Israeli-based Psyber has developed an innovative insider risk assessment platform for cyber insurance. In fall 2021, the startup participated in the Israeli Insurtech Accelerator and had the opportunity to visit Hartford, CT. CEO and Co-Founder Noam Zolberg spoke with MetroHartford Alliance Content Manager Nan Price about the company’s experience launching an InsurTech startup and why they’re considering creating a U.S. presence in the Hartford Region.
NAN PRICE: Tell us about participating in the InsurTech accelerator.
NOAM ZOLBERG: The Israeli Insurtech Accelerator is an American-Israeli program created by partners Ayalon Insurance Company, Brokertech Ventures, and InsurTech Israel. It’s a very prestigious InsurTech program.
Psyber was one of four companies to participate in the second cohort. Dozens of companies applied. Part of the three-month long program included a road show to the United States where we visited Des Moines, IA; Hartford; and New York City.
NAN: What was your impression about Hartford?
NOAM: We spent an entire day in Connecticut networking and meeting with industry and InsurTech counterparts from state and local businesses and were exposed to the entire Connecticut innovation ecosystem. We also participated in an in-person pitch event with about 100 people, including representatives from various insurance companies, brokers, venture capitalists, and investment firms.
Hartford is a major hub for the insurance industry with access to everything from technology to subject matter expertise. You’re able to get in one room with so many people from across the ecosystem. Few places anywhere in the world can offer that without remote travel.
NAN: Does Psyber plan to create a satellite office here in Hartford?
NOAM: Providing cyber insurance for small and medium enterprises is one of the world’s largest and fastest growing markets. And one with the biggest need. With Hartford being The Insurance Capital of the World, we want to be near that market. We want to be near our end customers and closer to where decisions are made to develop that intricate relationship between our InsurTech solution and the people with this problem we aim to solve.
When we visited Hartford in the fall, we were very impressed by the State of Connecticut welcome and the region’s desire to attract innovation and promote the InsurTech ecosystem. We especially appreciated the opportunity to meet Hartford Mayor Luke Bronin during our visit and hear his business-minded presentation.
Our focus now is on raising our seed round. Once we’ve reached that goal we will definitely consider finding a location in the Hartford Region.
NAN: Let’s talk about the future of InsurTech and innovation.
NOAM: There’s a misperception about insurance being strictly regulated, very conservative, and perhaps not the most sophisticated. But the introduction of data analytics and applying new technologies to a current need is something no one can stop.
Progress and technology are making life better, for the most part, across any industry sector—in business, finance, and manufacturing. So, resist it as it may try, the insurance industry has been forced to adapt and adopt to emerging technologies to make anything from claims processing to risk reduction more efficient and accurate. It’s no longer possible to manually process the vast amount of data collected in the insurance sector, regardless of which part of the insurance industry. This is where InsurTech comes in to create efficiencies.
NAN: And how is Psyber’s solution aligned with the industry’s needs?
NOAM: Our solution is designed to solve one of the biggest challenges in the important field of cyber risk insurance. That sector of insurance is the most recent to develop. It started about seven years ago, when cyberattacks against the enterprise were becoming very sophisticated.
The cyber insurance sector doesn’t have efficient data to support accurate underwriting. And as that sector started to evolve, the demand grew bigger with deterioration and sophistication of cyberattacks while, at the same time, the ability to underwrite the risk hasn’t developed at the same pace. The rate of damages and claims has been growing faster than the speed that insurance companies can raise the premiums. So, the market is in a weird failure situation.
Psyber is meeting that challenge by providing the first of its kind underwriting solution for the biggest cause for claims in cyber insurance: people’s behavior. Technological failures represent about 20% or less of the causes for cyber claims. People’s behavior, whether it’s malicious, negligent, or impulsive, is the biggest contributor to cyber claims.
Our solution provides a unified risk score for an organization based on the potential risk of its employees while protecting their privacy and anonymity. With this information, the insurance industry can more accurately assess the risk as they underwrite policies.
Psyber’s solution is developed based on what the customers want, so it will be easily absorbed and adopted. We’re developing partnerships with insurance brokers, carriers, and companies to gain their valuable insight. Our goal is to develop a solution to meet what the market needs, not what we feel they need.
We also understand our place in the “food chain” and price our service accordingly. We bring innovation to a segment that, for the most part, is trying to use yesteryear’s tools to combat tomorrow’s challenges. We feel confident we can make a positive impact on capacity allocation, underwriting, and risk score accuracy. Psyber can sustain and even enhance the industry’s profitability and growth.
NAN: Can you share the biggest lesson you’ve learned in your entrepreneurial journey?
NOAM: Over the past five years, I’ve been coaching and consulting for startups in the cyber security and homeland security sectors. I’ve seen companies invent and develop brilliant technologies and solutions for a need or a problem the market wasn’t willing to pay for or didn’t feel the pain.
When I set out to research and create Psyber, I spent a great deal of time making sure there was a need and a market willing to pay for a solution and determining what would that solution needed to be—sort of a preliminary advanced product market fit.