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Interview with David McFarland, CEO and founder of Coterie Insurance

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A look into insurance and what the company means by “commercial insurance as a service”

With many people out of work around the US and world due to the ongoing pandemic, some are turning to freelance work to help supplement lost income.

It has also put a spotlight on company-provided insurance and just the insurance space in general. It’s something that all of us need – whether health, business, travel, etc – but many of us do not want to deal with it, as it can be a confusing, time-consuming process.

If you are a small business owner or freelance worker, insurance can definitely feel complicated, but the insurtech space is growing and looking to help with that. Coterie is one such company. By working with existing technologies and gig economies, it can streamline the process, while still providing the correct coverage.

I had the chance to talk to David McFarland of Coterie to learn a bit more about the company, how it works, and where the industry is heading in the future.

Check it out below.

Care to introduce yourself and your role with Coterie?

Certainly. I’m David McFarland, CEO and Founder of Coterie Insurance. 

What inspired the creation of the company?

I’ve been working in insurance for a long time, and I think it would be fair to say that technological innovation is not the industry’s strong suit. There are a lot of reasons for that, some of which have to do with the actual technical challenges involved, and some of which have to do with human challenges. 

In short, people typically don’t want to rock the boat, and that combines with the fact that, in insurance, rocking the boat is actually pretty hard. 

Still, I saw an opportunity to create actual efficiency – and a profitable business, that brings value to other businesses – in the insurance industry. So, I decided to build my own boat. 

In just a few sentences, what is Coterie?

We make getting business insurance easy, based on the assumption that most people don’t care about insurance, despite it being important and, in a lot of cases, legally necessary for businesses. 

We integrate seamlessly with a growing number of existing technologies that businesses already use – think points of sale, gig economy apps, small business software, etc – to offer insurance right where it’s needed, and when it’s needed. 

Because we integrate with the tools that businesses are already using, which have the data we need to sell insurance, we make buying insurance as easy as pressing a button. In addition to that, for freelancers who often don’t need an annual policy, we offer a flexible duration option that allows them to pay for insurance at the job-level (i.e. when they need it) and again, at the click of a button. 

Is your service meant for small businesses or is it more an enterprise solution?

At the moment, we’re more focused on small businesses and freelancers and have built insurance and technology solutions with them in mind. 

Can you break down how it all works? Say I’m a freelancer looking for basic, general liability insurance – take me through the flow from getting a quote to what happens in your system, etc.

Most freelancers are using freelance/gig marketplaces to find jobs that match their skills, which is exactly where Coterie comes in. 

We work with those marketplaces to create a fully integrated insurance solution that allows a freelancer to add insurance to any job they are taking through that marketplace without ever leaving that page.

They’ll see the cost of insurance for that job (or have the option to buy an annual policy) and can add it by simply checking a box when they accept that job.

You’ve described yourself as “commercial insurance as a service,” what do you mean by that?

The term “commercial insurance as a service” refers to the fact that we have a fully integrated insurance solution for our partners. 

We give them the ability to add value to their customers by offering the most streamlined commercial insurance buying experience on the planet, right from their flow. 

Do you have any competitors in the space, and if so, what are you doing differently?

We do have a few competitors – companies like Next Insurance, Thimble, and Bunker. What we do differently is that we are focused on an ecosystem approach to insurance. We are focused on non-traditional distribution channels, leveraging data that already exists to make the insurance buying experience simple. 

Additionally, we build our insurance and our tech. Some companies prefer to hook into other outside insurers; other companies are reasonably good insurers, but lack the tech integrations we offer.

By owning both sides of the equation, we’re able to offer the best product and the best experience for our customers. 

Do you have any tips for small business owners and freelancers on ways they can protect themselves and their businesses?

Insurance is one of the best ways. Having the right business owner’s policy or general liability policy is extremely important.

Our agents can help you figure out what’s best. Feel free to give us a call. 

Where do you see the insurance industry heading over the next 10 years? Do you think things will remain the same?

