Bitesize InsurTech: Uvamo

April 19, 2016 Charlie Burgess

You might remember Lemonade‘s cheeky claim to be “the only insurer that doesn’t make money by denying claims“? Or their claim to be the “world’s first P2P insurance carrier.” Friendsurance and various others might have an issue with this.

One of those others is Uvamo, although they too are currently “coming soon”.

Uvamo, founded by some Lending Club alumni, is trying an interesting take on the P2P model.  The startup plans to sell policies online; premiums collected will be pooled by Uvamo.  When claims occur, that pool will, in the first instance, pay claims.  However – and here you can see the Lending Club influence – that pool will be backed by retail investors, who provide additional capital.  Those investors get called on when claims exceed premiums.

The thinking here is interesting: it’s looking at insurance from the opposite end to most, i.e. how retail investors can get risk capital to work, without having to invest in the broader infrastructure of an established insurer.  The challenge we, think, will be in early years when one even small claim can wipe out the pool and hit investors without too much trouble.