What is an InsurTech? You may have heard it or a similar phrase, FinTech, used in newspapers or on TV to describe companies, usually, new businesses who are doing something different and infusing tech into an already established industry. In the case of InsurTech’s, the word is very simply a way of referring to new technology companies who specialise in the insurance industry.
Now while the insurance industry has reputation for being a bit outdated, obviously every insurance company these days operate within the technological world on one level or another, so what separates these InsurTechs from your usual insurance company? Why is this type of company so highly praised? Why will other companies put up, on paper at least, crazy sums of money to purchase them?
Are they just a fad, a bubble about to burst, or something more long term?
As CEO at Tempcover, this is something I’ve pondered and discussed with colleagues and clients. The consensus seems to be that to be an InsurTech, and benefit from the perceptions and attention they attract, several exclusive criteria need to be met:
- You must work in the insurance sector (obviously!)
- Technology must be at its core i.e. the business couldn’t exist without it
- It must be scalable – this is to say the solution it offers, with the proper backing, must have the ability to substantially increase in size, ideally across multiple geographies
- The product or service being offered must be made considerably simpler, cheaper, more reliable – just better – by the technology in question, over the existing market solutions
- They must be user-centric, i.e. they function to make the lives of their end-users that much easier
If we define an InsurTech by the above measures, is Tempcover an InsurTech? Let’s double-check –
You won’t be surprised to hear we work in the insurance sector! ✔️
Our whole operation is based on technology, 50%+ of our team are web developers and testers and 100% of our business is transacted online. ✔️
Following our private equity-backed management buyout 18 months ago we have enjoyed rapid growth of our core business, have expanded into new products and markets, are working on moving into different geographies and we have barely scratched the surface of the available market. ✔️
We are part of a group of companies (arguably the first) to be revolutionizing how insurance is bought and consumed and doing so by focusing on simplifying the process of purchasing insurance through the use of technology.✔️
We place the customer at the heart of what we do. Our entire site, the quote process, back-office and customer support have all been designed (and regularly refreshed) with the end-user front of mind. This is evidenced by extremely high customer retention and a 5-star average review score (from 15,000 + reviews) on Trustpilot. Our customers love us because we love them.✔️
It’s a clean sweep, Tempcover is by very definition an InsurTech, right? Well, there are some key traits normally associated with the InsureTech markets, both of which tend to be far less discussed.
As mentioned before, InsurTech’s are virtually always ‘new’ companies, generally, those which have been in existence for 5 years or less and that have ‘enjoyed’ rapid growth over that time.
InsurTech’s, in most instances, tend to be loss-making or have very large amounts of debt following investment.
I’m delighted to say this is where Tempcover begins to divert from the recognised InsurTech path. I started the company back in 2005, meaning we are now moving in to our 15th year of trading. We have certainly been through some difficult periods over those years, however, our longevity really shows the strength our proposition, the need we fulfil for our customers, and I like to think the proactive and sensible way in which I and the management team run the company.
The reason we are still healthy, still growing, and still hugely excited about the future is that we have managed to make it through those 15 years with carefully managed growth at all times.
We have always made money, have just completed our most successful year, expect to double in size over the next year and continue to maintain extremely strong relationships with all our insurer and supplier partners – because we also make them money.
A key to our business is the relentless need for everyone to win, the customer, the supplier, the insurer and the team. When we do this, the bottom-line profit looks after itself.
These are not the hallmarks of a typical InsurTech, so is Tempcover actually still an InsurTech? I’m not so sure. What I am certain of is that if the majority of recognised InsurTech businesses took a leaf out of our book, they would enjoy much greater success, for a much greater period.
With sustained growth, Tempcover may have avoided some of the usual pitfalls that many InsurTech’s face, but as potentially one of the original InsurTech’s, we’re still driven to be a customer focussed, growing, profitable business who focus all their efforts on ensuring technology is developed and harnessed to improve every aspect of our customer experience!
Whatever that makes us, that’ll do us just fine.