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May 28, 2021 Tom Austen
Ripe is a full-service MGA offering 16 niche insurance products aimed at individuals and small businesses in the UK. It was launched in 1998 as The Golfers Club and rebranded in 2017. It has over 260,000 policyholders and recently announced record results.
We sat down with founder and MD John Woosey and CEO Paul Williams to hear more.
Central to Ripe’s approach is its proprietary core platform, Juice, which it launched in 2019. John and Paul explained that they briefly tried using third-party systems such as a CRM, but they found that the turn-around on bug-fixes and development of new functionality was too slow.
Juice is a platform made up of 54 microservices modules integrated via API. This provides huge benefits with regard to flexibility, for example customer journey optimisation and rapid configuration of new products (such as e-scooter insurance launched this year). Ripe recently won a contract with a large affinity player by rapidly analysing customer data, and then spinning-up products aimed at those cohorts within 3-4 weeks – significantly faster than their competitors.
The in-house technology team comprises around 25 FTE and is roughly a third of the total headcount.
Ripe’s historic focus on technology and data means that it has a rich risk dataset which allows it to conduct profitability analysis. The business is data driven, meaning that it has high confidence in its models such that exceptions to risk acceptance are rarely made. This approach not only protects underwriting profits in the short term but, as Paul explained, also avoids the need for back-book price walking as “good risks tend to stay good risks.”
Ripe’s goal is to be able to collect and process enough data to price risks on an individual basis, ensuring that customers pay only for the actual cost of their individual propensity to claim rather than the experience of a group. The business has a partnership with the University of Salford to build the AI and machine learning models to make this a reality.
The team at Ripe believe offering customers the ability to purchase the products they want through a frictionless online buying platform is central to their success. This is achieved by its focus on configurable policies – ensuring customers get all the cover they do not pay for unnecessary add-ons.
The team pointed to their Personal Trainer insurance product as an example: a week before the first national Covid lockdown, Ripe was able to change the wordings on all their policies to include cover for virtual training sessions at no extra charge to their policyholders. As the first mover, the company was able to grow their market share whilst also generating significant customer goodwill.
Ripe is arguably too established to be considered an InsurTech by most people’s definition but will benefit from the current InsurTech wave. Technology platforms with a proven ability to scale and data and analytical capabilities to underwrite business profitably are highly desirable assets for investors and insurers alike.
The business has built a solid foundation with its current footprint – broadly leisure – and now has the opportunity to develop into new areas. Longer term, it could harness its technology to develop some of the bigger InsurTech and innovation trends like embedded products and connecting wholesale capital more directly to risk.
For some relevant contextual analysis, read our articles discussing public policy issues around pricing granularity (related to our analysis of FCA Pricing Fairness) and why proprietary analysis trumps proprietary data.