Insurance is a great idea... but it hasn’t kept pace with society. We’re giving it a long overdue digital upgrade.
Wrisk is insurance made so simple it's almost unrecognisable. Buy, update and claim anytime with immediate effect. Manage different types of insurance seamlessly through a single app. Pay flexibly through your mobile.
And that’s just the beginning.
Wrisk is about more than just buying insurance – it’s about managing and understanding your risk. Developed using advanced data science and actuarial techniques, our unique Wrisk Score is like a credit score for personal risk, enabling better, more transparent pricing. By gathering data from connected tech, we stay accurate without being annoying. By giving customers control of what they share, we can be clever without being creepy.
The possibilities are endless. The benefits to customers are transformational. The opportunity is huge.
Once Wrisk launches in 2018, you'll find it hard to think of your insurance any other way.
Currently, 61% of people who rent don’t buy insurance. 31% of millennials who travel never buy travel cover. 30% of millennials who drive are not the main policy holder. A whole generation seems to distrust insurance, but being uninsured leaves them vulnerable in emergencies.
It doesn’t have to be this way. Through challenger banks, mobile payments and budgeting apps, people are more ready to engage with financial services than ever – on their terms. Make it easy and accessible. Strive to be ethical and fair. Build and maintain an open, responsive dialogue. Focus on people, not policies.
By engaging people through their phones and providing holistic cover, Wrisk will make it as easy as possible for as many as possible to get the insurance they need, meaning fewer end up in long term hardship when the worst happens. Beyond this, prioritising convenience and a new approach to transparency has the potential to engage brand new customers – kickstarting a new mass market for insurance.
Substantial accomplishments to date
We may work and act like a tech startup, but we know insurance is a serious, complex and heavily regulated business. Wrisk is made up of an experienced and passionate team of insurance and technology professionals. We’re partnered with industry heavyweights Munich Re and Hiscox, and have commercial agreements in place with the likes of BMW. And we have £3M already invested, with backers including a VC lead, high profile angels and insurer investors.
Please note that FCA authorisation is required for Wrisk to offer its services and the app will not be launched until FCA authorisation is received.
Wrisk will be an agency, acting on behalf of major insurance companies such as Munich Re and Hiscox, respected incumbents known to support innovation in their partners. The agency model, known as a Managing General Agent ('MGA'), is one that’s widely used in the insurance sector.
As with all MGAs, the insurance liabilities remain on the balance sheet of its insurance partners, and as such Wrisk’s own revenue will come from:
1. Commission per transaction, paid by its insurer partners.
2. Profit commission, calculated annually and paid to Wrisk by its insurer partners.
3. Licence fees for the use of Wrisk in those territories where an MGA model is not appropriate.
Beyond these traditional sources of revenue, our roadmap also includes exploring additional derivative sources, such as referral fees in respect to non-insurance products, and possibly even licensing the Wrisk Score as a proxy rating tool for insurers in countries where traditional rating data is more scarce.
Use of proceeds
Our current expense breakdown is approximately:
* 70% salaries, the bulk of which are for technology staff.
* 18% advisors (actuaries, lawyers, accountants).
* 12% rent.
Raising funds through this round will give us sufficient headroom for expenditure ahead of a likely Series A round in mid-2018.
The funds will allow the team to focus on other lines of business and start working with partners on specialist products, such as Hiscox (business insurance) and BMW (motor). We will start to pursue our omni-channel strategy by beginning to build out other delivery channels (web, Android, etc.).
We intend to grow from 12 to ~25 people to support this development, with recruitment across a variety of cross-functional roles (engineering, insurance, marketing and support). An increased team footprint means an increase in rent for office space as well as supporting functions (HR, Finance etc). Increasing customer volumes mean we will need to scale some of our SAAS and cloud-based hosting costs.
Please note that the company has 2 convertible loans outstanding.
• The first is a £500k convertible loan, the details of which are as follows:
- The loan accrues 5% interest per annum.
