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| Podcast: How Automated Robots Are Supporting the Surge in E-commerce |
 | The global pandemic has accelerated adoption of e-commerce, in many cases stretching fulfillment capacity to its limits—but a new generation of more affordable commercial robots are emerging to help retailers and manufacturers meet this growing demand. In a recent episode of Exchanges at Goldman Sachs, Goldman Sachs Research’s Heath Terry spoke with Insight Partners’ Deven Parekh, Fetch Robotics’ Melonee Wise, and Nuro.AI’s Dave Ferguson about the future of e-commerce and the role that robotic automation is playing in the adaptation of warehouse and fulfillment networks. “We've been developing some new features in our software to help support the pandemic, like contact tracing, social distancing tools…Now we take over most of the short movements between stations so people don't have to interact with each other,” Wise said. She sees the much-anticipated use case of last-mile delivery as a difficult challenge for robotics, requiring a move into unstructured environments, but it’s one Nuro.AI is looking to solve by focusing on safety outside its autonomous delivery vehicles. “For us, we want to be the safest vehicle out on the roads because we should be able to, right? We don't have people inside. We don't care nearly as much about the eggs that are inside the vehicle as we do about the kids playing in the road. So we want to be more conservative. We want our vehicle to effectively self-sacrifice...and we can solve the entire tech challenge as a whole much, much faster,” Nuro.AI’s Dave Ferguson told Terry.
Listen to the podcast on Apple Podcasts or YouTube. |
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| | The Daily Check-In With Goldman Sachs |
 | As the price of gold hits record highs, the recent surge in silver is also drawing investors’ attention. “Silver is interesting in that it's positioned somewhere between the precious metal investor interest and the real commodity. [It’s] a metal that’s really driven by supply and demand,” said Sarah Kiernan, head of Americas Commodities Sales for Goldman Sachs’ Global Markets Division, in a recent episode of The Daily Check-In with Goldman Sachs. “Fifty percent of the uses of silver are industrial, so you have the economy reopening, you have more need for large-scale projects, you have real bids in the true economy for silver.”
In other episodes of The Daily Check-In, Michael Carr, global co-head of Goldman Sachs’ Mergers & Acquisitions Group in the Investment Banking Division, shared his view on M&A activity as a lens into corporate sentiment and the broader economy. Pamela Codo-Lotti, who helps lead the firm’s activism, shareholder advisory and defense practice, discussed the environment for shareholder activism and how companies are thinking about defensive strategies, while Nicole Irvin highlighted trends driving IPO activity in the tech sector and the outlook for direct listings.
For more Daily Check-In videos, subscribe to our channel on YouTube. |
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| | Talks at GS With Dr. Khalil Gibran Muhammad |
 | | Above (L to R): Daniel Hibbert of Goldman Sachs and Dr. Khalil Gibran Muhammad of Harvard Kennedy School | In his book, The Condemnation of Blackness: Race, Crime and the Making of Modern Urban America, Dr. Khalil Gibran Muhammad explores the underpinnings of structural racism in America since the Reconstruction era following the Civil War. The legacy of that construct endures today, Dr. Muhammad said during a recent episode of Talks at GS. “When people end up in unequal circumstances…mostly people then blame them for making bad choices…So we then read the inequality not as evidence of a structure that produces inequality—by definition, that's what capitalism does—but then we blame those people for not being as successful as the rest of us.”
”I teach at the most elite, wealthiest school in the United States of America,” said Dr. Muhammad, who is a professor at the Harvard Kennedy School. “And while Harvard does pretty good at admitting a certain number of Black students across all categories—both African-American as well as first-generation from other parts of the world—it is not a profoundly equal place. It is a place that produces status, it guarantees you status.” Those dynamics reverberate across society, Dr. Muhammad said. “The private sector is going to have to take a cold, hard look at the way in which it benefits from these inequalities, the way in which it exacerbates status and the ways in which it privileges people who come through certain particular networks...If we want to change our society, if we want to do a little bit less inequality, we're going to have to change the way we do business as well.” |
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| | Briefly…on How Startups Are Disrupting the Insurance Industry |
 | Insurance is typically considered one of the most traditional industries in financial services and, until recently, it's proven fairly resistant to change. But new consumer behaviors, technologies and business models are spelling disruption for the space. We sat down with Goldman Sachs’ Kelly Galanis, head of the Americas Financial Technology sector in the Investment Banking Division, about the emergence of insurance technology startups, known as insurtech, and how they're leading incumbents to adapt.
