Insurtech is a Wrisky business
Why we invested in Wrisk
We’ve recently announced our newest investment, Wrisk, a great insurtech startup we backed this summer, leading a £3.0m super seed round. I’m super excited that we’ve had the opportunity to back the Wrisk founders Niall & Darius as they set about reinventing how consumers buy and engage with insurance, a process that as you’ll see by the rant below I’m not all that fond of today.
Buying insurance is an incredibly painful experience. It is often considered a grudge purchase, and value perception is at an all-time low. Products are inflexible and don’t fit modern lifestyles, pricing is opaque, and the service levels are hopelessly old fashioned. The average application for car insurance has 57 required fields you have to complete! (Formisio report) So much for a good user experience.
When buying insurance, it’s too complicated to read through all of the fine print, comparing what’s actually covered and none of the incumbent brands stand out from the crowd. This has driven consumers towards comparison sites and an attitude that a policy from one brand is pretty much the same as any other. This behaviour is reinforced by special deals for new customers, effectively punishing loyalty and rewarding shopping around every year. The end result — most consumers end up just focusing on the price when they buy insurance, or not buying it at all. In fact, 61% of UK renters don’t have contents insurance (YouGov), and 31% of millennials have never bought travel cover (ABTA).
Yet insurance is something that we all use and it’s important to have the right insurance in place, when I dislocated my shoulder skiing this year I was really glad my travel insurance was all in order! The devil is in the detail as well, US insurance companies don’t provide travel insurance that covers Cuba and several British insurance brands are ultimately re-insured by US providers, so carve out Cuba from their worldwide travel policies, something not obvious at all from the ‘worldwide’ policy name. And actually price isn’t all that matters, you want to be able to trust that your insurer will actually pay-out when something goes wrong and hope that the claims process won’t be too painful.
So there’s a gap between the value that insurance can offer to consumers and what’s actually being delivered. Why should insurance be so painful to buy? Why shouldn’t it be clear exactly how each bit of our data effects the end price? And why shouldn’t it be easier to buy insurance that covers what I really want it to cover, not just another one size fits all policy? And I haven’t even talked about claims…
This is the core of the opportunity to disrupt the huge insurance industry. Just as we’ve seen in financial services, incumbent providers have not proven nimble enough to adapt to the rise of smart phones and deliver top notch experiences to consumers. Just delivering a better mobile experience, being transparent with your users and executing well sets you above the incumbents and that’s before any cool innovation. We’ve made a couple of investments in fintech, with MoneyBox’s app reimaging saving or Curve’s card with its magic features. Insurtech has definitely lagged behind the broader fintech space in terms of new technology and disruption emerging, which is why we’ve been busily hunting for the right team to back for the last year, you may have seen my colleague Nadim’s blogs on insurtech (or as we like to call him — Capitan Insurtech).
So why Wrisk?
Wrisk’s founders, Niall and Darius, are a great team combining a deep background in insurance with cutting edge technology and product skills. The team’s product vision shows some real innovation in giving the consumers true transparency into why their insurance costs what it does and the flexibility that we’ve all come to expect from modern products. Finally, they’re developing great partnerships, both within insurance (MunichRe, Hiscox and QIC) and with consumer brands (BMW and more).
We recently led a £3.0 million super seed round, alongside investments from insurers and some super angels, and Wrisk are now live on Seedrs as they come out of stealth. I’m really looking forward to the next few years and joining Niall, Darius and all the team at Wrisk on their journey to turn buying and consuming insurance into a great experience for consumers.