Carbon’s next chapter: Growth equity and the future of delegated underwriting

Robin: Welcome everybody to this week’s InsTech Podcast. I’m delighted to say we’ve got another insurer with us today. It’s Carbon Underwriting, and I’m joined by Rebecca Ince, who’s the Chief Operating Officer of Carbon, and Mark Oldroyd, who’s the Chief Technology Officer. Welcome both. 

Mark: Thank you for having us Robin. 

Rebecca: Yeah, thank you very much for having us. Nice to be here. [01:00] 

Robin: Well, I don’t know whether you volunteered or whether we forced you, soon as we heard the announcement you made on the 30th June that, to use your own words, you’d made a significant growth equity investment with money from FTV Capital, we’ve been desperate to hear all about it. Rebecca, coming to you first, why go out and raise a whole lot of “growth equity”? What’s the thinking? 

Rebecca: Well, Carbon has grown significantly in its journey, and particularly since 2023, where we’ve grown from £150 million of premium to £450 this year, and we’ll be over half a billion next year. Private equity cycles go in three, five, seven-year cycles. Apiary were a great partner, but actually we need new investment to the next round. We have got significant growth coming, and we are very, very happy to have FTV on that journey with us. 

Robin: How did you go about it? There are well-known sources of capital. Did you go and tap up the usual suspects? What was the process? 

Rebecca: So we appointed a broker and then advisors to do our due diligence for us. Jacqui, our CEO, met 50 potential capital providers that she was introduced to. Several came through into the DD process, which had a very good competitive process, and many people believe in our journey and our story so far and our growth ambitions, which is great. And then a select few went through to the very last stages, and we were very lucky to have that interest, and we found a really good partner at the end of it. So we’re very happy with how the process has gone. 

Robin: Was it an auction? Did it go to the highest bidder, or were you looking specifically for some attributes? In the end, why did you pick FTV Capital? [02:00] 

Rebecca: It absolutely has to be the right partner for us. So FTV is Financial Technology Ventures. Technology is a really key part of our proposition here. We’re an underwriting firm, but harnessed by technology, and that relationship is symbiotic. So we wanted somebody who was interested in our technology side and could help us carry on developing that. And we’ve got massive growth ambitions, particularly in the US as well as internationally. FTV do have experience in the US, and they have US insurance knowledge and experience to help us with that. And so yeah, they’re a natural choice to be our new investor, and we’re very excited to have them on board. 

Robin: Mark, you must be licking your lips. A CTO with a lot of money at his disposal, presumably, and then an investor that has acknowledged the tech capabilities and able to help you as a high-growth financial tech services company. Where and how are you gonna spend all that money? [03:00] 

Mark: Yeah, it’s fantastic. We’re all really excited for what this next term brings, and the fact that FTV have really got behind what Graphene is our post-bind analytical, in-house, proprietary platform that we’ve built up over the years.  

So yeah, that investment’s really gonna go into accelerating what Graphene can do. Graphene’s really become that digital spine of Carbon. It connects underwriting, claims and operational workflows across the business to offer that single view of performance. So that investment will allow us to move faster, particularly around the analytics space, and I’m gonna say it early on, and AI as well. We’re in a really good place to squeeze the AI capabilities ’cause we are centralised. We don’t have those legacy systems. We’ve got that data in a standardised, structured format, which is all fantastic places to layer AI on top. So that’s where the primary focus is gonna be, to help underwriters make better decisions with a greater confidence. [04:00] 

Robin: So we got all the way to question four before you mentioned AI. But presumably your investors aren’t going to give you just a blank canvas to go out and spend — you have to make some kind of investment case for this stuff, do you? And tell them what you’re going to do and what it’s gonna cost, and put up a sensible ROI type case for it? 

Mark: We do, yeah. So everything we build has to be focused on our underwriting teams and our partners to be able to write better business and have a real tangible ROI at the back of that. Something that I can point to is our claims-matching AI service that we got up and running. It’s been nominated for two awards that we’re really proud of. So it’s a combination between the claims team and our quant team working together and implementing that throughout Carbon. So that’s one aspect that we’re focusing on. We’ve got many more exciting irons in the fire. 

