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Uber (oo-ber) verb: To arrive at a destination via ride-sharing service

App-based transit company draws on varied industries to fine-tune insurance cover

Uber (oo-ber) verb: To arrive at a destination via ride-sharing service

Gus Fuldner first encountered Uber Technologies Inc. as a user of the ride-sharing service.

“I got introduced to Uber ... as a customer in the very first month of its operation,” said Mr. Fuldner, now head of insurance at the San Francisco-based company.

He was vice president of venture capital firm Benchmark Capital Partners in San Francisco then.

“We were investors in the company, and my background had been in payments, banking and financial services,” he said. One thing Benchmark as a venture capital firm did was try to “support our portfolio on various issues, trying to be helpful to companies at their early stages.

“I supported Uber on some payment-related things,” particularly as Uber expanded internationally.

Then came the day when Uber CEO Travis Kalanick called and said, “"Our insurance is becoming more complicated' “ and said he was “looking for some help figuring it out,” said Mr. Fuldner.

“Basically, my response was, "That's a little different than banking. Insurance and banking are not the same thing,” but Mr. Fuldner still listened to the problem “to see if I could be helpful.”

After he addressed that, when the next insurance-related issue arose, the question was, “ "Hey, Gus, can you help us?'”

That ultimately turned into a job offer Mr. Fuldner accepted because of the opportunity it presented.

“I had seen how incredibly fast Uber was growing, how much consumers loved the product, how much drivers loved the product” and how much his own friends used it every day, he said.

“Uber was, at that point, I would say, becoming a verb, where people would say, "I'm going to Uber to dinner,' ... and it's not very often that you get a chance to work at a company that's growing at this pace, that's changing, and is changing an industry like the transportation industry like Uber has,” Mr. Fuldner said.

As an insurance novice, though, Mr. Fuldner had a steep learning curve as he tackled the coverage challenges facing the firm.

“What did it is a combination of things,” said Mr. Fuldner. “One is sort of educating myself, learning the topic, and then, I think, the other part is sort of finding the solutions.”

In finding those solutions, “there's a lot you can draw upon in analogous industries or solutions to analogous problems, and it's a question of figuring out what the right coverage or insurance solution is for the business that we're creating,” he said.

“The concept of someone using their own personal auto, of course, in a business isn't really new. It's more a question of ... how you do it,” he said.

For instance, pizza delivery workers, real estate brokers and newspaper distributors are “all using their personal autos in the hours of a business, and there's different insurance solutions for a pizza franchise or real estate brokerage to deal with insurance in those industries.

“What I think is different about Uber is two things: One is the scale,” Mr. Fuldner said. “We sort of operate at a huge scale, with hundreds of thousands of partner vehicles operating on our platform at a pace of growth that is something the insurance industry in general isn't used to.”

Then, there is “the intersection between the technology and startup world, that is about building things that are new, what's possible,” and starting things “from a clean sheet of paper,” he said.

The insurance industry “tends to value history,” with an actuary looking at the prior loss experience of a particular category of business and trying to predict the costs, said Mr. Fuldner.

However, “we don't always have the luxury of being able to build years and years of history, because if you did wait for that, you could never build new products,” Mr. Fuldner said.

“I spent a lot of time looking to other industries,” said Mr. Fuldner, exploring “how is pizza delivery insured, how do real estate agents get insured, both in the U.S. and elsewhere,” he said.

“There's a lot you can learn just from basic source materials, whether that's reading the California insurance code or reading a policy itself. Fundamentally, the insurance industry sells contracts” and “everything about that product should be specified in that contract,” said Mr. Fuldner.

“As uninteresting as it may sound ... there's a lot you can learn in both reading what a contract says, but also thinking about what it doesn't say, or why it's written that way,” he said. “A standard auto insurance policy today tends to be built up over time from mistakes ... insurers made over decades of different claims scenarios and built into policies. And if I ask why an exclusion exists or why a coverage was written this way, you can learn quite a bit from that.”

Then he said he worked with brokers and attorneys focused on insurance to get “answers to more specific questions where needed.”

In a matter of three years, with no background in insurance, Mr. Fuldner mastered the topic, said Randy Nornes, Chicago-based executive vice president at Aon Risk Solutions, Uber's broker, who met Mr. Fuldner during his venture capital career.

That effort has left Mr. Fuldner with a strong “understanding (of) regulations and understanding the very technical aspects, as well as the strategic aspects” involved, Mr. Nornes said.

He was an “incredibly quick study” in learning about insurance regulation, said John Clarke, senior vice president of marketing at Richmond, Virginia-based James River Insurance Co., Uber's surplus lines insurer. “He has the ability to grab a complicated issue and boil it down to its essence.”

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