Layoffs at Corvus

Specialty commercial insurance MGA Corvus Insurance conducted a round of layoffs yesterday, impacting around 14% of the company. Some of the roles impacted include software developers, talent acquisition partners, product and operations managers.

Corvus was founded in 2017 and it had all of its ducks in a row at the time. Founder Philip Edmundson was on a mission to create a “safer, more productive world through technology-enabled commercial insurance.” To do so, it developed a platform named “CrowBar” to centralize underwriting intel and minimize back-and-forth and time-to-quote. It also claimed that it’s capable of taking large sets of data from multiple sources and turning it into tools for risk management. Some of these risk management tools included sensors to improve loss prevention and reduce pricing.

Corvus was well received by investors, as it raised $160 million from a total of ten investors, including Hudson Structured Capital Management, Aquiline Technology Growth, and FinTLV Ventures. Carriers, like investors, embraced Corvus. Travelers supports Corvus’ cyber products in Europe. Skyward Specialty, which recently went public, collaborated with Corvus to back its Smart Cargo + Cyber solution (a data-driven Ocean Cargo policy with a cyber liability endorsement). Note that Corvus later sold its Smart Cargo Insurance business to RB Jones that took over access to Skyward Specialty for the purpose of underwriting this business. Corvus’ monoline cyber product is underwritten by Hudson Insurance Group.

In addition to product expansion, Corvus was expanding geographically. It bought Tarian Underwriting, a cyber underwriting platform based in London, last year.

In October 2022, Corvus named Madhu Tadikonda as its new CEO, taking over from Phil Edmundson who now assumes the role of Executive Chair and Chair of the Board of Corvus.

“Since the beginning of 2023, things have just tanked at Corvus. I used to love working here, and now there’s several of us who are looking for new jobs and even more who have left the company. Honestly, it makes me sad. A “new horizon” was handed to us by the remaining co-founder of Corvus who lacks experience or empathy. It’s clear that there was zero consideration of employees and culture. There’s no realistic view on whether or not the goals could even be accomplished. As employees, our input used to be solicited, voices heard, and concerns met with a willingness to collaborate. Now it seems that leadership doesn’t even care, has stopped listening, and just nods their head and says the right things at the All Hands meeting to shut us up.” – A Glassdoor review shared on Jan 14, 2023.

“2022 was a strong year for Corvus as we grew our cyber premiums by 80% while maintaining an industry-leading loss ratio below 40%. We are looking forward to another robust year of growth and are fully funded with risk capital to support that growth. Corvus remains hyper-focused on tackling cyber risk with one of the largest specialized cyber underwriting teams in the industry, enabled by state-of-the-art technology and data-driven insights. This year, Corvus will continue to build the underwriting team and platform capabilities while also expanding our European and UK footprint. As the company sharpens focus on cyber risk and its unique underwriting capabilities, we have made strategic reductions to parts of our workforce, which is a net reduction of 14%. This decision was not made lightly and we are deeply appreciative of all the hard work our former colleagues have done, and will support them in their next endeavors.” – Madhu Tadikonda.

Corvus employed approximately 270 employees prior to this wave of layoffs.

Bottom Line: The precursor to the commoditization of specialty insurance. After all, there are just too many competitors and far too few long-term differentiators.