Bitesize InsurTech: so-sure
October 29, 2016 Chris Sandilands
so-sure is a social insurance MGA that launched last week; its model allows policyholders to get up to 80% of their premium back at the end of the year.
So what’s going on here?
so-sure currently offers mobile phone insurance. It costs £102 to insure an iPhone 7 128GB for a year with so-sure – sort of. If you persuade a friend to buy a policy with so-sure within 60 days and you connect that friend to your policy, so-sure adds £10 to your “reward pot”, which can grow to 80% of your own premium.
If nobody claims, then the reward pot is yours at the end of the year – so in the above example, you’ll get up to £82 back in cash. That means you’ll have paid just £20 to insure your phone. That’s pretty cheap compared with, say, EE who charge £144.
There’s a more detailed description of how it works in this FT article.
But so-sure’s founder and CEO, Dylan Bourguignon, is adamant that the business is as much about service as it is price and has invested in the claims experience. FNOL is 24/7 to a human being and the company aims to put a new phone in the hands of claimants the next working day. Dylan points to this (very short and interesting) FCA report when he comments that it is not hard to be considerably better than the market with a mobile phone product. The ambition to deliver a better all-round proposition was a big factor in choosing to go the MGA rather than broker route.
Things of note
First, so-sure’s capacity is provided by Salva Kindlustus (a lesser known Estonian insurer) and Munich Re’s Digital Partners division (which Oxbow Partners has helped build). We understand that these two companies were chosen in favour of more obvious candidates on account of their superior appetite for innovation and digital capabilities.
Second, this is one of several companies piloting group-based insurance propositions, sometimes labelled as “p2p insurance” (see our blog on p2p). In so-sure’s case, the group element is to incentivise policyholders to invite others to connect to them. We understand that from Dylan that their “virality coefficient” is “very high”, suggesting that the concept has early traction.
so-sure is one of a generation of new MGAs whose proposition is built around a better customer experience which goes beyond just a better sales interface (like Neos, who we covered last week). If MGAs like so-sure get their proposition and economics right, it could start to put real pressure (both commercial and regulatory) on traditional insurers’ propositions. Traditional players will find it hard to respond given their technology deficit – creating a race to acquire or partner with many of these start-up MGAs.
We’re interested to see how this race to build more customer-centric propositions pans out.