Agile product development and digital transformation tie jointly for first place on the core objectives list of most incumbent insurers and brokers. With insurtechs nipping at the heels of incumbents in regards to digital distribution, comparison and aggregation, it is little wonder that the ‘big insurers’ are being forced to ramp up activity in the on-demand product market. In a bid to find out more about the market for on-demand product creation across the insurance industry, we spoke with Matt Wardle, Co-Founder and CTO at Kasko, a digital insurance platform designed to enable insurers and brokers to launch on-demand insurance products.
FTC: Congratulations on your role manufacturing a new revenue model for slow-to-change insurers and brokers to take note of and use in a cross-selling effort. Can you tell us how the idea came to be and how it works?
My co-founder, Nick, and I wanted to leverage our respective experience in insurance and tech to start a business. We looked at things like airline websites and realised they were great at cross selling travel insurance products, because they had a captive audience with a homogenous risk exposure and the airline had all relevant information on them. It’s offering insurance at the point of demand, but it happens very rarely because insurer IT systems are inflexible and make the exploitation of digital channels challenging. We set about addressing that specific cross selling niche, but later realised that the platform we built actually tackles a much larger problem for insurers. Insurers struggle with creating new products that address new types of risk, they find it difficult to leverage new technology and they struggle with digitalisation. Our platform, which acts as a middle layer between insurers and the digital world, solves all of these problems for insurers.
FTC: Can you tell us what the term ‘insurance-as-a-service’ means to you and why insurers should be excited about development in this area?
To those of you who know Stripe I’d say ‘Insurance as a Service’ is the insurance equivalent of what stripe did for payment. If you, as a website owner, wants to sell insurance, but doesn’t want to learn the ins and outs of the industry or the hassle of regulation ‘Insurance as a Service’ would be a kind of plug and play solution to offer this. There are some InsurTech’s that offer this. KASKO actually offers ‘InsurTech as a Service’. That’s because our customers aren’t consumers or even website owners trying to sell to consumers. Instead we work with Insurers, Brokers and Reinsurers directly, to allow them to create new products, to reach new distribution channels, to test new InsurTech solutions and even to offer ‘Insurance as a Service’ to their clients.
FTC: Can you walk us through the back-end of Kasko and the impact of cloud in particular on the scaling of your technology platform?
KASKO's platform enables agile product development and allows insurers to quickly design, deploy and iterate end-to-end digital customer journeys, within their own or third party channels, in a resource light manner.
We leverages the fact that >90% of any insurance sales process can be broken down into standardised elements such as data collection, pricing, payment, binding, policy admin, customer support and claims. Using Amazon’s AWS infrastructure we built out our platform by connecting a lot of different micro services, into a modular architecture that allows us to create new products in this environment incredibly quickly. With as little as pricing logic and insurance documentation we can have a full plug and play customer journey or an API ready in a couple of weeks. Because of the way it’s built we can utilise our own modules, connect with insurer’s core systems or with third party tech and data feeds if needed. This flexibility is what insurers need to grow and stay future proof. At the same time the AWS infrastructure means there is no limit to the amount of products or policies that can be sold.
FTC: Matt, in your opinion which of the burgeoning insurtech categories (i.e. health, P2P, commercial) will have the biggest impact on the insurance industry in the next few years?
That’s a very hard question to answer. There are a lot of different innovations coming in that will have a big impact on the industry or parts there of. IoT will probably shift focus from insurance to prevent in a lot of cases, AI will open up new opportunities in in terms of distribution, pricing and risk assessment, blockchain and smart-contracts may change our interaction with the insurance industry and be especially impactful in commercial insurance. But actually I think the largest impact will come from outside insurance and InsurTech. Disruption in other industries is totally changing our behaviour, which in turn is totally changing the nature of risk. Driverless cars means humans won’t be the risk factor on the road anymore. The gig-economy puts a larger burden on individuals to protect themselves, the shared economy changes our relationship with the products we use. All this impacts what needs to be insured and how it should be priced. That will be a huge challenge and the biggest impact on insurers, as they try to come up with new products and pricing models in an environment where they don’t have historical data to rely on. Test and learn is the only way to get through that, and I’m not just saying that because this is one of the core things KASKO can help with.
FTC: What is the most impressive insurance start-up you have come across and why?
Other than KASKO? Well companies like Lemonade obviously got a lot of press coverage. Whether they will become profitable and really change the industry long term is still to be seen. What WeFox are doing in Germany an how they are now creating digital insurer ONE, is very interesting. Also Qover, who do offer real ‘insurance as a service’ are fascinating. But ultimately I think today’s primary insurers will still be around and dominating the industry in over the next decades, though there may well be consolidation.
FTC: Back in March, Trov’s Scott Walchek spoke on the firm’s future plans and ambitions and outlined their “three lines of business”. Alongside the app itself, he spoke about offering white-label solutions to financial institutions and even more innovative was a plan to embed Trov technology into other applications provided by merchants and telco operations. Should embedded technology or the outsourcing of proprietary technology become a trend, where would this leave Kasko in the insurance value chain?
I don’t think it’s a question of whether it should. I certainly will. As I said before, I am certain that today’s primary insurers will still dominate the industry in the decades to come, because regulation, capital requirements and other factors mean that there will always be a space for them. However they aren’t tech companies and they need to understand that tech will play a huge part of the insurance value chain. Relying on technology from other companies, who focus on addressing specific aspects of the value chain, is the only way to stay competitive, because no insurer can build tech solutions for the whole thing. With our open, modular, flexible and scalable architecture, we aim to be THE platform that makes this all possible and simple for insurers to do this. So you want to combine SPIXII’s chatbot technology, Digital Fineprint’s data pre-population, some of your own priority tech and Rightindem’s claims systems? KASKO is the backbone that will makes this possible and easy.