The industry will continue to change. We’re already seeing insurance start to embed in what we’re doing (Root is a good example). I imagine this will continue to happen as we use more hardware and software to make our lives easier. 

It doesn’t make sense to have all of these disparate processes, insurance being one of the biggest ones. I imagine the industry will evolve into being integrated into the systems businesses are using. 

Anything you’d like to close with?

We’re at the beginning of an exciting time in insurance. There will be a lot of changes and a lot of neat ideas that come out. I think the consumers will end up benefiting greatly from this, especially since insurers will be able to price more adequately. 

This means that people who are really risky will be charged more and people who aren’t as risky will be charged less. What happens today is that we have less risky people being charged more than what is right, since it is hard to distinguish who is who from the data we have. By accessing new sources of data that are convenient to the customer, we can fix that. 

I’d like to thank David for taking the time to answer some of my questions regarding insurance and Coterie.

Source: http://feeds.vator.tv/~r/vatortv/news/~3/L92gkqHsCuo/2020-05-08-interview-with-david-mcfarland-ceo-and-founder-of-coterie-insurance

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NVIDIA CloudXR Allows Hi-Fi XR Streaming via 5G Networks

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NVIDIA CloudXR Allows Hi-Fi XR Streaming Via 5G Networks | ARPost

NVIDIA CloudXR

Source: https://arpost.co/2020/05/26/nvidia-cloudxr-hifi-xr-streaming-5g/

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Visualizing the Countries Most Reliant on Tourism

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While COVID-19 is dominating headlines, another kind of emergency is threatening the lives of millions of people around the world—food insecurity.

The two are very much intertwined, however. By the end of 2020, authorities estimate that upwards of 265 million people could be on the brink of starvation globally, almost double the current rate of crisis-level food insecurity.

Today’s visualizations use data from the fourth annual Global Report on Food Crises (GRFC 2020) to demonstrate the growing scale of the current situation, as well as its intense concentration in just 55 countries around the globe.

Global Overview

The report looks at the prevalence of acute food insecurity, which has severe impacts on lives, livelihoods, or both. How does the Integrated Food Security Phase Classification (IPC) classify the different phases of acute food insecurity?

  • Phase 1: Minimal/None
  • Phase 2: Stressed
  • Phase 3: Crisis
  • Phase 4: Emergency
  • Phase 5: Catastrophe/Famine

According to the IPC, urgent action must be taken to mitigate these effects from Phase 3 onwards. Already, 135 million people experience critical food insecurity (Phase 3 or higher). Here’s how that breaks down by country:

