Artificial Labs: Why We Invested

Augmentum Fintech
6 min readFeb 6, 2024


By Reginald de Wasseige, Principal at Augmentum Fintech

There are considerable venture-scale opportunities within the insurtech space, especially in technologies that are optimising the core functionality of insurers. Despite its immense scale, this multi-trillion dollar global market has been one of the laggards in embracing the opportunities presented by new technologies versus other industry verticals. However, we believe the market is changing at rapid pace.

We are pleased to share Augmentum is leading a £8m investment round in Artificial Labs (“Artificial”).

David, Johnny and the entire Artificial team have built what we believe is one of the most exciting businesses in the insurance industry. The funding round will further strengthen Artificial’s position as one of the leaders in algorithmic underwriting, as they strive towards achieving their goal of a truly digital London Insurance Market.

We’ve collated our thoughts on why we believe now is the right time to invest in the space.

Commercial specialty insurance and opportunities for innovation in the core stack

Artificial is active in the large market of commercial insurance, with a focus on specialty risk — insurance made for businesses that need bespoke coverage. These policies may involve high-risk holdings that are not usually covered under standard business insurance policies due to their size, complexity, or risk profile.

A simplified overview of the P&C insurance industry

While standard risks are generally placed by local insurers, specialty risks are placed in hubs with global coverage and expertise. Sourcing more than $91B in insurance premiums annually — of which $60B within the Lloyd’s of London market — the London Insurance Market (“LIM”) is the largest international hub for specialty insurance.

Inherent to the complexity and intermediated nature of commercial insurance, we have seen investments in technology lagging behind other sectors, leading to a negative impact on margin across the value chain.

“… the technology landscape in many commercial insurers remains hindered by legacy systems. Based on our [McKinsey] observations, anywhere from 30 to 40 percent of underwriting’s time is spent on administrative tasks, such as rekeying data or manually executing analyses.”

Via McKinsey — read the full article here

Brokers and underwriters in the London Market continue to rely on manual assessment of risk, engaging in lengthy multi-party negotiation processes. As a result, it can take 8+ days for a broker to receive an underwriting decision.

Putting this into perspective versus the size of the market, infrastructure software in this space has great potential to improve efficiencies and optimise cost.

The case for algorithmic underwriting and follower syndicates in the London Market

Within the London Market, instead of having one insurer carry the risk, complex policies tend to be distributed amongst multiple insurers with one lead insurer who sets the price, and multiple follower insurers who participate at the same terms.

This allows insurers to underwrite large, unusual risks without facing over-exposure on a single risk in the event of default.

Improving the overall process thanks to algorithmic underwriting for smart follow

The opportunity for digitisation is strikingly apparent in this follow market, where follow underwriters do not set the price, but instead “follow” into the risk. The nature of these dynamics lend themselves to a more streamlined process that should take minutes rather than days.

This is where algorithmic underwriting for smart follow comes in; underwriters program algorithms powered by multiple data sources to determine if a risk fits within the parameters of their risk appetite and responding in a matter of minutes when solicited. This compresses the time to quote significantly — a step change in the underwriting process.

Artificial is making waves in the Lloyd’s of London market

Enter Artificial, who are redefining how the insurance industry intelligently and efficiently deploys capital into the market. Over the past years, the team has built a core infrastructure software, making the entire process from data ingestion through to underwriting more efficient. Their software sits at the core of the insurance stack of the future, allowing parties across the value chain to benefit from their solution in two key ways:

1. Artificial works with brokers streamlining the creation and processing of insurance contracts with their Contract Builder product.

Lockton partners with Artificial in the UK to implement new digital contract builder — via Artificial here

2. Artificial also enables any insurer to set up an algorithmic underwriting program; rather than brokers going through the time-consuming process of searching for follow capacity and speaking to multiple individual underwriters, they send details of a specific risk to syndicates using the Artificial platform and receive instantaneous offers to follow the risk if it fits the underwriters’ predetermined appetite.

Apollo and Artificial Labs announce Smart Follow collaboration — via Artificial here

Overview of Artificial’s platform capabilities

With established partnerships throughout the value chain, Artificial’s system enables end-to-end data flows, limitless integrations, policy management and contract building tools — all within one automated underwriting platform. These act as the central cog in the value chain, connecting data between brokers, underwriters and the marketplace.

… and there is growing appetite from funders to deploy capital, cost effectively

2023 was the year that insurers woke up to the true potential of automation in underwriting processes, and the promise that algorithmic underwriting holds.

Digitisation is top of mind for the C-suite of all insurers, driven by a combination of the following four areas:

  1. pressure on costs
  2. increasing number of disparate data sources
  3. toughening regulation mandating new standards around digitisation (Market Reform Contract and Core Data Record)
  4. the advent of new market entrants

We firmly believe that the era of algorithmic underwriting will redefine market dynamics in the insurance space.

As more sophisticated ‘smart follow’ underwriters enter the London Market, we will see a significant transformation in the process of underwriting risk. The most adept lead underwriters, equipped with substantial auto-follow capacity, are poised to become highly sought-after by brokers seeking to place business.

“As this unfolds, carriers may have to weigh up whether not adopting certain tools in the underwriting process leaves them at risk of being outperformed, particularly on expense ratios, which would seem the likely area where benefits will be made.”

Via Insurance Insider — read the full article here

Backing the right team

From our first interactions with co-CEOs David King and Johnny Bridges, it was clear that they have ambitious plans for the future of insurance.

The Artificial Team

Their traction to date and momentum is impressive; they work hand in hand with some of the largest insurance organisations in the world and we believe that time is now for them to capitalise on the tailwinds behind algorithmic underwriting and the broader digitisation of the insurance industry.

In Artificial we see a company that has innovation and tech at its very core — a company that has the potential to become a hyper scalable business with a truly unique proposition.

We are extremely excited to be leading this Series A+ alongside existing investors; FOMCAP IV and MS&AD. We’re looking forward to working with and supporting the team as they enter their next phase of growth.

If you are a founder building in the insurance space, the Augmentum team continues to look for further category defining propositions. Please do reach out if we have not met!

Recent Artificial News

Apollo and Artificial announce smart follow collaboration — via Apollo here

Martin Reith becomes chairman of Artificial Labs — via Artificial here

PPL & Artificial Labs team to redefine the outlook of digital placing for the London Market — via Reinsurance News here

Lockton partners with Artificial in the UK to implement new digital Contract Builder — via Artifical here



Augmentum Fintech

Augmentum Fintech is Europe’s leading publicly listed fintech fund.