Five years ago this month I gathered with my co-founder John Hering and our early team to launch a new company into the world. It was as clear then as it is now that digital risks are pervasive, that many (if not most) organizations are vulnerable and unprepared, and that a new approach was needed to help organizations stay resilient to increasingly devastating technology failures. Case in point: our 2022 Cyber Claims Report published earlier today revealed that in the latter half of 2021, the average ransom demand made to Coalition policyholders increased over 20% to $1.8 million. 

Helping our communities from the start

In 2017 when we initially set out to solve cyber risk, most organizations were facing an accelerating mess of digital risks, and struggling to protect themselves. Technology wasn’t just failing to solve their problems—often technology was the problem. As is still the case today, small and medium businesses and non-profit organizations in our communities bear the brunt of this risk. These are our family physicians, our local retailers, our favorite restaurants and our places of worship—all facing digital threats without the knowledge, tools, or help they need to navigate the digital world. 

We founded Coalition precisely because these organizations shouldn’t have to combat digital risk alone. Coalition strives to create a safer digital economy where all organizations can thrive, and even our name reflects that ideal. We are building a coalition of organizations that are safer together than they are apart. Today, Coalition provides tools and services that actually prevent and mitigate loss, along with expert response and comprehensive insurance coverage when all else fails. Our approach eclipses the traditional insurance model. 

Traditional insurance wasn’t built for a digital world 

For the last five years, we’ve scaled our business and our capabilities to help more organizations protect themselves from digital risk. All the while, we’ve watched traditional insurance struggle to keep pace with the world. The insurance industry remains tied to a model that looks into the past to try to predict what might happen in the future. Sadly, it is unable to incorporate new, and rapidly changing information, which needs to be considered to address a new class of risks with entirely new characteristics. Protection in this digital world requires a data and insight rich partner to help organizations spot and respond to potential issues faster, and address their risk holistically—often before it strikes.

World: Meet "Active Insurance"

Coalition’s (not so) secret master plan has always been to create a comprehensive insurance product that protects organizations from rapidly emerging cyber and technological risks. The funds from our insurance product would enable us to invest in an all-out security platform with free tools, technology, and intelligence to protect all of our policyholders. The data our platform generated—combined with publicly available insights and our proprietary incident response and claims data—allowed us to build even better insurance products, and more effective tools, technology, and intelligence. We call this new model of data-powered protection Active Insurance. 

The new Active Insurance model goes far beyond traditional insurance by providing technology and expert support before, during, and after an incident occurs. Active insurance relies on three simple but critical pillars: 

• Active Risk Assessment: Powerful data and AI provides a near real-time snapshot of an organization's digital risks, thereby helping organizations access more accurate and economical coverage, making it far easier to purchase coverage, and identifying potential issues from the start—an insight that most organizations could never get from their insurer.

• Active Protection: Continuous scanning and monitoring of digital assets and other risk factors associated with cyber and executive risks, including personalized alerts for critical issues so brokers and policyholders are made aware when risks change.

• Active Response: Support and guidance from an in-house team of experts who can respond to incidents as they occur to address threats, reduce exposure, and get companies back up and running quickly when incidents strike.  

Today, Coalition offers Active Cyber Insurance as well as Active Executive Risk coverage. 

Data makes the difference

Active Insurance is only possible because the digital world creates enough real-time data that can signal new risks, trends, and warning signs. Separating these signals from noise requires skills and technology that was previously only available to large technology companies with deep pockets. That is where Coalition’s unique capabilities come in. We’ve built an insurance company that is, natively, a technology company. Over the last five years we’ve assembled a large and growing team of software engineers, data scientists, and security experts to build our Active Risk Platform. This platform was purpose built to continuously gather and analyze risk data at massive scale, including:

• Digital risk data: Public web scanning, tech stack enumeration, in-depth threat intelligence 

• Organizational risk data: Financial health, litigation, M&A, HR compliance, and other firmographic data

• Incident and claims data: Proprietary collection of risk and claims data

We apply our own expert analysis using artificial intelligence, data science, and machine learning to develop insights and identify emerging threats. This enables us to train our models to make faster, better decisions that optimize brokers’ quoting and binding process, and actively protect policyholders by helping them respond to potential threats before they strike.

Active Insurance today

Active Insurance works. Today we serve and protect over 160,000 customers from digital risks. While our 2022 Cyber Claims Report details the continued rise in digital threats to small and medium-sized organizations, we also found that Coalition policyholders reported 70% fewer claims than the industry average. 

On the back of this success, we’ve launched new free digital risk management tools like Coalition Control, took on new investments to accelerate our growth, and are collaborating with policymakers and the White House to help our nation build a more sustainable model for cyber protection.

This is still the beginning

We believe that today is still very much the beginning for Active Insurance. While Coalition offers Active Cyber and Active Executive Risk insurance today, there are so many other opportunities to bring data and technology together with risk mitigation tools and insurance to create a safer world for us all. 

And finally, I’d be remiss if I didn’t thank our own coalition of broker partners, (re)insurers, investors, friends, and family who have been a part of the journey these last five years. We’re finally 1% of the way there.

Joshua Motta, Founder and CEO, Coalition