Robin: So Graphene was built in-house. Is that the plan? Are you gonna continue to leverage the expertise you’ve built up over the last five years, or in-house, out-house? How do you see this new phase? [05:00] 

Mark: I think ultimately the answer is a bit of both. We’ve got a fantastic platform that we’ve built up already with capabilities that makes us unique. Where we seek technology, proven technology that will help us advance delivery, we will absolutely use that. But the intellectual property, I think the underwriting expertise and the workflows that we’ve built up and the expertise in-house, we’ll continue to develop that internally and continue to build on the IP that we’ve generated. So, a bit of both. 

Robin: [06:00] A lot was made at our agentic AI conference in July about this concept of intelligence capital — identifying the technology that will commoditise over time and making sure that you can protect what’s unique to you, in the sense of your data, your intelligence, your decision-making capability, and how you differentiate yourself from other people. It’s going to become incredibly important — that differentiation over time. Rebecca, back to you. In your role, you’re saying to yourself: What technology do we invest in? And then you’ve got to make some assumptions about what the delegated underwriting space is going to look like over a three-to-five-year view. What assumptions are you making? How do you see the space? Is it gonna carry on in roughly the same business model, or do you see it evolving in some way? What are you planning for? 

Rebecca: I think we’re planning to be on the front foot with whatever is coming technology-wise. So I don’t think bordereaux are going to go and spreadsheets in the way that we operate as a market. Unfortunately, the market does operate in that way, but it is also good that we do have a standard data model. We do have standard V5.2 bordereaux. I would love to say in the next three to five years I see a radical change in that. I’m afraid I don’t. I think the whole market would need to change, and we’ve got market messaging and money moves through the bureau. That’s very important. So we’re gonna absolutely remain able to do that. However, we are very lucky. As we’ve already touched on, there is no legacy tech here. We do have one data model. Everything’s in one place. So we are ready. [07:00] 

If other people and our partners are, we’re ready to connect to them. We’re ready to transfer data in different ways. We’re ready for whatever comes next. We want to keep building on our capabilities, and we’re using AI for our analytics and to look after the cycle, help our underwriters as much as possible with insights. But I do think on the back end, I’m afraid bordereaux are here to stay for a little longer. But if anyone’s interested in trying not to use them, we’re ready. [08:00] 

Robin: It’s time for me to retire probably. I’ve railed against bordereaux for 15 years now, and they’re still there, and they’re going to outlast me by some considerable time. Going off script slightly — there’s this chicken and egg about all this, having spent some time in the US earlier in the year. You find quite a lot of people blaming the tech capability of the London Market because it insists on getting bordereaux, and yet we talk to companies like you, who are frankly prepared to move off bordereaux, have invested in the technology that enables you to do other ways. What’s really going on? Why is this not moved faster? Because there’s so many people who will claim that they would want to, “We want to get off bordereaux,” and so many smart providers of capacity who say, “We want to get off bordereaux,” and yet the shift never quite happens. Is it just that we’re going at the pace of the slowest? 

Mark: Yes, it’s a great question and one that comes up all the time. And look, when I started in this industry five years ago, I was horrified at the thought of a spreadsheet being passed around with risk data on it, going from counterparty to counterparty. But as Rebecca mentioned, it is an ecosystem. We are one part of that ecosystem. And, as much as we’d love to change it, we have to also recognise that we exist within it. I guess, to the question, I’d almost say both sides are right. So MGAs would say that they would share richer, more frequent data if carriers demanded it. On the other side, let’s say carriers would say they would consume richer data more frequently if MGAs could provide it, right? I think the reality is between those viewpoints. I think both sides are managing genuine operational constraints, whether that be tech budgets, mindsets, or just things that have always been done that way. Maybe people have just been around and always done it that way, and don’t know what the future might look like. So I think it sits in between those two viewpoints. For technology, I think it’s a case of removing that friction. So if we can make easier to standardise, collect and analyse data regardless of source. I’d hope that conversation moves from data formats into what decisioning, what insights we can get from that data. And I think the companies who can lead on that front, get the insights, are the ones that are gonna eventually win out. 