- The total amount including accrued interest will convert to ordinary shares at a 20% discount to the pre-money valuation set by a fundraise of at least £1m at a valuation greater than £9m. This fundraise will not trigger conversion.
- Long Stop Date: 31st December 2019.
- If the convertible is not triggered before the Long Stop Date the investor can decide to either convert the convertible at a 20% discount to the valuation set by an independent valuation advisory firm, or elect to redeem the loan at the nominal amount of the loan outstanding.
• The second is a £192,000 convertible loan, the details of which are as follows:
- The loan is interest free.
- After the 1st January 2019, the Company can request for the loan to be fully paid up or converted to Ordinary shares at the subscription price of the next equity fundraise.
The conversion of these loans will lead to investor dilution.
Please also note that certain investors in the company have A Preference Shares. The A Preference Holders can elect to receive a preferential return on a distribution of capital up to the value of their investment or can participate in the distribution of capital on a pro rata basis (a non-participating preference). The total invested in the A Preference Shares is £1,650,000.
Wrisk’s initial STAY (contents) proposition will target people in their mid-twenties, a few years into their career (HENRYs – High Earner-Not-Rich-Yet). They will likely live in a house/flatshare in an urban centre with other professionals, and will expect seamless digital experiences from the companies they engage with.
Our ideal Wrisk customer is in the 'connected generation' (Gen-C): someone who communicates, builds relationships and makes buying decisions online. They are happy to share information online if they trust the recipient and see that there is a fair value exchange. They prize integrity, honesty and transparency and want to know the people behind any product they use.
They will buy into the company’s brand and values, and as the company grows they will take up new services offered, encouraging their friends and partners to do the same. Insurance will go from being a grudge purchase or luxury spend to being just a natural and obvious part of their personal finances.
Characteristics of target market
Wrisk underwent a market sizing exercise with KPMG in 2016, looking only at the UK premium for contents, our first product:
If you overlay onto these figures the fact that 61% of private tenants in the UK currently don't buy contents insurance, then the figures above understate the potential market size for our contents product considerably.
We intend to create a new mass market of those currently uninsured in the private rental market – due to expand to almost 5.8 million homes by 2021. And this is only our starting point.
At present, many buy the cheapest insurance possible through comparison websites. Without strong loyalty, customers switch easily between insurance companies, led by price and with little understanding of other differences between products or providers.
Wrisk’s dialogue with its customers will be totally different. Our user testing has shown that Wrisk is well placed to win customers who are motivated by user experience and customer service as well as price.
Wrisk is a B2C company, built with a focus on customer experience to make it a compelling mass market challenger brand. However, our route to market is on a B2C and B2B2C basis.
We’re working with commercial partners who either already have a strong digital relationship with their customers, or who have strong brand loyalty which they want to develop into a strong digital relationship. A number of companies have shown their willingness to build working relationships with us and have signed LOIs - or even contracts.
We will track the effectiveness of campaigns beyond acquisition, through the funnel to underwriting, performance and claims. This means our acquisition channels can be used to pre-select ‘better’ risks.
Wrisk’s holistic 'one plan' approach makes cross-sell and up-sell frictionless, enabling us to maximise LTV for acquired customers. Our balance and top-up feature allows us to offer incentives for loyalty and referral by way of vouchers and credits, encouraging viral growth.
Our competitive landscape is divided into two: incumbent insurers and specialist insurtech startups.
Incumbents have become accustomed to very little threat of change. Legacy systems and weak technical infrastructures limit their responsiveness. Most are large, slow-moving, and by necessity more concerned about safeguarding the status quo than reinventing themselves.
Given the size of the prize, the insurtech startup landscape is unsurprisingly busy. However, insurance as a domain has a high barrier to entry and startups face specific challenges getting:
1. Support from insurance company partners.
2. Investment for a product with a long lead time before launch.
3. FCA authorisation.
4. Top-class tech talent into the insurance sector.
Many hone in on narrow slices of the insurance value chain, in contrast to Wrisk's holistic approach. By offering such a differentiated service, we believe that Wrisk will be able to take market share from the incumbents and co-exist peacefully with specialist competitors.
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