Country/ Territory Total Population Analyzed (Millions) Population in Crisis (Phase 3+, Millions) Share of Analyzed Population in Crisis
Afghanistan¹ 30.7 11.3 37%
Angola¹
(24 communes in 3 provinces)
0.9 0.6 62%
Bangladesh
(Cox’s Bazar and host populations)
3.5 1.3 37%
Burkina Faso¹ 21.4 1.2 6%
Burundi 11.5 0.2 2%
Cabo Verde 0.5 0.01 2%
Cameroon¹
(7 regions)
16.1 1.4 8%
Central African Republic¹
(excluding Lobaye)
4.4 1.8 41%
Chad¹ 14.3 0.6 4%
Colombia¹
(Venezuelan migrants)
1.6 0.9 55%
Côte d’Ivoire 19.8 0.06 0%
Democratic Republic of the Congo¹
(109 territories)
59.9 15.6 26%
Ecuador¹
(Venezuelan migrants)
0.4 0.3 76%
El Salvador¹
(Eastern region)
1.4 0.3 22%
Eswatini¹
(rural population)
0.9 0.2 25%
Ethiopia¹
(selected areas in 6 regions)
28.7 8 27%
Gambia 2 0.2 10%
Guatemala¹ 16.6 3.1 18%
Guinea 10.1 0.3 3%
Guinea-Bissau¹ 1.3 0.1 10%
Haiti¹ 10.5 3.7 35%
Honduras¹
(13 departments)
5.1 1 18%
Iraq 39.3 1.8 5%
Kenya¹
(Arid and Semi-Arid Lands)
13.9 3.1 22%
Lebanon¹
(Syrian refugees)
0.9 0.3 29%
Lesotho¹
(rural population)
1.5 0.4 30%
Liberia 4.3 0.04 1%
Libya 6.7 0.3 5%
Madagascar¹
(Southern, south-eastern and eastern areas)
4.6 1.3 28%
Malawi¹ 15.3 3.3 22%
Mali¹ 20.5 0.6 3%
Mauritania¹ 4.1 0.6 15%
Mozambique¹
(39 districts)
5 1.7 34%
Myanmar 54 0.7 1%
Namibia 2.4 0.4 18%
Nicaragua 6 0.08 1%
Niger¹ 21.8 1.4 7%
Nigeria¹
(16 states and Federal Capital Territory)
103.5 5 5%
Pakistan¹
(Balochistan and Sindh drought-affected areas)
6 3.1 51%
Palestine 5 1.7 33%
Rwanda 12.6 0.1 1%
Senegal¹ 13.2 0.4 3%
Sierra Leone¹ 8.1 0.3 4%
Somalia¹ 12.3 2.1 17%
South Sudan² 11.4 7 61%
Sudan¹
(excluding West Darfur)
41.9 5.9 14%
Syrian Arab Republic 18.3 6.6 36%
Turkey¹
(Syrian refugees)
2.7 0.5 17%
Uganda 40 1.5 4%
Ukraine
(Luhansk and Donetsk oblasts, and IDP)
6.1 0.5 9%
United Republic of Tanzania¹
(16 districts)
4.8 1 20%
Venezuela¹ 28.5 9.3 32%
Yemen² 29.9 15.9 53%
Zambia¹
(86 districts)
9.5 2.3 24%
Zimbabwe¹
(Rural population)
9.4 3.6 38%
Total populations 825.1 million 134.99 million

Source: GRFC 2020, Table 5 – Peak numbers of acutely food-insecure people in countries with food crises, 2019
¹ Include populations classified in Emergency (IPC/CH Phase 4)
² Include populations classified in Emergency (IPC/CH Phase 4) and in Catastrophe (IPC/CH Phase 5)

While starvation is a pressing global issue even at the best of times, the ongoing impact of the COVID-19 pandemic is projected to almost double these numbers by an additional 130 million people—a total of 265 million by the end of 2020.

To put that into perspective, that’s roughly equal to the population of every city and town in the United States combined.

A Continent in Crisis

Food insecurity impacts populations around the world, but Africa faces bigger hurdles than any other continent. The below map provides a deeper dive:

global food crisis 2020 africa

Over half of populations analyzed by the report – 73 million people – are found in Sub-Saharan Africa. Main drivers of acute food insecurity found all over the continent include:

  • Conflict/Insecurity
    Examples: Interstate conflicts, internal violence, regional/global instability, or political crises.
    In many instances, these result in people being displaced as refugees.
  • Weather extremes
    Examples: Droughts and floods
  • Economic shocks
    Macroeconomic examples: Hyperinflation and currency depreciation
    Microeconomic examples: Rising food prices, reduced purchasing power
  • Pests
    Examples: Desert locusts, armyworms
  • Health shocks
    Examples: Disease outbreaks, which can be worsened by poor quality of water, sanitation, or air
  • Displacement
    A major side-effect of conflict, food insecurity, and weather shocks.

One severely impacted country is the Democratic Republic of Congo, where over 15 million people are experiencing acute food insecurity. DRC’s eastern region is experiencing intense armed conflict, and as of March 2020, the country is also at high risk of Ebola re-emergence.

Meanwhile, in Eastern Africa, a new generation of locusts has descended on croplands, wiping out vital food supplies for millions of people. Weather conditions have pushed this growing swarm of trillions of locusts into countries that aren’t normally accustomed to dealing with the pest. Swarms have the potential to grow exponentially in just a few months, so this could continue to cause big problems in the region in 2020.

