UK insurtech Ripe Thinking reveals record growth
One of the UK’s biggest insurtechs, Ripe Thinking, has announced a record period of growth following the company’s technological developments and an alteration in consumer behaviour and demands in 2020.
The disruptive insurtech which was founded in 1998 and boasts a 70-strong team of employees, is an industry leader in terms of innovative technology, specialises in customer analytics, robotics and AI to create insights into risk, underwriting and claims processing.
The Manchester-based company is also embarking on the next phase of its partnership with the University of Salford - working with data scientists on AI and machine learning for the insurance sector.
Ripe Thinking operates in a range of marketplaces, including sports, DJ, music, extreme sports, facilities and teams.
Technology and market delivery in insurtech
According to reports, the company’s unprecedented period of growth was accelerated by Ripe Thinking’s new multimillion-dollar cloud CRM platform, which has been created to outpace the market and is primed for new ultra-targeted product launches in the UK and deployment internationally.
Ripe Thinking profit margins
Data shows that Ripe Thinking has seen its profits rise by 75% over the past 12 months. Its UK customer base also passed the 250,000 mark and reported turnover was up by 25%, from £15m in 2019 to £18.8m, and this was driven by organic growth.
The staycation new normal could also be attributed to generating new business for Ripe Thinking. Last year saw the insurtech’s fastest growing new product to date - Ripe Caravans, which is underwritten by Aviva, and was the first product to launch on the new platform.
Meanwhile, Ripe’s custom-built platform, Juice uses robust microservice and API based technologies - enabling the insurtech to launch products rapidly, either direct or via affinities.
The company also attributes its response speed to customer needs as one of its biggest success drivers. Ripe can adapt products at pace. For example, within 24 hours of the UK's Prime Minister Boris Johnson announcing that gyms would be forced to close on 20 March 2020 due to the pandemic, Ripe led the market by adding free virtual workout cover for fitness instructors via its Insure4Sport product.
Speaking about the latest growth reports, Colin Whitehead, Executive Chairman of Ripe Thinking, explained, "Our mindset has always been to focus on what customers need and respond rapidly to new trends in specialist insurance markets.
“It's our 13th consecutive year of growth and our major tech investment has successfully put us on track for an ambitious next phase for the business. Customers are increasingly responding to our direct, 'build your own policy' model which puts control in their hands. Our growth trajectory is continuing during 2021 despite the ongoing challenges of the pandemic."
Whitehead said speed was an essential part of the success process. "We're a fast moving business - and in an industry where legacy technology and restrictive processes remain inherent, we have upped our pace to become more agile than ever. We are now being approached by other organisations, affinities and brands to partner with them using our tech stack to help them serve their customers with our insurance model.
He added, “Our recent partnership with Aviva to offer cycle insurance to its UK customers is just the first example of new things to come in 2021… We are leading a new breed of insurance in the UK. Consumer needs are changing rapidly and customers want a quick, simple digital purchase journey.”
Insurtechs are winning the race with legacy system companies
Nestled in its own place within the world of financial services, insurance is arguably more unpopular than retail banking.
That’s hardly surprising given that, from a customer service perspective, insurance is something of an off-kilter transaction. You pay a sizable premium in exchange for a service you hope you will never have to use. This image problem is exacerbated by ubiquitous tales of insurers not paying out when it is time to make a claim.
The insurance sector has long been due to an overhaul, and this is where the disruptive force of insurtech comes in - one of fintech’s most upwardly mobile subcategories. Accordingly, last year, insurtech in the UK alone attracted £262m in investment, a growth of 60% on 2019, according to Tech Nation. Insurtech’s momentous growth has been captured in a new report by The AI Journal exploring this burgeoning sector.
What exactly is insurtech?
Put simply, insurtech refers to technological innovations that seek to make insurance cheaper to buy and more efficient to use. In a similar vein to fintech, the large, established institutions have been dipping their toes into insurtech, but it’s the disruptors who are genuinely looking to shake up the status quo, diving into and exploiting those areas that traditionalists have little imperative to explore.
Examples are price comparison sites (one of the earliest forms of insurtech that was eventually snapped up by the insurers it initially sought to disrupt), claims software, customisable policies, or even smart-tech-enabled dynamic policies whose premiums can fluctuate depending on changing circumstances.
The latter, for instance, could use someone’s fitness tracker or smartwatch to monitor fitness levels, thus reducing the premium of a life insurance policy; or track a GPS system that records the location of a car and assesses risk levels accordingly.
Most consumers tend to shop around for their insurance needs and perhaps end up buying their contents insurance with one provider, their car insurance with someone else, and their pet insurance with yet another underwriter. Managing all these different policies, with their varying renewal dates and payment terms can be complex. This has led to the increase in apps that pull everything together.
More prosaically, insurtechs are developing AI that uses machine learning to act as an insurance broker, eliminating the need for a human intermediary and therefore offering more cost-effective and impartial advice.
Insurtechs and risk
But there are some obstacles in the way of insurtech’s continued evolution.
Insurance companies are averse to risk. Understandably so, as at the crux of the industry is the role of the actuary, whose job it is to analyse and measure the probability and risk of future events. So it’s little wonder that there’s a reluctance among the traditional players to welcome the disruption that insurtech brings.
Insurance is heavily regulated, a minefield of legality and labyrinthine jurisdiction, which means the idea of shaking it up can be anathema. And why would they, when their old-school business models are working perfectly fine?
There’s an understandable nervousness and unwillingness to work with startups, who themselves need to work with the bigger firms in order to underwrite risk.
While it seems like a catch-22 situation, there is growing, if cautious, interest from insurance companies, who can see the benefits of insurance with a friendlier face, innovative solutions, and a competitive edge through differentiation. As that tentativeness dissipates, the growth of insurtech will gather even more momentum.
Tom Allen's analysis is based on the findings of a new report on the fintech and insurtech industries produced by The AI Journal.