Robin: Back to intelligence capital again — it’s just more insight, more knowledge of your business, and you’ll be better at what you do. Rebecca, looking at the business and turning more to business strategy, are you hell-bent on just this current business model, delegated underwriting only? Or would you spread your wings in any way, do you think? 

Rebecca: I don’t think so. I think we’re gonna stick to our knitting on this one. It’s what we specialise in. It’s what we think we do well. However, we would like to carry on looking at are there other classes of business that we could go into, and we are looking at geographical expansion. I touched earlier on FTV being a good partner for us as we look to carry on growing in the US. That’s definitely a focus for us. But other markets in Europe and around the world. So no, staying in delegated. Might do a little bit of reinsurance somewhere down the line, ’cause it’s got the same model of ingesting large datasets. But open market is not in our plans at all in the next five to seven years, if ever. So more of the same, and just doing bigger and better. 

Robin: Tell us about these global ambitions, particularly the US — why wouldn’t you go there? But how are you doing it? What have you got on the ground? What are the plans? Tell me a bit about that. 

Rebecca: Yeah, certainly. So we—most of our business is in the international markets,[11:00] particularly in Australia, Canada, a bit in the EU and the UK. So the US is the obvious market that’s missing for us, and it’s the largest MGA market in the world. So it’s definitely one that we could go into, particularly starting in property and casualty. We’ve hired Jeff Bright as our property underwriter, very experienced veteran US property underwriter. And we’ve just hired a US casualty underwriter. More to follow on that shortly, but we’re not able to announce that yet. So we’ve got the right skill. At the moment, we’re not putting boots on the ground, though that will be in the plan in the next three to five years, I think. That’s definitely something we’re looking into. We have an MGA that’s writing some US business at the moment, and we’re looking to carry on building on platforms to carry on going into that market. So it’s definitely a focus for us for ’27 and on. 

Robin: I guess you’d like rates to stop plummeting in the way that they’re plummeting at the moment, before. 

Rebecca: [12:00] Absolutely. We do think there is still some rate-adequate business out there. But yes, you do have to be careful, and we do need to use our analytics and our tools to help us make sure that we remain rate-adequate, and that we can find the pockets of business that are, and there definitely are some. 

Robin: Mark, how big is Carbon these days? In terms of metrics, how big is the workforce, and you’re going to expand from there. Where are you now? Where are you gonna end up? [13:00] 

Mark: Yeah, look, it’s certainly bigger than the handful of people we had right at the beginning, rattling around in the office. Yeah, in the last three years we’ve tripled in size, and over the next six months we’ll be over 100 people essentially. So the growth has been aggressive but controlled, I would say. And we’re definitely in that scale-up phase. But I think the question of growth in headcount is one metric. I think the other metric is our capability and what we can deliver with that workforce. And as we’ve mentioned, some of the projects that we’ve got our eyes on — our capabilities are absolutely expanding in this next turn of investment. 

Robin: We’ve had your MD, Ben Laidlaw, on here before, and he was spent some time rightly focusing on culture and the culture you’ve built up at Carbon, and the importance it has in how you work and how you recruit. Are you in any way worried that as you scale at the speed that you will inevitably find yourselves diluting that culture just because of the speed of growth and the fact that you reach a stage where it’s quite difficult to protect what you’ve built up in terms of culture? [14:00] 

Mark: Yeah, it’s a great question and one that we’re very aware of. So key that we maintain that culture. And culture actually at this stage of the business, I would say becomes even more important. As you quite rightly say, it becomes harder to manage. There’s just more people in the company, different faces around the office. But we do recognise, respect and actively manage the fact that Carbon success has always been built on the great people, strong partnerships and that willingness to challenge conventional thinking as well. We look for that in people who join the company, and we will continue to maintain a real strong focus on that. I think one thing I’m particularly proud of when I look around the company is the mix of people that we’ve got in and the diversity of their backgrounds. So not everyone’s from insurance. We have our quant, data and technology teams working hand in glove together across the company, which I think is something quite unique, and we’re really keen to protect as we scale. 

