Briefing: Seven insurtechs to watch in 2021

2020 was an interesting year for insurtechs. Some might say a tipping point as there were a number of high profile withdrawals such as Buzzvault, Coverly, Lenny and Parasol; while on the flipside some raised significant amounts of money including Bought By Many, Tractable and Zego.

Others such as the self-proclaimed “aggregator for digital insurance” or “shopify for insurance risk capital” Backstop Insurance went from telling its social media followers @Backstop_Insure that it was “coming” in May 2020, to two months later telling them: “We regret to inform you that Backstop will not be proceeding further with product development.” On a more positive note the team [self-confessed ‘insurance nerds’] did add “The overarching marco climate is not conducive for capital supply optimization; Problem-Value fit does exist! We’ll be back soon.”

Researching the insurtech space in 2021 for what has become an annual blog since 2016, I would say that there were less names in play to be featured this year, a sign of the difficult circumstances in starting up and/or surviving a pandemic. Although given time to reflect, this time next year there might be more fertile pickings as new companies seize opportunities created by the Covid-19 fallout.

This could include Honeycomb Insurance (@Honeycombins) – to name one example - which gives its date of birth as 8 June 2020. It presently advertises itself on Twitter as “commercial business insurtech – for 2020 and beyond. Developing the alternative to outdated package policies. More to follow …” Other than that details are scant, but based on its decision to follow the editor of The Times Scotland, Magnus Llewllin, and interest in Scottish independence, one suspects in might have Celtic roots.

All that said, there do appear to be some bright shoots and so here are seven insurtechs that should be worth keeping track off in 2021 and onwards into the future.

Arma Karma

Salespitch: Protection everywhere, subscription anytime, transforming insurance – for good.

The story so far: This start-up is the brainchild of founders CEO Ben Smyth and chief financial officer Chris Frogner who met at the beginning of the last decade.

As Smyth explains on its website: “It all began in 2010, at the University of Essex. I was a fresh-faced teenager studying international relations and looking to make my mark on the world. Along the way; I met Chris – a half-Norwegian, half-Australian international student, with an American accent and a brain for numbers. We quickly became friends, and many late-night chats were dominated by conversations about how we should work together in years to come and maybe even create a company of our own.”

On leaving University, Smyth joined Willis Towers Watson and continued his insurance journey with Miller, Integro, Beach & Associates and BMS; while Frogner took in stints at Bloomberg and Barclays Wealth Management, before they set out on the Arma Karma journey in 2019.

Despite working in insurance, Smyth comments: “One thought always loomed over me: the industry norms, its operations and ambitions were typically unethical and unwilling to change with the times.”

He also notes he never bought contents insurance: “Quite simply, it never worked for me and didn’t fit my needs or lifestyle. I was either in part/fully-furnished accommodation, had flatmates, or didn’t have enough possessions to make the cover worthwhile (I really only cared about my laptop, phone and TV).”

Smyth and Frogner’s solution is an insurance subscription service starting at £3.99 a month, which offers a simple three step process for insureds including telling the insurtech what you want to cover (with a minimum of £100 and maximum of £1500 per item) and which charity you’d like to support (25% of Arma Karma’s ‘cut’ goes to one of four charities).

With its cute armadillo mascot, Arma Karma – an appointed representative of Harrogate-based broker Yourshield – very much wears its green sustainable credentials on its scales, as a member of Ecologi, which helps businesses compensate for their carbon footprint, alongside the more traditional ‘insurance’ organisations – Managing General Agents Association and Insurtech UK.

Arma Karma is not the first insurtech to try a subscription service for possessions in an effort to attract younger customers who might have previously never bought insurance – Back Me Up springs to mind. But with the ethical/ecology angle, maybe the timing will help elevate Arma Karma to a higher state of [consumer] consciousness than predecessors who have scurried similar paths.

Eloy

Salespitch: Be better on the road. Eloy gives you all the tools you need to improve your driving experience – don’t leave home without it. 

The story so far: Following the launch of Caura in 2020, which was mentioned in last year’s list, here is another app intended to make motorists’ lives easier which is targeting the insurers as potential partners.

Founder Damian Horton studied mathematics at both undergraduate and postgraduate level, where his thesis focused on traffic flow algorithms, something that comes through with Eloy as users can use the app to plan routes and log potential hazards.

Since graduating Horton has worked for likes of JP Morgan, Prudential Financial and Macquarie Bank.

More recently he helped set up online mortgage brokers Huffle and Co Home in Australia, and has also worked with robo-adviser Clover.

Horton returned to the UK in 2018 to work for wellbeing specialist Neybar and began planning to bring Eloy to market in 2019 with co-founder and managing director Anna Corp (who also worked at Neybar) and chief technology officer Marcus Robbins. According to Linked In Horton and Corp also work for Modas delivering technology solutions to the healthcare, education and retail sectors, more of which shortly.

In his recent Christmas message Horton admitted 2020 was a difficult one for Eloy given its inability to pitch to raise funds from March onwards

“Due to the uncertainty surrounding Covid and the reduced opportunities to get out and woo investors, we decided to look for alternative revenue streams to keep us afloat while we worked on the business,” he wrote.

