FORTY under 40:Cameron MacArthur

Cameron MacArthur, Chief executive, AI Insurance

Cameron MacArthur is the chief executive of AI Insurance, which makes a modern software platform for running small insurance programmes, captives and risk retention groups (RRGs). He started his career doing research in computer science and human computer interaction at Northwestern.

He then worked in Boston at IBM as a cognitive software engineer before he founded AI Insurance in 2018.

How did you become involved in captive insurance?

I was working at IBM in Boston as a cognitive software engineer. Fun fact about Boston: it has the highest concentration of hospitals per square foot on the planet. Because of that, there’s a lot of doctors, and therefore medical malpractice (medmal) insurers. A friend worked at a medical malpractice insurer, and I had exposure to just how far behind these companies were from a technical perspective.

They were spending a phenomenal amount of money trying to predict claims costs and better set reserves, and weren’t having success. I wrote a machine learning algorithm to predict the cost of a claim and started the company selling that to small medmal insurers, all of which happened to be RRGs. All our first customers being RRGs helped me see how the problems in the captive insurance space could be solved by simple modern software, and we’ve been hooked on captives ever since.

What are the biggest challenges of working in this industry, and what do you find most rewarding?

The biggest challenge is definitely the aversion to change. A lot of processes have been done in exactly the same way for a very long time, and often good AI advancements are bottlenecked by changing those processes. Some folks are comfortable doing that and some aren’t.

The most rewarding thing is seeing how much time is saved on uninteresting work such as data entry when people automate away those processes. It’s rewarding getting to see friends and people you care about spend less time on data entry and more on the work that they love doing.

Would you recommend the captive insurance industry to young people as a future career path?

There is so much meat on the bone and opportunity for growth. Lots of the opportunity is in starting new businesses, but there’s also tremendous opportunity in working for these businesses in the captives industry and pioneering the change. Anyone young who can have success in captives will see the trajectory of their career advance more quickly than their peers because of the relative impact they can have on their organisations.

“I’m especially excited to see automation come on the regulatory side.”

What developments do you see ahead for captives?

I’m excited to see the barriers to entry continue to reduce. It used to be that your premium costs needed to be multiple millions before a captive made sense. Those have dropped and I think will continue to drop, making captives more accessible to more companies.

I’m especially excited to see automation come on the regulatory side. Anyone can get a C corporation spun up in Delaware in 30 minutes for $100. I don’t expect a captive insurance company will ever be that easy to set up, but I’m thrilled to see regulatory bodies continue to move towards that goal instead of away from it.

Do you think your long-term future remains in the captives market?

Of course! More captives are formed every year than the year before. It’s the fastest-growing and most interesting market in insurance, which means it’s where we want to be.

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