Robin: I won’t charge you a recruitment fee if you want to use this as a chance to do some recruitment. Are there any roles you’re looking for now? What are you after — make the case for Carbon. 

Mark: Yes, we have active roles now, I’m conscious that when this podcast goes out they may not be active anymore, but I would say keep looking at what’s active. But the overarching message is we are always looking for the best and the brightest. If you want to really put your stamp on delegated authority for a company that’s combining tech, data and different ways of working, come and see what we’ve got. Come and see the kind of teams that we’ve built, and you’ll be working alongside some of the best in the business from, as I say, from different backgrounds, all going towards one goal, which is doing Delegated Differently, to use our tagline. 

Robin: Is there a website or a somewhere where people can go and see what the active roles are? 

Mark: There is, yeah. All the active roles are listed on carbonuw.com. 

Robin: Well, having given Mark the right to recruit, I feel that I can now do a little bit of journalism here, Rebecca, because I really wanted to do this at the start, and I stopped myself. But you made an announcement that you raised significant growth equity investment, and then every single person in the world, including me, is going: how much did they raise? So how about giving InsTech a global exclusive on the amount of money you raised? 

[16:00] 

Rebecca: I’m very sorry to disappoint you, Robin. I’m not allowed to. My mother always told me not to talk about money, and so I’m afraid I’m not gonna be able to give you a number. We were very lucky that we’ve raised investment, and we’ve got a great partner. But I’m afraid for now we’re keeping that information confidential. So I’m gonna have to disappoint you. 

Robin: Yeah. I wouldn’t be doing my job if I didn’t probe a little bit. 

Rebecca: That’s fine. 

Robin: It’s time I did a bit of promotion of my own, because we’ve got our MGA event — an all-day event on the 24th of September coming up, The Golden Age of MGAs. And by the way, we called it The Golden Age of MGAs before the market softened at the speed at which it is now. So we had to quickly add to the tagline, “Building to win in any market cycle,” just because for some people it won’t be a golden age of MGAs this year. So the whole event will be talking about what the opportunities are, but how you have to do it in a resilient and smart way. And you guys have very kindly sponsored it again. How are you gonna use that slot? What are you going to talk about? 

Rebecca: So I’m going to moderate a panel at the event on capital diversification and the resilient MGA. I’m gonna be joined by Ben Laidlaw, our Co-founder and Managing Director here at Carbon, 

[17:00] 

alongside Philippa Berry, who’s the Head of Portfolio Partnerships at CFC Underwriting, and Jane Fenton, who’s the Executive Director at Gallagher Re. And we’re gonna be talking around practical routes to successful capital diversification, multi-carrier strategies, long-term capacity agreements, fronting and reinsurance access and patient capital structures that survive a full cycle. As you touched on, we are in a soft market. Rates are not where they need to be, but we can absolutely survive that and work with our capital providers through it. So we’ll be exploring some questions around that. 

Robin: It is so nice to have topics like that from people who actually are on the frontline rather than from consultants and advisors telling everybody else how they should do it. So thank you very much for coming to do that. Look, thank you very much for both for joining me, I really appreciate it. As you’ve listened to our podcast, you know that quite a lot of the time we are talking to tech vendors, and we’re giving the opportunity for them to create some awareness and educate. [18:00] 

But we treasure really the chance to get in front of people like you who are capacity providers and providing a business perspective. I’m sorry you couldn’t give me a world exclusive, but better luck next time — prepare yourself, ’cause I might ask again when we get to the 24th of September. You’ve both been longtime supporters of ours at InsTech, so we thank you very much for that support too. And thank you both for joining me. 

Rebecca: Thank you very much for having us, and have a good day. 

Mark: Yeah.