UK insurtech Urban Jungle raises $11.4m for expansion plan
Urban Jungle, the UK-based home content insurtech startup, has raised $11.4m in investment capital to expand its business offering. The company has made a name for itself providing affordable insurance specifically created for renters, people in house shares and those who struggle to gain insurance cover.
Founded in 2016, Urban Jungle’s policies are underwritten by Ageas Insurance and the insurtech has raised $22m to date in investment drives.
The technology-driven company, which has grown consistently since the beginning of the pandemic, was founded by former Google developer Greg Smyth and Jimmy Williams, now has a 30-strong team and a 40,000-strong customer base
CEO Jimmy Williams, explained “Our tech platform means we can grow our customer base rapidly without having to build an army of customer service agents. That said, we’ve got ambitious growth plans, so we’ll be doubling our headcount in the next 12 months to support that.”
He continued, “Insurance companies effectively discriminate against various different groups, for example young customers, people on low incomes or people who have moved to the country recently.”
Urban Jungle and customer centricity
Williams said the company philosophy was based on customers not being charged for aspects of cover that are beyond their control. The data gathered by Urban Jungle enables the company to detect very quickly when potential fraudsters are lying.
“As a result, it allows us to offer cover to a much broader group of customers who have proven to be honest,” he explained.
“Yes, we’ve made insurance 100% digital, fast, flexible and affordable, but it’s our ability to help a very broad range of customers, with carefully crafted insurance products, that really makes us stand out.”
Williams added that the funding will enable the company to continue to scale rapidly and add new insurance products to its current offerings. “We are looking to expand quickly into several new markets and to shake up the insurance industry. It’s still dominated by big names and I’m enjoying giving them a run for their money.”
Speaking about the latest funding round, Yago Montenegro, investment director at insurtech fund Mundi Ventures, said the insurance industry is experiencing a major shift powered by new technology and innovation and it is accelerating.
“Jimmy and his team go beyond what traditional and emerging competitors are doing. They are a team of scientists experimenting on the best ways to cover risks and provide insurance. We are very excited to back them as they expand their reach and range of products.”
Image credit: myurbanjungle.com
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.