Kelly, what are some of the ways that the insurance industry has changed in recent years?
Kelly Galanis: The insurance industry is an enormous market with approximately $5 trillion in premiums globally, where even the largest players represent only a few percentage points of the global premiums. While the insurance market has long been stable and steady, companies are embracing new technologies and new data sources—think chatbots, telematics, drones, wearables and social media—that enhance their capabilities to acquire customers and underwrite and administer policies. Second, changing consumer preferences and the rise of the direct-to-consumer model are creating a new class of full-stack insurance startups to provide a more efficient, transparent and mobile-friendly way of selling policies to customers at lower prices and providing customers with a better experience—a trend that is putting more pressure on the incumbents to embrace change.
According to recent survey data from Goldman Sachs Asset Management, about 60% of global insurance companies reportedly invest in or evaluate insurtech startups. How are you seeing that interest playing out with the companies you work with?
Kelly Galanis: Technology is helping the industry find better ways to deliver and price insurance—and insurtech startups are a way for the industry to invest in technology. In fact, in just the last year, the insurtech sector globally has attracted more than $7 billion in funding and investments from venture capital and other institutional investors. The incumbents, for their part, are investing anywhere from approximately $100 million to $300 million into their own corporate VC funds that are dedicated to taking minority investments in insurtech startups with the goal of forging strategic and commercial partnerships. While some traditional insurers are acquiring startups and some are incubating their own direct-to-consumer start-ups, many more are partnering with them. As insurtechs continue to scale, we expect to see more activity in the space.
How do insurtech companies use data in a way that’s different than traditional insurers?
Kelly Galanis: This may be a simplistic way of looking at things but insurtech companies are able to utilize technology in more ways than traditional insurers. Insurtech companies don’t just collect data, they integrate and connect the millions of data points they collect with the acquisition, underwriting and administration of the policies they write. This enables them to focus on increased personalization and greater accuracy and speed of service. Many use artificial intelligence and machine-learning technology to analyze the data they collect and offer deeper insights on an individualized basis. Insurtech companies have developed ways to leverage data from every interaction they have with a customer to improve upon the way traditional carriers typically rely on variables that often categorize consumers into demographic cohorts. As a result, insurtech companies are able to offer better value for their products and services—tailored for a specific individual.
How do these insurtech companies create a different user experience?
Kelly Galanis: Insurtech companies are not burdened by legacy infrastructure and disconnected platforms. This allows them to truly leverage next-gen technology to quickly launch new (and, importantly, regulated) products that address customer needs and preferences. There’s a huge flywheel effect: If you can treat the customer well—for example by helping process claims quickly and transparently—and deliver specific products that they need, then they will stay on the platform. This allows insurers to collect more data, which helps them provide a better experience and create tailored products, and ultimately allows them to grow fast. While insurtech companies are still young, the flywheel that empowers their business model allows them to generate strong customer retention and presumably decades-long customer relationships. Additionally, insurtech companies have mobile-centric or digital-first customer acquisition capabilities (in both personal lines and small- and medium-size business commercial lines). This has a two-pronged benefit: first, it creates a frictionless and even enjoyable customer onboarding experience and, secondly, companies see a material savings because these policies are sold directly instead of through an agent who is paid a commission on each policy sold. Over time, this will create a cost-to-acquire and cost-to serve advantage, allowing insurtech companies to efficiently grow market share.
How do insurtech startups address the capital and regulatory requirements that traditional insurers face?
Kelly Galanis: Insurtech companies typically rely on reinsurance arrangements that allow them to use a third-party balance sheet and remain capital light. Reinsurers that work with these insurtech companies are leading global reinsurers who, like traditional insurance companies, want to participate and invest in this space. And while some have expressed skepticism about an insurtech company’s ability to quickly and accurately underwrite risk, the fact that these companies are continuously improving their unit economics while improving their loss ratios indicates the model is working. |
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| | Goldman Sachs Media Highlights |
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