“We became a Crown Services Supplier, working on government tenders, and offered consultancy services to other businesses including retailers and Ed Techs who were having to quickly shift their focus to digital. All the time we continued to work on Eloy, but the additional cash coming in meant we had a much longer runway.”

Citing Caura’s experience as an example, Horton notes that Eloy shifted its attention to building an iOS app in lockdown given Apple’s stricter controls meant it would be simpler to transition to the Android version later. It rolled out its latest iOS app in November.

The Eloy app presently includes a ‘simple walkthrough guide’ – through what it describes as its ‘big red button’ – so that in the event of an accident drivers can collect the information they need to make an insurance claim.

Next year among the planned additions is an option to request breakdown cover, with recovery partners then using GPS to be able to find a car’s location.

Referring back to Horton’s post-graduate thesis, one of the main objectives of the Eloy app is to reduce traffic and the resultant pollution; and to that end it believes it can achieve that by between 7% and 15%. An area of particular interest to the Eloy team is parking as it believes looking for vacant spaces accounts for 30% of all wasted time and pollution on the road.

All of which feeds into Horton’s suggestion to insurers that “adding a greater array of services [such as those offered by Eloy] would make [insurance] customers stickier”. It also plays into the sweet spot of many insurer’s ambitions to improve their performance when it comes to embracing environmental, social and governance.

Horton admits to having a growing lockdown-fuelled interest in the challenges the motor insurance sector faces due to evolving technology, commenting: “Connected cars will mean that there is significantly more data available. This may mean a complete change into how insurance is assessed, and we think that new services will be created based on this data.”

With the news that Horton and co plan to wind down their ‘bootstrapped revenue lines’ to focus on Eloy full time for the first time, there is every chance they could we well positioned to benefit from the opportunities afforded by this change.

Hiro

Salespitch: Home Insurance for smart people. Protect your home with smart technology. Get great perks and discounts when you do.

The story so far: CEO Krystian Zajac has history in both the insurtech and smart technology space as chief technology officer and co-founder of one of the early movers in both at Neos, which was snapped up by Aviva.

Hiro, which also involves fellow Neos veterans Daniel Knight as CTO and Adam Whistler as head of growth marketing [the trio also have history together at Fibaro UK and Andrew Lucas London dating back to the start of the last decade], is provider agnostic. Instead of supplying specific branded technology, their latest start-up offers customers access to smart technology [video doorbells, smart cameras, security systems, smoke detectors etc…]  from over 30 leading brands at members-only discounts via an in-app ‘smart shop’.

The insurtech then rewards them with a reduction of up to 25% on their home insurance [sold through a monthly subscription naturally] plus discounts to purchase further technology to protect their homes.

Customers can also use technology they already own to unlock discounts on their premiums from the outset. The Hiro app scans the customer’s home network to detect the devices they have installed and automatically apply a discount. 

“Insurance is currently locked in this weird stand-off with customers,” explains Zajac, “where the vast majority of customers don’t trust insurers to pay out, and yet payouts are the number one cost-center for insurers. Hiro is about putting customers and insurers on the same team for the first time - working together to prevent the most common causes of damage, and thereby reducing costs for everyone.”

Hiro is currently asking people to sign up for early access, and is crowd-funding through Seedrs.

If anyone out there is planning to get involved, can you please ask why the holding company for Hiro is called It’s Not 1999 Ltd, and its insurance arm [an AR of Pro MGA Solutions] is called It’s Not 1998 Ltd? #intrigued

Kudo

Salespitch: Making car insurance better by insuring only the UK’s safest drivers. Are you good enough?

The story so far: Being a sucker for retro gaming, the Kudo logo and graphics on its website very much take me back to my childhood whiling away the hours playing the likes of Jet Set Willy and Atic Atac on my ZX Spectrum.

Indeed the gaming theme runs through the start-up managing general agent’s model as it is based on drivers downloading the insurtech’s app and earning ‘Koins’ during a two week ‘Kudo challenge’. Pass with flying colours, and Kudo will offer you a quote so you can – in their words – “join the club”. Which means becoming a Kudonians – who can subsequently use Koins to open chests and prizes.

The carrot and stick model is obviously not new to telematics. Indeed one provider named themselves after it. But like with Hiro often these things are about timing, and the Covid-19 pandemic has certainly made people think more about the cost of motor insurance and whether the traditional model is for them.

Add in some of Kudo’s promises, such as: ‘keeping your excess if you tell us about a claim straight away - fault or not’. And ‘no one’s perfect all the time - we don’t penalise our customers for the odd slip-up.” Who knows? The country might soon have its fair share of Kudonians on the roads.

Previously known as You Toggle, Kudo has some good pedigree behind it in the shape of co-founder Craig Hollingworth and director Andrew Yeoman, who are CEO and business development officer respectively of marine data analytics specialist Concirrus that last year koined [sic] it by pulling in over $20m including a Series B raise.

The business is chaired by industry veteran Peter Graham who has experience of being at the coalface of motor disruption having worked with Sir Peter Wood at Direct Line and Esure, where he was CEO. He has also acted as CEO of e-Towergate and managing director of Legal & General’s general insurance business.

