A Journey of Resilience and Innovation
When their startup’s investors pulled out just before Christmas eight years ago, Luke Magnan and Mike Jones found themselves at a crossroads. With no external funding to rely on, the two insurance industry veterans made a bold decision to take a different approach. “We had to figure out what we were going to do, and we decided we’re going to try to do this a different way,” Magnan said. “Let’s see what we can do without any money, if we can sort of bootstrap this and make it happen.”
With decades of experience in the insurance sector, the pair launched their insurtech software firm in Hartford, naming it Combined Ratio Solutions after a key financial metric used to assess an insurer's profitability. Starting with a small team funded entirely by their own resources, they focused on creating a product that could address the pain points of the industry.
Over the past eight years, the company has grown significantly. The original core group of five has expanded to 200 employees, with about 30 working from the company’s headquarters at 190 Trumbull St. in downtown Hartford. Combined Ratio Solutions now offers updated software that helps property and casualty insurance companies manage their day-to-day operations, covering assets like homes and cars.
Challenging the Status Quo
Magnan believes that traditional software companies have not always aligned with what customers truly need. “There was a better way to go about it,” he said. The company’s website reflects this philosophy, using bright colors, bold fonts, and oversized all-caps headers to urge insurers to “join the revolution” against the clunky and overpriced software that dominates the industry. The team is described as “our rebels,” highlighting their commitment to innovation.
The company’s latest product is free, open-source software designed for policy administration, allowing insurance companies to assess risk information and determine coverage levels and pricing. “We’ve built a whole practice around implementing it and configuring it to really work for clients,” Magnan explained. “We're very excited. We think this is something that really is going to change the industry, and we’re aggressively growing around it.”
Choosing Hartford as a Home
Magnan, a native of Vernon, convinced his co-founder to locate the company in Hartford due to its concentration of insurance industry talent and expertise. Despite challenges with rising office vacancies in recent years, the city has proven to be a supportive environment for growth. “The local business owners on the hospitality side have certainly been an important part to our story,” Magnan said. The company aims to double its Hartford-based workforce in the next year and encourages new hires to live in the city.
“Bringing younger people from other geographies to live in Hartford has had pros and cons,” Magnan noted. “I think living in downtown Hartford now is better than it’s been in the past, and certainly a much different experience than people who maybe lived in other places. We have to appreciate that it will not be for everybody.”
Building a Community Around Insurtech
To reach the next level, Combined Ratio Solutions needs more support in connecting with large companies that once gave Hartford its title as the “Insurance Capital of the World,” Magnan said. “More companies could be doing what we’re doing, and we’d be happy to talk about that and building more of a community around insurance technology in the city.”
Susan Winkler, executive director of the MetroHartford Alliance’s insurance and financial services division, sees companies like Combined Ratio Solutions as a beacon of hope for the insurance sector in Hartford. While industry giants like Aetna have reduced their local workforces, efforts to build an ecosystem around insurance technology are gaining momentum. This includes organizations like InsurTech Hartford, which promotes networking and hosts events such as Hartford Innovation Week.
Stacey Brown, founder of InsurTech Hartford, noted that breaking into the insurtech industry is challenging due to the dominance of large, self-contained companies. “Combined Ratio is a bright spot,” Brown said. “Their target customers are not necessarily the big logos we see around town. They tend to go after the smaller, agile and more innovative companies in the industry.”
A Model for Future Entrepreneurs
Magnan hopes that Combined Ratio Solutions’ success story will inspire other entrepreneurs. “We own the company outright, and we’ve really been able to make our own decisions and grow the company,” he said. “While we’re in a high-tech industry, it is a very old-fashioned model, and it’s something that I think that everybody should seriously consider and take a look at.”
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