(This Q&A captures the key takeaways from the Insurance Innovators Unscripted podcast aired on November 21, 2019, where Abel Travis interviewed Jack Kudale, founder and chief executive officer of Cowbell Cyber)
Question: Tell us about your history prior to founding the current company.
Jack Kudale:25 years of enterprise software experience, starting from product management, engineering, distribution, head of software sales, led me to becoming a CEO of a cybersecurity company, board members at cloud security companies. Prior to founding Cowbell Cyber, I had the pleasure of working with three cybersecurity and risk management firms where I got most of my learnings, which I’m applying at Cowbell Cyber. The learnings along the way really helped me become a better person, better leader and more importantly, understand the power of relationships. And how to gravitate talent towards and behind the cause. You’ll probably see the progress we made at Cowbell in less than nine-month. We move really fast.
Question: What is Cowbell Cyber about and why you chose to really innovate the cyberspace, particularly within the insurance industry.
Jack Kudale: The story of Cowbell started with what we call the insurability gap. You look at the cyber security industry, which is 120 billion-plus market annually and lot of that dollar spent around prevention and detection of cyberattacks. On the other side, cyber insurance, which is looked at as the most technology savvy insurance line of business is under-developed. For example, why is cyber only underwritten once a year? especially when the risky is constantly changing. By comparison, workers’ compensation is underwritten on a semi-monthly basis and the construction, the builders report on a monthly basis with coverage and premium changing accordingly.
The strategy of risk transfer for cyber hasn’t materialized to a degree. The take-up rate in the market is under 10% for small to mid-size businesses. Today, most businesses are buying cyber insurance because somebody is forcing them to do so, most often a business partner. But it’s truly not really aligned to the cyber risk that they have as part of their infrastructure.
We looked at this opportunity and said, “Look, this is a major problem. It’s a cross-industry innovation”. It’s very complex problem to solve. And that means if we can break the code here, it will be hard to replicate. And so that’s when in January of this year, I started Cowbell Cyber with the goal to close the gap in insurability, especially for small to mid-size businesses. We are focusing on the root cause, the underwriting of cyber and need for continuous underwriting to properly assess cyber risks. And then the most important, the application of artificial intelligence and machine learning to normalize the data and produce what we call Cowbell Factors, our risk rating factors. This will lead us into offering a very comprehensive standalone and individualized cyber insurance policy to businesses as soon as January of 2020 that can be sold via the brokers and agents, who already have book of business in cyber.
Question: What makes your risk model and your scoring model different than some of the other platforms that are out in the market?
Jack Kudale:Great question. I call it the biggest pole in the tent for Cowbell Cyber. First of all, having a singular scoring factor it just not good enough. Every company is different. It’s like a DNA. Every company has a unique cyber posture. Second, many of the security ratings services are derived out of outside-in data and the infrastructure that is exposed to the internet. But if you truly want to understand the risk, the chaos is inside the organization behind the firewall. So, you need to combine the inside-in and outside-in, normalize the data and combine it with the latest threat level.
So we take an approach where “we are going to look at everything around the organization. We are looking at outside-in, inside-out, we are looking at the regulatory compliance, the lost cost, dark intelligence, business interruption and varying data sources, right, up to 20, 30 of them and normalize what is collected so you can get a true understanding of the types of exposures.
Cowbell factors take a granular approach to risk. It’s real-time, it’s continuous, based on inside-out, outside-in, and normalization. It is based on proprietary and non-proprietary data using AI models. This is where the differentiation for Cowbell is, the biggest pole in the tent. This differentiates in terms of being able to truly understand, be able to align to and underwrite the risk for organization on a case-by-case basis.
We invite you to listen to the remaining of the podcast at Insurance Innovators Unscripted podcast aired on November 21, 2019where Abel Travis interviewed Jack Kudale, founder and chief executive officer of Cowbell Cyber. If you want to learn more about Cowbell, please visit: https://cowbell.insure/