Disruptive insurtech, Ticker is accelerating change with connected motor insurance that targets niche markets.
Founder and CEO, Richard King is looking to deliver a high growth strategy and hit +US$100mn Gross Written Premium (GWP) by the end of 2022.
As an insurtech, Ticker is taking connected motor insurance to a much wider market, using the latest telematics technology and pricing methods. They are targeting markets from low-mileage drivers to the over 70s and anyone with a driving conviction, who may find it hard to get traditional insurance.
It already looks like Ticker is in the fast lane when it comes to financial backers. England footballer and presenter Gary Lineker and entrepreneur Theo Paphitis, known for his appearances on TV’s Dragons’ Den, are just two famous faces who have become seed investors and brand ambassadors.
“The key to Ticker’s success is winning in niches,” said King, who already has two startups under his belt. “Ticker is a digital-first motor insurtech but, at heart, we’re a data company.
“This year, we plan to launch an electric vehicle product and a proposition for drivers new to the UK, who are often treated as brand-new drivers even with a long driving history.
“We’re not a unicorn today – but I like to think we’re a soonicorn.”
InsurTech magazine sat down with Richard King to find out more about Ticker and how he predicts it will shape the insurtech market in 2022.
What was the inspiration to launch Ticker?
“I’ve been involved in connected motor insurance for more than 10 years. I sold and exited ingenie back in 2015 – it was one of the UK’s first insurers using telematics.
When I had the opportunity to sit back and look at the market with fresh eyes, I realised there was the opportunity to take it to a much wider market, far beyond young drivers. But I knew that, this time, one of the biggest drivers of our success would be in implementing greater levels of pricing sophistication, including Machine Learning (ML) and Artificial Intelligence (AI).”
Please could you give us an overview of Ticker and how you put insurtech to work?
“Ticker is an insurtech bringing connected motor insurance to a much wider market. We’ve created an ecosystem, then we overlay niche propositions. We have two products live today, for novice and van drivers. In just over two years, we’ve managed to get to a US$65mn GWP run-rate with these two products.
“We’ll have two more going live shortly for low-mileage drivers and convicted drivers, who find it hard to get affordable insurance after a ban or motoring conviction.
“This year (2022), we’ll launch an electric vehicle product and a proposition for drivers who are new to the UK (who are often treated as brand-new drivers even when they have a long driving history). There’ll also be a product for older drivers – particularly over-70s who face higher premiums, similar to young drivers. By the end of 2022, we target a GWP of just over US$100m”
You have the support of former England footballer Gary Lineker and Theo Paphitis from Dragons’ Den, how has this helped the brand?
“Gary’s been a friend for many years. We were next-door neighbours, he was my best man, and we’ve invested in many businesses together.
“Theo is also a friend and we live quite near each other. He was aware of my track record, so it was a quick decision for him to become a seed investor.
How important is it to Ticker that insurtechs now have the ability to be in control of pricing?
“Having a third-party underwriter control your pricing would be like building the latest petrol-powered sports car and then filling it with diesel. Ticker is an insurance company, so we have motor policies and a high level of customer service, but lift up the bonnet and we’re really a data company. We need to be in control of the entire ecosystem, especially pricing. More than that: to be best-in-market, we have to have the highest levels of pricing sophistication. As an insurer, if you’re not already implementing ML and AI, or at the least have it on your radar, then the competition is going to accelerate ahead of you.”
Can you tell us more about price optimisation and the use of AI and machine learning?
“Insurtechs like Ticker maximise their competitive advantage and market share through sophisticated pricing techniques and price optimisation – being even more accurate in pricing customers on an individual basis.
“Throw connected car data into the mix and you can employ machine learning tools, which we use to identify patterns in driving behaviour and tell us when someone’s had a crash. In its simplest form, machine learning is looking at data to identify patterns, but on a larger and finer-grained scale than a human can achieve.
“ML can only be introduced when you have vast amounts of data, but the holy grail is AI. ML is just a clever subset of that and can help inform AI. The more data we get, the more complex and sophisticated we can make the algorithms. That said, simpler algorithms can still be very effective when you have this quantity of data and shouldn’t be underestimated.
“Ticker now has what I refer to as ‘tonnes of data’ and that’s how we’re already employing some exciting machine learning models”.
Looking at some of the crazy insurtech valuations and how far they are from making a profit, is there a need for a focus on sustainable profitability?
“I don’t think these valuations are crazy – especially when you look at the track record of VCs making investments; they know what they’re doing.
“The pandemic highlighted the need for insurers to be digital-first and accelerate innovation projects. But more than that, insurtechs are going to revolutionise this industry in the next five to 10 years – it won’t look or feel the same – and ML and AI are the key to this change.”
How much of your time is spent fundraising as opposed to running the business?
“The time between insurtech fundraises seems to be narrowing all the time. Companies are coming back to market for Series A, B or C within 12 months. More than 50% of my time is now in fundraising mode. That’s why it’s essential to have a first-class executive team around you.”
Is it better to specialise or generalise?
“For Ticker, it’s about winning in niches where the average premium is high and there’s plenty of margin to soak up the additional data costs. By building specialised products, we can access the wider market with connected insurance.”
Is Ticker close to an underwriting profit?
“We set ourselves the goal to achieve underwriting profits within the first three years. That’s an aggressive goal for any motor insurtech but we’re on target to achieve it.
If you look at our friends across the pond, some of the big US insurtechs are happy to see loss ratios north of 100% in the early years. I don’t know of many capacity partners in the UK or Europe who would stomach that sort of loss for very long.”
What plans do you have for the next 12-18 months?
“We’re about to start our Series B fundraise, which I hope to conclude by the end of Q1.
Other than that, we’ll be hiring the best talent, building more sophisticated products and extracting valuable insights from the connected car data that flows into our data lake. On the product side, we have two new products due to be launched for low-mileage and convicted drivers, and three more will be launched during 2022. We’re quite busy and focused.”
Could you sum up what gives Ticker the competitive advantage?
“It’s the quality of the team.”
How are you working with Close Brothers?
“We’ve worked with Close Brothers since the start, partnering with them for premium finance for our customers. As many of our policies have a high average premium, there’s quite a high uptake for paying monthly over annually. Close Brothers have been a great partner – they’re one of the most trusted names in the industry.”
How is data collected from the car?
For a connected motor insurtech like Ticker, it all comes down to the quality and richness of data.
Ticker is agnostic to the data collection method, as long as what comes through is granular, accurate and can be used to improve pricing sophistication and customer experience.
Ticker’s products use self-install connected devices, which the customer either plugs into their vehicle or sticks to the windscreen. These send driving data (specific to the product) to Ticker and provide data visualisation for the customer through the Ticker app.
How does Ticker use the connected car data?
Connected car data fuels Ticker’s growth. The more detailed and predictive data, the better the outcome for the customer and for the business.
From a customer experience point of view, the data collected is used to:
- Verify the insurance details provided
- Work out driving behaviour or usage
- Calculate the renewal quote
“Doing this means we can attract the kind of driver that will do well with Ticker. It also helps us reduce fraud (a major issue in the insurance industry), which will ultimately make insurance cheaper for everyone with Ticker.”