Our work begins
Today, we are so proud to announce Shepherd’s first product offering is live in the construction insurance marketplace. After a year of marketing for capacity, crafting our underwriting program, and building out our policy admin platform our doors are finally open for business.
We’ve teamed up with some of the world’s best carriers and reinsurers led by Core Speciality. Together we'll bring much needed excess capacity to brokers and contractors across the country. Greenlight Re, an early investor in Shepherd, will play a significant role as reinsurer on our program’s panel. Shepherd’s core thesis is that contractors who invest in technology to be safer, more productive, and more efficient are, in turn, better risks. We’re excited to be aligned with Procore, one of the top technology companies in all of commercial construction. With this partnership we are launching a first-of-its-kind program in which customers can leverage their construction tech usage in order to directly benefit their underwriting results.
The road ahead of us is long, and it will require a tremendous amount of discipline, focus, and execution in order to realize the new commercial insurance model that we only dream of now. But today is a massive milestone, and we are incredibly excited to start this next chapter.
Shepherd's first insurance product will be Excess Liability, with an appetite for writing the lead umbrella or following form excess. Our initial focus will be on middle market contractors, and we’ll support both annual (“practice”) programs as well as project-specific covers (including wrap ups).
We are deploying capacity in segments up to a maximum limit of $10M, dependent on a variety of factors regarding the nature of the risk. We expect most Shepherd policies to attach within the first $25M of overall coverage – addressing the major capacity constraint that has been plaguing contractors over the past several years.
Our appetite is broad and includes most construction classes as well as geographies within the US. Shepherd policies are backed by Core's StarStone Specialty Insurance Company paper, which is A- (Excellent) rated and financial class size XI. The team at Core brings a wealth of experience in construction underwriting, and our program will complement their existing portfolio of SMB contractors.
Empowering our distribution partners
In the construction casualty space, the role of the broker agent is incredibly important not only as a representative of contractors, but also as an advisor and consultant on what is very complex coverage. At Shepherd we intend to empower brokers with the tools to be successful, rather than look to disintermediate.
Working alongside our initial set of distribution partners, we will optimize for flexibility, speed, and quality underwriting. For any new submission made to Shepherd (email us at firstname.lastname@example.org), our brokerage partners can expect to receive a response within 24 hours, including appetite to quote, minimum possible attachment, and maximum available capacity for their client.
The first version of the Shepherd platform serves our team internally, focused exclusively on underwriting efficiency. In order to make things incredibly easy for our broker partners, we’re accepting submissions “as is” via spreadsheet or PDF and then using our digital tools to quickly ingest exposure data into our platform. Using Shepherd, underwriters are able to generate indications within a matter of minutes, and quotes within a few business days — a process that normally can take anywhere from 30 - 90 days on average.
Over time, we intend to open up our platform to brokers, clients, and partners. We imagine a not-too-distant future where a large majority of the interactions about accounts are self-service for brokers and aimed at maximizing their time through increased transparency. We’ll spend the next several months fine-tuning our model and approach, building the necessary features for this next phase of our platform.
Building the right team
The most important thing we’ve accomplished in the last year is the assembly of a truly unique and diverse group of talent. We have brought together the very best of Silicon Valley product and engineering alongside rising stars in the underwriting community.
The first customer of Shepherd is our very own underwriting team. We are an in-person and office-based culture, contrary to the rising trend of remote-first companies across most tech verticals. We were intentional about this decision early, largely because of the unique and domain-specific problem that we’re aiming to solve. What better way to accelerate our own learning than to combine engineers and underwriters into the same room.
We enter the construction casualty market not as tourists but as existing permanent residents, having drawn on teammates with first hand experience underwriting in this difficult class. The nuances of successfully underwriting in construction are both art and science – and we believe there is an opportunity to automate the science in order to enhance the art.
Partnerships to last
In Core Specialty, we have identified a carrier partner that not only believes in a similar set of values, but also shares our enthusiasm for innovation in underwriting and enduring industry impact. Recapitalized in November 2020 out of StarStone US, the Core leadership team led by Jeff Consolino brings a unique energy as a capacity provider, making it easy to envision the Shepherd and Core partnership as a long-term engagement.
Procore is one of the major success stories in the short history of construction tech. Founded in 2002, they have built both a platform and marketplace that is used daily by thousands of contractors across the commercial landscape. When selecting an initial technology partner, we gravitated towards Procore given their broad adoption and deep data set. As we leaned in to study Procore’s impact on projects, we consistently found that contractors who use the Procore platform tend to outperform their peers in a variety of metrics related to safety and risk management.
The early results of our data studies have catalyzed this initial launch partnership, and as we continue to work side-by-side with the Procore team we’ll only be able to broaden the use of this new data as part of Shepherd’s underwriting approach. We are laying the foundation now for an innovative insurance model that personalizes underwriting at scale.
One year from now
From today forward, almost nothing about our business will be the same. This is a moment we’ve worked so incredibly hard for, and yet we are only just beginning our journey. We’ll spend the next several months closely studying our model, iterating where necessary, and continuing to improve the underwriting experience that drives our unique efficiency.
We’ll also be listening closely to feedback from our distribution partners – by delivering a tech-enabled services model, we’ll constantly be reporting outwards and gathering data on how well we’re delivering for both brokers and their clients. During this time, we’ll keep our appointments limited to ensure we meet the high standard we’re setting ourselves.
Despite the temptation to grow quickly we will remain disciplined in our commitment to a long-term and sustainable underwriting portfolio. We have big plans in 2022, including launching primary General Liability and Commercial Auto for contractors – and we intend to use this time to showcase Shepherd’s staying power in the construction market.
Above all, we’ll be putting in the work necessary to build an insurance company that rewards the best commercial contractors – these amazing companies who create our built world. This is the insurer they deserve. To all of our friends, family, and partners who helped us get to this day, thank you. We can’t wait to show you what’s next.