Insecurity in Middle East and Asia

In the Middle East, 43 million more people are dealing with similar challenges. Yemen is the most food-insecure country in the world, with 15.9 million (53% of its analyzed population) in crisis. It’s also the only area where food insecurity is at a Catastrophe (IPC/CH Phase 5) level, a result of almost three years of civil war.

global food crisis 2020 middle east

Another troubled spot in the Middle East is Afghanistan, where 11.3 million people find themselves in a critical state of acute food insecurity. Over 138,000 refugees returned to the country from Iran and Pakistan between January-March 2020, putting a strain on food resources.

Over half (51%) of the analyzed population of Pakistan also faces acute food insecurity, the highest in all of Asia. These numbers have been worsened by extreme weather conditions such as below-average monsoon rains.

An Incomplete Analysis

As COVID-19 deteriorates economic conditions, it could also result in funding cuts to major humanitarian organizations. Upwards of 300,000 people could die every day if this happens, according to the World Food Program’s executive director.

The GRFC report also warns that these projections are still inadequate, due to major data gaps and ongoing challenges. 16 countries, such as Iran or the Philippines have not been included in the analysis due to insufficient data available.

More work needs to be done to understand the true severity of global food insecurity, but what is clear is that an ongoing pandemic will not do these regions any favors. By the time the dust settles, the food insecurity problem could be compounded significantly.

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Source: https://www.visualcapitalist.com/countries-reliant-tourism/

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How U.S. Consumers are Spending Differently During COVID-19

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When times get tough, central banks typically act as the first line of defense.

However, modern economies are incredibly complex—and calamities like the 2008 financial crisis have already pushed traditional policy tools to their limits. In response, some central banks have turned to newer, more unconventional strategies such as quantitative easing and negative interest rates to do their work.

In response to the COVID-19 pandemic, central banks are once again taking decisive action. To help us understand what’s being done, today’s infographic uses data from the International Monetary Fund (IMF) to compare the policy responses of 29 systemically important economies.

The Central Bank Toolkit

To begin, here are brief descriptions of each policy, which the IMF sorts into four categories:

1. Monetary Policies

Policies designed to control the money supply and promote stable economic growth.

Policy Name Intended Effect
Policy rate cuts Stimulates economic activity by decreasing the cost of borrowing
Central bank liquidity support Provides distressed markets with additional liquidity, often in the form of loans
Central bank swap lines Agreements between the U.S. Fed and foreign central banks to enhance the provision of U.S. dollar liquidity
Central bank asset purchase schemes Uses newly-created currency to buy large quantities of financial assets, such as government bonds. This increases the money supply and decreases longer-term rates

2. External Policies

Policies designed to mitigate the effects of external economic shocks.

Policy Name Intended Effect
Foreign currency intervention Stabilizes the national currency by intervening in the foreign exchange market
Capital flow measures Restrictions, such as tariffs and volume limits, on the flow of foreign capital in and out of a country

3. Financial Policies for Banks

Policies designed to support the banking system in times of distress.

Policy Name Intended Effect
Easing of the countercyclical capital buffer A reduction in the amount of liquid assets required to protect banks against cyclical risks
Easing of systemic risk or domestic capital buffer A reduction in the amount of liquid assets required to protect banks against unforeseen risks
Use of capital buffers Allows banks to use their capital buffers to enhance relief measures
Use of liquidity buffers Allows banks to use their liquidity buffers to meet unexpected cash flow needs
Adjustments to loan loss provision requirements The level of provisions required to protect banks against borrower defaults are eased

4. Financial Policies for Borrowers

Policies designed to improve access to capital as well as provide relief for borrowers.

