We at astorya.vc are delighted to have invested in a German bancassurance startup AAZZUR. In addition to co-investing in the €800k seed round alongside several business angels from the financial sector (e.g. Lutz Raettig, Vice-Chairman of Morgan Stanley Europe), we will support AAZZUR in building an insurance marketplace directly inside banking apps.
1) A huge market opportunity
Bancassurance is dead, long live bancassurance
Historically, bankers have been perfect vendors of bundled mortgage and life insurance products or insured car leasing. Frequent bank visits made them great interfaces to cross-selling of insurance. But, while banks have moved to online channels, insurers have yet to catch up. They still heavily rely on their bricks-and-mortar agents and broker networks.
At astorya.vc we strongly advocate for plugging insurance into online services and platforms. The leverage of huge user pools of Blablacar for car insurance, Quickbooks for invoice insurance or Deliveroo for gig insurance is becoming game-changer for insurance distribution. Since the PSD2 regulation came to life, banks started to move into the same direction, not only opening their APIs, but also wondering about turning their banking apps into platforms and offering 3rd party products and services to their huge pools of customers.
So far, most startups leveraging that regulatory opportunity, have been focusing on banking-related services (e.g. Bankin aggregating accounts, Friendlyscore calculating credit scoring, Tink building infrastructure, etc.). Yet, the insurance business case has been left unexplored.
Forget “on-demand”. It’s time for personalized “just-in-time” insurance.
Transaction data shows if a customer is travelling, eating well, just had a baby or who is she buying her insurance from. This knowledge creates priceless context allowing to finally offer the right insurance product, at the right point in time and through the right channel. It is not “on-demand insurance” anymore, it’s personalized “just-in-time insurance”.
Aazzur addresses this very opportunity — it has developed a middleware enabling insurance distribution in the era of digital banking. It’s spotting life events (the “right time”), to identify personal needs (the “right product”), and embed the subscription into a banking app (the “right channel”).
Bancassurance is a huge and growing market
According to a McKinsey study and the life reinsurer RGA, despite the technological gap, bancassurance is the fastest-growing distribution channel with ~6% yoy growth over the last 6 years and responsible of €724B out of €4.398T (16,5%) world insurance premiums.
These trends explain why insurers pay for long-term exclusivity partnerships with banks. E.g. in 2014 in Poland AXA paid $154m for a 10-year deal with local mBank. Price of the recent AXA global partnership with ING remains unknown.
2) A team, which fits the market
Philipp (CEO), Martin (CFO) and Richard (CTO) have been building technology for financial services together for years. This has resulted in an extensive and trusted network of high-level finance executives, whom astorya.vc followed in this round of financing. Martin’s exit track record (Hypoport IPO in 2007) is certainly a good add-on.
Sharing a common language with decision-makers and tech teams is crucial for business development. It certainly helped to pilot PZU’s travel insurance integration into Alior mobile banking app in Poland. Alior’s policy recommendation based on detection of travel-related purchases e.g. a flight ticket or a hotel night can be replicated for any insurance product, with any partner.
Aazzur founders know how to build high-quality tech products. Today, the product is live and capable of
- Connecting to bank accounts via APIs
- Spotting life events, based on transactional data (e.g. travel, birth, etc.)
- Customizing financial products (e.g. insurance), through a 100% online subscription process.
NB: To see how we define “early-stage”, as: a team that fits its market, with a product live read our post : “What does ‘early-stage’ really mean?”
3) astorya.vc capacity to invest more than money
We like to invest, where we can add value. astorya.vc will support AAZZUR in marketplace development and go-to-market roadmap. We truly trust in our leverage of astorya.vc’s insurance LPs, and an extensive network of tech-savvy corporates to be invaluable here.
If you are a bancassurer looking for top-notch technology, or a bank looking for additional revenues, or an insurer looking for new distribution channels, book a demo directly on Aazzur website >> https://mailchi.mp/aazzur.com/demo or let us introduce you to the team!
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Raised from insurance players, astorya.vc is the first early-stage investor in Europe, focused only on the insurance industry.
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