Could InsurTech be the new FinTech? London start-up Digital Risks is proving a thorn in the side for traditional insurance firms, as BQ’s Bryce Wilcock reports…
Name any industry you like and you can guarantee technology has changed the way it works in some capacity over recent years.
The most glaring example is the financial services sector. For the past few years we’ve seen FinTech (financial technology) completely transform one of the world’s most traditional sectors.
Last year however, we saw the emergence of a new buzzword, InsurTech. Yep, you guessed it, technology that is transforming the insurance industry.
One InsurTech start-up in particular which is disrupting the insurance industry is London start-up Digital Risks, a specialist insurance provider which focuses solely on the needs of digital businesses.
Digital Risks prides itself on providing a specialist and digital-first offering to businesses which could potentially find themselves at risk to cyber-attacks or data breaches.
The company provides tailored insurance packages based upon their customer’s needs and has proved a huge hit among digital SMEs since its launch two years ago.
“I became aware of the need for a new type of insurance brand while working for an SME in the technical advertising space,” said Digital Risks CEO and co-founder Cameron Shearer.
“I needed to organise professional and cyber covers that our big brand clients were demanding, but couldn’t find a provider that understood our business, could explain what we needed and advise us on the best options.
“I couldn’t believe how difficult and complicated it was as a small business! I met my co-founder, Ben Rose, who was working for one of the more tech-savvy brokers, and we came up with idea of starting Digital Risks.
“We wanted to make buying insurance easy and accessible for smaller businesses in the tech and media space, with features such as a monthly subscription model to better align to how they operate.
“While we originally met in Australia, we quickly realised the opportunity needed to be first developed in London (the global hub of insurance) so we both relocated in 2014.
“Ben met Annabel Mekelenkamp 12 months later when playing tennis with friends. It turned out she was looking for a new opportunity and she had the corporate financial background and contacts we needed. She joined the management team shortly after.”
Introducing a completely new concept to the insurance industry was always going to be a difficult task but the trio were unfazed by the challenge ahead. They knew such changes had to occur sooner or later and were determined to position themselves at the heart of it.
Cameron added: “Insurance is famously behind the times when it comes to incorporating tech and all things digital into its products and services, hindered by legacy systems that make innovation almost impossible.
“And if you think insurance as a whole is behind the times, then business insurance is even more so, with the commercial sector being seriously slow in addressing the needs and wants of today’s new breed of businesses.
“To avoid being held back by legacy systems, we decided to build our own technology from scratch, allowing us to innovate from the word go, while also preparing for the future. Our end-to-end system means we are in control of everything, from quoting to billing and creating all the documentation, so the customer has a completely seamless experience.
“Coming from a digital advertising background, I knew the importance of having a great customer online experience - it can make or break a business - particularly when you’re targeting sectors as forward thinking as media and tech.”
Having developed the concept for Digital Risks, their next job was getting the business off the ground. Luckily, with Annabel’s experience and contacts and Ben and Cameron’s desire to make Digital Risks a success, it didn’t take long for momentum to gather.
“We were self-funding for 18 months, then closed our first funding round last summer. We are currently going through another round which is due to close in Q1. This has helped enormously, enabling us to hire more resource and invest more in marketing to increase our user-base.
“I also started working with a mentor a few months ago in my capacity as CEO and this support has been invaluable. Having that sounding board there has given me greater confidence in my role, the ability to make big decisions and take the risks necessary for the business to grow.”
It’s been quite a journey for the company over the last two years. The team has since grown with the addition of a marketing manager and account manager and they are planning to double, if not triple their headcount by the end of the year.
And it doesn’t stop there: “Our goal for 2017 is to become a real contender in the UK market. We launched our professional products in August last year and, with more funding on the horizon, we’ll be launching some exciting marketing campaigns this year, as well as joining forces with some new delivery partners.
“In the next five years, we are hoping to expand the business internationally and be established as a serious player in the insurance market.”
Disruption in the business insurance industry has been slow to materialise but with the rise of InsurTech, many are expecting to start seeing some welcome innovation take place soon.
According to CB Insights, global InsurTech investment hit US$1.7bn in 2016, with 42% more deals taking place than in 2015, while the InsurTech community in London’s Tech City now boasts over 1,000 members.
Cameron concluded: “There’s still a long way to go for InsurTech, with opportunities for providing ongoing risk management support to businesses, enhancing the customer experience through mobile, and using data analytics to better understand customers’ risk profiles and prices premiums more fairly.
“Business insurance needs to become real-time and interactive, just like the world we live in and the services we have become accustomed to today. The pace of change in business only looks set to go one way; the insurance industry needs to make sure it's ready."
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