In 2015, Hans Zimmermann co-founded Sustema AG together with Navraj Basra in order to transform publicly available data into improved commercial underwriting performance. The behavioral analytics cloud provides insurers with an objective and comparative behavioral analysis of over 17000 companies worldwide. Recently, Sustema successfully closed their seed funding round. We want to talk with Hans about his experiences in the entrepreneurial world & early stages of his startup as well as his experience of finding a co-founder and leaving the corporate world after 30 years of work experience.
Hans, what drives you personally and why do you think data can build a foundation for commercial insurance companies?
After many years in the insurance industry, I wanted to do something different, but still, I was looking for an activity where my background is relevant. It’s been a quest for most of my career in the insurance industry to improve the availability of relevant data to the underwriting process. Data is a key necessity for a proper underwriting process. The insurers have been collecting vast amounts of data all along. Today’s technology allows for a much more efficient and consistent process of collecting the data.
How did the idea for your business come about and when did you know you had the right idea?
The underwriting process is more art than science. What do I mean by that? Yes, insurers are using a great deal of data points (technical exposure data, claims data, legal etc.). But in the end, it's not an exact exercise. The underwriters are asked to make many judgment calls. One important assessment the underwriter must make is whether a client deserves the insurer's capacity and how much. And this decision is not only hinging on the result of the underwriting assessment but also on topics like reputation exposure, social impact a company may have, the ethical compass of a company and many more. These assessments are currently being made by the individual underwriter based on his / her impression and information she/he just happens to have available. As a chief underwriting officer, I would always ask the underwriter why you would allocate that much capacity to a client? Time and again, I received an answer which was based on the underwriter's impression and not on data. That’s where it all started. I asked Navraj whether it was possible to collect data in the public space without relying on brokers or the clients themselves. When he answered positively, we got going.
How did you first get into contact with your co-founder?
That was more of a coincidence, because it just happened that Navraj and myself, we used to work together at the same insurance companies for the last three years before we started Sustema and it was actually him with other people who wanted to try something new and invited me to help them- and now we are here, it's Navraj and myself, and we have gone through quite a time where we have now finalized the financing round and yes, we are really happy and excited to go about our vision.
Do you have any advice on how to find the right co-founder?
No is the short answer, and as I said before, it was really a coincidence that we came together, but it's also, maybe in hindsight, the good thing is that we are totally different from our background -I mean he's an engineer, I've been an underwriter and an insurance person all along and I think for what we are pursuing here, that's exactly the right combination.
After about 30 years of working in the corporate world, you decided to leave to go into business for yourself: What were your reasons for leaving the corporate world & what was your motivation to found your own company?
At first, I wanted a break and more time for my family. When Navraj and I started the discussion, I wasn’t sure where it would lead towards but was intrigued by the idea and the fact that we could work in such a small team (just the two of us). Only later, when we started to talk to insurance companies and received very positive feedback, did we decide to found Sustema AG.
How did this decision influence your personal life and what's the best thing about being an entrepreneur?
First of all, I realized that I was no longer absorbed by the constraints of a large corporation and that we could tackle issues in a much leaner fashion. It gives me the freedom to manage my time. I'm no longer boxed into an organizational framework that dictates the daily routine. The best thing of being an entrepreneur? It's difficult to say, but the fact that one is truly responsible for making or breaking it – the vision that one has put out there. In our case, bringing something fundamentally new to the commercial insurance industry, behavioral analytics, that brings a great deal of return and efficiency to the underwriting process.
How did you reach out to your first potential customers?
We just called them up - no, seriously, between the advisors and myself, we have quite some experience in the insurance industry. All of us, most probably, around 30 years, so we know a lot of people - still know them- and we have good networks in the US, London, but also in Europe. So, from that perspective, it's rather easy for us to get in touch with potential customers
What habits helped make you successful?
First and foremost, it was our belief in our vision. But also endurance and the ability to adapt by both Navraj and myself.
Have you always thought of going into business for yourself, or has this thought arisen over the years?
Yes, I did but never had the courage for the final step. At that time, I would have given up a position of certain comfort. But this time, it was more a logical progression from where I was and an exciting opportunity.
What were some of the biggest lessons that have impacted the way you work? What was the lesson, and what was it like before and after?
I can't think of a big lesson other than believing in what you are doing, relying on your own capabilities rather than having to accommodate to a large corporate environment.
What key activities would you recommend entrepreneurs to invest their time in?
Again, I’m not consulting anybody here. But my takeaway is that it is important to listen to other people, but it is even more important to come to their own conclusion.
What an impressive journey of yours: As an expert in financial services, behavioral analytics and insurances: What advice can you give somebody who thinks of going into business themselves?
I don’t think that I’m in a position to give any advice to somebody. Each individual has to determine for themselves when it is right to create their own business. Look at Navraj and myself. We both are at a very different juncture in our lives. Navraj is at an age where he took a lot of risk giving up a career in corporate life, whereas I was at a point where I could have taken up golf instead or done something else. Maybe it was that combination of ours that made it work.