Introducing CYLO, an Experimentation Case Study

I frequently get asked about how I approach experimentation in a corporate context. We recently launched a new product in AU and NZ and thought I’d share how experimentation was embedded throughout our approach.

Cyber protection for small businesses

CYLO (pronounced Silo) helps small businesses address the financial, operational, reputational, and legal consequences of a cyber-attack. Ransomware, email compromise, phishing, and AI-assisted scams are common threats small businesses face and cyber insurance is a safety net that can assist in safeguarding business operations by helping with the costs associated with responding to, and recovering from, a cyber-attack or incident. A single incident can put the viability of a small business at risk.

The genesis of CYLO began three years ago as a mere data science experiment within Firemark, IAG’s Innovation and Venturing Hub. The objective? To understand the intricacies of cyber risk on our existing customer portfolio. As we dug into the problem, we recognised an emerging opportunity that was too significant to ignore. How might not only help protect against, but also help prevent, these events from occurring? The experiment to combine assurance services with insurance, tailored specifically for the needs of small businesses (the backbone of the NZ and AU economies) was born.

Embedding experimentation

Experimentation is underpinned by strategy. We initiated the building and testing phase in our Singapore (SG) Lab. This approach allowed us to fly under the radar of our AU & NZ competitors while also providing the opportunity to iterate, refine, and hone in on product/market fit. Additionally, we gathered invaluable customer insights and helped optimise our offer and distribution channel strategy while setting the stage for expansion into SE Asia (more on this later).

The insurance industry is fraught with legacy systems, so the team developed an end-to-end digital platform, transforming the traditionally prolonged and manual insurance process (often still paper based) from days or even weeks to mere minutes. CYLO demonstrates the power of the Firemark Collective. To deliver the first assurance service, we partnered with our Corporate Venture Capital (CVC) portfolio company, UpGuard , renowned for its cybersecurity expertise.

This partnership not only enhanced the value proposition of CYLO, but also exemplifies the 'leverage' we can get from our CVC portfolio. UpGuard's track record of monitoring businesses for data breaches and its suite of cybersecurity tools have been instrumental in fortifying our value prop. It lays the foundation to add incremental assurance services like back-up and recovery, password management, end-point protection, and cyber training/education.

Importantly, as part of our experimental strategy, we specifically chose to spin CYLO out of IAG as an independent, external agency (also an experiment). This was designed to accelerate our pace - unburdened by internal platforms - and to develop deep, specialised expertise for this complicated market.

Importantly, we didn’t just take an experimental approach to development. We are also doing so for launch. Pursuing a dual approach – we introduced CYLO to the market via brokers in AU and direct-to-consumer under the AMI brand in NZ. This is designed to facilitate cross-market and cross-channel learning, informing future prioritisation and subsequent iterations.

The road ahead

As we reflect on our journey, we are thrilled to announce that CYLO is live Trans-Tasman, and this new 'start-up' has sold their first policy. What does the future hold?  We laid out the vision - raise external capital to fuel growth and reduce IAG's ownership stake to liberate CYLO from corporate constraint ‘suffocation’ and allow them to operate as the start-up they are. Then, extend beyond AU and NZ, using our connections back to SG as a springboard to move from start-up to scale-up (e.g. into SE Asia as noted above).

The road ahead will be messy, but the prospects of redefining the cyber insurance landscape and helping our small business customers is clear.

Congrats to Krishna Nagashwaran and the entire team on the launch of CYLO. The team persevered through leadership changes, corporate restructures and a raft of 'compliance obligations' to get this into the hands of customers.

If you would like to know more about my approach to corporate innovation and venturing, send me a message.