According to Linked In the team is supplemented by chief product officer Tim Graham (keeping it in the family), CTO Angus Gow and cloud infrastructure consultant Mark Suleman, with the website noting that it is “incoming in Spring 2021” - having completed Beta testing - with backing from a “top-rated insurer”.

With significant intellectual firepower on board, it would not be a surprise if Kudo did manage to defeat the ‘ghoul of bad insurance’ as suggested on its site.

As to the big question as to whether England ever win the football World Cup again? Kudo is rather more circumspect, responding as part of its own frequently asked questions: “We’re no prophets, but it certainly seems safe to say one thing - maybe.”

Ourly

Salespitch: Simple, flexible and affordable indemnity insurance for the healthcare community.

The story so far: Ourly is a family affair with two cousins coming together - in Malvern Link-based Steven Darrah, CEO, and Durham-based Mark Heaver, CTO – to create the start-up.

Darrah is the founding member with the insurance pedigree having worked for Marsh, Thistle and as a commercial manager at Worcester-based SJL before setting up broker European Technology Risks as part of the next chapter in his career.

Heaver has had a number of IT roles throughout the North-East, most recently as a senior consultant at Waterstones before joining ETR AR Ourly full time last year.

On its website, Ourly notes: “Insurance is an industry stuck in the past. Many technology companies have tried to disrupt the sector, most have failed. That helped us look at things slightly differently.

“We have an existing insurance business, so let’s change the way we deliver that product to our customers”.

Ourly adds that it is currently developing “new and exciting insurance products for healthcare, medical technology, property and law”. Sectors, it comments, that have traditionally had to buy insurance with long-winded paperwork, complicated phone calls with ‘experts’ and often weeks of frustration. 

Ourly’s first two launches are in the healthcare space with indemnity insurance for doctors and nurses beginning at £45 and £25 a month respectively.

Peppy Health

Salespitch: Expert support for your employees in the moments that matter specialist healthcare and wellbeing support delivered by expert practitioners. On your smartphone.

The story so far: Another notable recent trend among the insurtech community – see also the likes of Equipsme and Collective Benefits – is the growth in start-ups focused on wellbeing in the broadest sense.

To that list we can add Peppy Health which describes itself as “a first-of-its-kind employee healthcare benefit that provides expert support during the moments that matter”.

It adds companies that sign up with Peppy give their employees access to specialist support and resources specific to major life transitions, which currently includes menopause, fertility and parenthood, all via the Peppy app. Covid-19 mental health is also catered for.

While there is no insurance component mentioned on the website as of yet [although Aviva is listed as a ‘trusted’ partner], Peppy Health are members of Insurtech UK, so they must see value of being part of the wider insurance eco-system.

Indeed to quote CEO Mridula Pore: “We have *BIG* plans to move into other under-served areas of healthcare. Contact me to find out more”.

The founding management team of Peppy Health is Pore, Evan Harris and Max Landry. Pore and Landry’s paths having crossed previously at health tech Huma (then Medopad) in 2017/18.

Before then Pore had been head of retail UK at Norvartis division Sandoz for four years.

In June last year Peppy closed a £1.7m investment round led by Outward VC, with the support of Seedcamp, Hambro Perks, Form Ventures and angel investors

Kevin Chong from Outward VC joined Peppy as a director following the cash injection, with his employer explaining the reason behind its investment as such: “We were introduced to Peppy by a mutual contact in February. It was after we decided to invest (it was a quick decision!) that Covid-19 unimaginably disrupted the world. Now, three months into lockdown, it is even clearer that our health is our biggest priority and how we access health support needs urgent and permanent transformation.”

Yokahu

Salespitch: We protect the island communities, insuring the previously uninsurable, paying out within 24 hours of natural disasters.

The story so far: This insurtech derives its name from the masculine spirit of fertility in Taíno mythology, pertaining to the indigenous people of the Caribbean.

The business was founded by Tim McCosh who on Linked In declares himself as an “insurance specialist with a passion for using technology to deliver innovative products with unrivalled user experience”.

He began his career as an intern at JLT Re and THB in 2011, forging an almost three year career at the later before moving to Meridian Risk Solutions (2013 – 2019).

At Meridian, McCosh ended up leading the evaluation of new distribution models and technology trends and represented the business at insurtech conferences, so it was perhaps no surprise he decided to try his hand at his own digital venture, hence the birth of Yokahu.

He has been aided in the development by the Cayman Islands-based Nick Brierly, the former CFO local insurance company Saxon, who is listed as an investor and director in the business.

Yokahu is presently asking potential customers to sign up to become an early adopter and register to trial its Beta version currently in the works.

Based on the information available it appears to be parametric-based solution, as Yokahu is aiming to constantly monitor sustained wind speeds and pay out pre-agreed limits within hours of a hurricane or natural disaster occluding.

Given Brierly notes on Linked In that he was previously a self-employed professional poker player who was “ranked number one player on the internet for the type of game I specialised in,” you’d think their odds for success might be decent enough.