost.
Reducing the cost and risk of product experimentation significantly widens the number of new opportunities we can pursue for customers. Much like a venture capital firm might invest in 10 companies in the hope that three of them will make some money and one will be a ‘racehorse’, we are doing the same thing – but with customer solutions rather than money.
What do you think deserves more attention than it is getting in your part of the industry?
They have been around for some time now, but I don’t think enough attention is given to parametric insurance policies. Parametric models link payouts to predefined, measurable triggers such as wind speed or productivity levels, meaning that compensation can be released on a pre-agreed basis as soon as these triggers are met. These policies essentially directly address the “moment of truth” for any insurance product: the claims experience, which has historically been complex and drawn out. Parametrics turn the claims process on its head, giving people access to compensation quickly when things go wrong. This helps prevent the cash-flow challenges that can arise during prolonged waits for payouts.
Looking forward, I expect to see more attention turn to the use of parametric models for business interruption. Their ability to mitigate the immediate impact that an event, whether related to weather, cyber risk or other, has on a company’s ability to generate revenue makes them a particularly strong fit for the business sector.
What do people most often get wrong about what EIP does?
It depends upon the customer – some view us simply as a multi-country broker, some as a sophisticated tech provider and others as an embedded insurance consultant. The reality is that we are all three and often we use different elements of these capabilities to deliver a project, even if we don’t necessarily surface these specifically in the commercials.
The basic concept of embedded insurance is simple, but the delivery of programmes that work and scale successfully is much more complex and demands a variety of skills across the design, execution and management phases. Clients sometimes don’t necessarily appreciate the multitude of factors that come into play when building a robust, best-in-class embedded proposition. Our management team comes from a blend of deep insurance, retail, technology and broking backgrounds, with many team members having more than 25 years of experience, so we can embrace complex, multi-country, multifaceted projects with relative ease.
What do you expect to rise up the agenda over the next year?
The InsurTech industry is facing increased pressure to justify its high valuations, and I expect this to crystallise over the next year. Insurtechs will need to prove their worth by converting their ‘pitch deck’ promises into tangible financial performance and justify their valuations to investors with strong revenue and profit streams. This will become increasingly difficult as AI makes software development accessible to the masses and insurtech products become rapidly commoditised.
Voice-led AI is also becoming a key area of discussion, and insurers are now shifting from AI experimentation to scaled deployment. However, insurance is a heavily regulated industry, and firms cannot afford to ignore the associated risks. While there are significant benefits to using AI in underwriting, fraud detection and customer service, there are certain regulatory dangers. The firms that come out on top will be those that balance AI implementation with operational oversight, transparency, consistency and auditability.
What’s the one question about EIP we should have asked, and what’s your answer?
‘How did we get here?’ One of the things I am most proud about is the fact that we have scaled since 2004 without any external funding. This is a testament to our incredible team, our commitment to innovation and our long-term partners and clients.
We have never stood still. We’ve evolved from a consulting business to a SaaS platform, then to a broker, to a data specialist and now an AI-enabled company, and I think that’s been key to our success.
