The insurtech firm Open Insurance has just raised $31 million from international investors bringing its total capital investment up to $53 million.
Open’s successful revenue raising reflects some expert predictions for the global insurtech market. According to a report published this month by AllTheResearch, the market was valued US$5.5 billion in 2020 and is expected to reach more than US$11 billion by 2027.
Open’s stakeholders no doubt see their accumulation of money as a big step towards satisfying the company’s mission statement.
Open’s website ambitiously declares: “Our mission is to provide the fastest insurance, at the best price, for the world.”
The world? That’s a bold statement with a tone reminiscent of the opening narration of a Star Trek episode. However, founder and CEO Jonathan Buck was very sincere when he explained what the mission statement means.
He said the three ideas were carefully chosen.
“No customer in the world wants to spend any more time than they need to on buying insurance and managing their insurance,” he said.
Buck said providing the ‘fastest insurance’ for customers is about making buying it quick, easy to understand and automated.
“We’re continually looking at ways of making the process and the provision of insurance more efficient so we can pass those prices on to customers,” he said.
Buck said ‘price’ is also about making their product as flexible as possible so customers can better choose what they want to pay for.
The ‘world’ part of the mission is something of a pincer movement.
“We always wanted to build a multinational company,” said Buck.
The company has grown up in Australia and is about to enter the New Zealand market. By early 2022 Buck expects Open to also have a presence in the United Kingdom.
He also said Open wants to be a force for good. The company is a Certified B Corporation, a growing group of ethically minded businesses, including ice-cream maker Ben & Jerry’s and clothing company Patagonia.
“We want to leave a positive impact on all stakeholders. So that’s our employees, our community, our environment and our customers - and we measure that impact,” said Buck.
But what sort of company is Open?
“We do almost everything that an insurance company does. I think we would also describe ourselves as an insurtech,” said Buck.
Insurtech often means technology that can improve the operations of insurance firms. However, it also refers to new insurance companies that are extremely technology savvy and good at using data – like Open. Buck said there are also different types of insurtech companies. Some just sell technology to insurers.
“There are some insurtechs that take a very small slither of the insurance life cycle and use data and technology to improve or inform or enhance that for insurers,” he said.
Others, like Open, are basically insurance companies but very high-tech.
“We act very much like a full-service insurance company and do everything, so we create products, we price products, we sell the products to a customer, we create the entire customer experience,” he said.
It also manages the policies from quote to claim, collects the premiums, pays the claims, deals with disputes and renews the policies.
“All of the things that most insurance companies do,” said Buck.
However, there’s an important difference between an insurtech like Open and a traditional insurance company. Open doesn’t have an insurance license. It needs to partner with insurance companies.
“So, in Australia we partner with Hollard Insurance Company and they’re the legal underwriters of the products,” Buck explained. “They’re also a shareholder in the business.”
Buck said Open’s flagship product is probably Huddle Insurance that launched in 2016 and offers car and house insurance.
“So we own the brand and we sell direct to consumer at Huddle.com.au,” he said.
Business partners like Telstra also have the Huddle software embedded.
“In addition, our platform supports a number of what you’d probably call white label brands and the best known of those is ahm,” Buck noted.
Ahm is a health insurance provider.
Open manages the Huddle platform from the customer’s first click to the issuing of the policy.
“The policy is issued by us and managed by us. Claims lodged will go through to our teams and our technology will sometimes approve your claim automatically and when it isn’t, our team will help you get your car and home fixed up,” he said.