Policy Name Intended Effect
State loans or credit guarantees Ensures businesses of all sizes have adequate access to capital
Restructuring of loan terms or moratorium on payments Provides borrowers with financial assistance by altering terms or deferring payments

Putting Policies Into Practice

Let’s take a closer look at how these policy tools are being applied in the real world, particularly in the context of how central banks are battling the effects of the COVID-19 pandemic.

1. Monetary Policies

So far, many central banks have enacted expansionary monetary policies to boost slowing economies throughout the pandemic.

One widely used tool has been policy rate cuts, or cuts to interest rates. The theory behind rate cuts is relatively straightforward—a central bank places downward pressure on short-term interest rates, decreasing the overall cost of borrowing. This ideally stimulates business investment and consumer spending.

If short-term rates are already near zero, reducing them further may have little to no effect. For this reason, central banks have leaned on asset purchase schemes (quantitative easing) to place downward pressure on longer-term rates. This policy has been a cornerstone of the U.S. Federal Reserve’s (Fed) COVID-19 response, in which newly-created currency is used to buy hundreds of billions of dollars of assets such as government bonds.

When the media says the Fed is “printing money”, this is what they’re actually referring to.

2. External Policies

External policies were less relied upon by the systemically important central banks covered in today’s graphic.

That’s because foreign currency interventions, central bank operations designed to influence exchange rates, are typically used by developing economies only. This is likely due to the higher exchange rate volatility experienced by these types of economies.

For example, as investors flee emerging markets, Brazil has seen its exchange rate (BRL/USD) tumble 30% this year.

In an attempt to prevent further depreciation, the Central Bank of Brazil has used its foreign currency reserves to increase the supply of USD in the open market. These measures include purchases of $8.8B in USD-denominated Brazilian government bonds.

3. Financial Policies for Banks

Central banks are often tasked with regulating the commercial banking industry, meaning they have the authority to ease restrictions during economic crises.

One option is to ease the countercyclical capital buffer. During periods of economic growth (and increased lending), banks must accumulate reserves as a safety net for when the economy eventually contracts. Easing this restriction can allow them to increase their lending capacity.

Banks need to be in a position to continue financing households and corporates experiencing temporary difficulties.

—Andrea Enria, Chair of the ECB Supervisory Board

The European Central Bank (ECB) is a large proponent of these policies. In March, it also allowed its supervised banks to make use of their liquidity buffers—liquid assets held by a bank to protect against unexpected cash flow needs.

4. Financial Policies for Borrowers

Borrowers have also received significant support. In the U.S., government-sponsored mortgage companies Fannie Mae and Freddie Mac have announced several COVID-19 relief measures:

  • Deferred payments for 12 months
  • Late fees waived
  • Suspended foreclosures and evictions for 60 days

The U.S. Fed has also created a number of facilities to support the flow of credit, including:

  • Primary Market Corporate Credit Facility: Purchasing bonds directly from highly-rated corporations to help them sustain their operations.
  • Main Street Lending: Purchasing new or expanded loans from small and mid-sized businesses. Businesses with up to 15,000 employees or up to $5B in annual revenue are eligible.
  • Municipal Liquidity Facility: Purchasing short-term debt directly from state and municipal governments. Counties with at least 500,000 residents and cities with at least 250,000 residents are eligible.

Longer-term Implications

Central bank responses to COVID-19 have been wide-reaching, to say the least. Yet, some of these policies come at the cost of burgeoning debt-levels, and critics are alarmed.

In Europe, the ECB has come under scrutiny for its asset purchases since 2015. A ruling from Germany’s highest court labeled the program illegal, claiming it disadvantages German taxpayers (Germany makes larger contributions to the ECB than other member states). This ruling is not concerned with pandemic-related asset purchases, but it does present implications for future use.

The U.S. Fed, which runs a similar program, has seen its balance sheet swell to nearly $7 trillion since the outbreak. Implications include a growing reliance on the Fed to fund government programs, and the high difficulty associated with safely reducing these holdings.

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Source: https://www.visualcapitalist.com/how-u-s-consumers-are-spending-differently-during-covid-19/

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