Before the A, is a show dedicated to telling the stories of fintech founders who’s startups are seeking their “A round” of financing.
Waffle, is a technology company, based in the center of NYC, dedicated to reinventing insurance and improving value for consumers.
Full audio interview:
John Siracusa: (1:13)
In the studio today we have Quentin Coolen. Quentin is a co-founder and CEO of Waffle. Quentin, thanks for being here today.
Quentin Coolen: (01:21)
Hey John. Thanks for having me.
It’s my pleasure. So why don’t we get started with what are you doing at Waffle and why are you doing it now?
Cool. So we are basically insuring you John. You and everything that you love, no matter what happens. We do this through one product it means your car, your home, your life, your electronics, your bed, your travel, even your friends and your family. Nobody else in the world does this. So how do we do it? There were three innovations that are really cool. So the first one is the really boring innovation but consequential one. We are removing exclusions from your coverage. So that basically means that with us you can cancel your plane at any time for any reason.
You pet can get covered through, you know, even the preexisting conditions. If you get really tired of listening to my spiel right now and you take your phone and you crash it against the wall, that is already covered. So that’s consequence innovation #1. Innovation #2, we are helping you to lower your risks before they materialize. So we leveraged that period of between the signup and the claims and that period is often like months if not years where nothing happens. We help you to lower your risk and therefore to lower our payout. Now here is the really sexy thing about us. The way that we underwrite is very different from anybody else. So if you think about the traditional way of underwriting is going to be, you know John the driver or John the homeowner. The problem with those models is that they only account for part of your risk, at Waffle, we have created the first comprehensive risk model. So basically we get more diversified data about you and in the process we understand you better and therefore can price you better. Now we did all of this waffle was one of the research at MIT and that’s how we were able to back test the model and prove that we actually have better underwriting than if you were to take traditional model taken together.
John Siracusa: (3:23)
Do you find that consumers are ready to do their own insurance? Like choose their own policies and choose their own products? Usually we go to an agent and you would say, give me the insurance I need.
Quentin Coolen: (3:35)
Absolutely. So the problem with insurance is is I don’t think I’m understanding when, when I say that people tend not to like insurance, right? It’s a pretty disliked industry. One of the main reasons we found and we thought going into this would be a price game. It turns out that in our view it, it truly isn’t. We think that a really pain point is about the product itself. The notion that that policy that you get that is 40 pages long and it has 39 pages of exclusions. That’s the issue. The issue is when you’re told John, so sorry, but your policy doesn’t cover X,Y,Z, that’s the real problems. How do we address this? By removing the exclusions actually you really, really easy to get people to design whatever they want and you say, I’m John, I have this iPhone on the table and I want it covered no matter what happens up to $500 a year. Boom. Over, you’d done. So designing your own product becomes really easy because there is no, there is no exclusion to remove, there is no qualifier to the payout. It’s basically your decision that gets you to the product.
John Siracusa: (4:39)
So Quentin, you talked about the first holistic risk model. So it seems like you need a lot of data for that.
Quentin Coolen: (4:44)
Oh, massive amount.
John Siracusa: (4:46)
How do you get that data?
Quentin Coolen: (4:47)
We get the customer to give us a some data, right? You answer 10 to 12 questions and then we cross check those answers with public databases that are available, now, 10 to 12 answers and not going to give me a lot about you. So what we do is we create a bit of magic and that’s what the machine learning is all about. And we are able to generate much more variables based on 10 to 12 answers. And that’s how we get to John risk profile.
John Siracusa: (5:12)
So Quentin, this is a very difficult problem to solve obviously. So why are you and your team qualified to solve it?
Quentin Coolen: (5:17)
The three founders of basically a tremendous amount of complementary expertise when it comes to insurance. Michael, is one of the youngest actuaries in the history of the U K he’s a mathematician, a data scientist. Sam is a, is a Fintech guy. He’s been doing M&A investment and M&A fintech deals for the past 10 years. And I’m an attorney and I’ve dealt with the insurance industry for many, many years. So we have those like very complimentary skills and in addition to us, obviously we have phenomenal engineers. We’ve been founders and CTO as themselves. And then we have people work on, on customer acquisition for their entire life at big agencies, but also big digital marketing company. So we have all the, expertise in house, which is what we really wanted and couldn’t be happier with the team.
Listen to the full interview below:
I’m the host of the twice-weekly “Bank On It” podcast. A financial services industry enthusiast and connector. I’m at the center of the fintech ecosystem, keeping current with the ever-innovating industry.