CatX’s Altier: “Insurance is this quirky, interesting thing that no one really pays attention to”
Like many in the industry, The Insurer TV’s latest young meteor never intended to work in insurance. Initially a consultant at Baringa, Benedict Altier became fascinated with the sector, ultimately deciding to found CatX.
“I was a consultant, initially, in asset management, because I thought that was a cool, fun-sounding one. But then realised, actually, insurance is this quirky, interesting thing that no one really pays attention to. So, I fell in love with the sector,” said Altier.
The idea behind CatX is to increase the insurance market’s capacity by structuring index-based coverage with shorter durations, appealing to investors often wary of insurance due to its propensity to trap capital.
“Our mission is to introduce new capital to insurance. While insurance excels at managing risk, that risk remains largely concentrated within the sector," Altier explained
One example of a short-span cover developed by CatX is an ILS cover for satellite launches, as Altier explained to sister publication Parametric Insurer earlier this year.
“It’s essentially parametric, as it results in a binary payout: either there’s a loss, and it's evident, or there isn’t," Altier said. "You are on risk for such a short period of time – just about 20 minutes during the launch. Then, the capital can be moved to another opportunity."
Like many start-up founders, Altier is used to going it alone. But seeking a co-founder for CatX, Altier was drawn to Lucas Schneider on a student trip to Colombia, noting his excellent approach to in-flight slumber.
“I was organising a trip to Colombia. The first time I saw him [ Schneider] was on a flight, and he had a full setup. He had the sleep pillow, the eye mask, everything. I thought, ‘This guy's got his stuff together. This is the organisation I need for my chaos,’” said Altier.
One of the toughest challenges CatX has faced, according to Altier, has been convincing Silicon Valley investors to consider the cautious world of insurance.
“The hardest part is dealing with rejection, especially from Silicon Valley investors unfamiliar with insurance. You get a lot of no's, but it's worth it when you get that one yes," Altier said. "There is a complete communication failure between the insurance industry and Silicon Valley. Start-ups there often adopt a 'sell, sell, sell' mentality, which doesn’t work for insurance."
Another challenge has been persuading insurers to focus on more than just renewals, especially leading up to the critical 1 January period.
“An interesting one with the way the insurance world works is that funds have a completely different calendar. So we've had for the past two to three months more funds than we ever had, and they're more willing to deploy capital than they've ever been able to. And the insurance world has been winding down, preparing now for 1.1 when things start to ramp up,” said Altier.
Although Altier is willing to dance alone, the success of CatX is attracting attention, leading to larger names joining the firm, such as retro broker John Wood, formerly part of the retrocession leadership team at Aon’s Reinsurance Solutions.
So watch the latest episode of Young Meteors with Altier before your boss is asking why you can’t structure an ILS like CatX.