Brolly, the UK insurtech startup, is helping make insurance buying work better for consumers. Alex Lawrence-Archer, Head of Operations, explains how through its AI-driven insurance advisory services app, Brolly is modernising insurance distribution and helping consumers keep track of what they’re covered for and with which insurers.
Tell us more about Brolly, including what needs are you are trying to solve and what makes your company and your vision unique?
Most people are overpaying for their insurance, because they fall into the renewal trap. You don’t switch every year, and voila, your insurer puts up your premium. Customers also have fragmented portfolios and struggle to keep track of what they’re covered for and with which insurers. The people who do switch often are overloaded with options that aren’t necessarily tailored to their needs. The dominance of price comparison websites in personal insurance distribution has fuelled a lot of these problems. We want to make insurance buying work better for consumers.
We also think the changes we’re making will benefit insurers. The relentless focus on price forces insurers to sell at a loss on price comparison sites, hoping to hike up prices when customers auto-renew. This isn’t a sustainable model in the long-run.
Other UK InsurTechs are applying mobile tech and AI to specific lines. We aim to solve these problems by modernising insurance distribution. By bringing everything into one place we make it easy for customers to understand and manage their insurance. We can then identify ways users can optimise their coverage and help them act on those insights in a few taps through our shop.
Where is Brolly on its journey and what have been the key challenges in getting there?
We’re just under two years old and things have been moving pretty quickly! Our first 9 months were very much about prototyping different versions of the product and speaking to a lot of users to understand what frustrated them about insurance and how we could use technology to make it better. We launched a pre-Beta version in late 2016, around the same time we raised our seed round. Over 2017 we grew from a team of 2 to 12 – mainly bringing on engineers – rebuilt the product and started selling travel insurance. Feedback from our users is that they find our policy management and insights useful, but they want more options to purchase, so 2018 is all about building out our marketplace and finding ways to help users save money or improve their coverage as effortlessly as possible.
One of our biggest challenges was definitely hiring the right team. We’ve done a lot of work generating leads for key roles as we’re conscious of how important it is to bring people in who share our values. On a more practical note a mix-up with dates meant that in Summer 2017, we discovered our office was going to be demolished within 2 weeks and had to find an alternative pretty fast!
Incumbent insurers appear to have been slow in fostering innovation, with InsurTechs being the main driving force behind change in the industry. What areas of insurance do you feel are ripe for disruption and why?
We see and work with lots of insurers who are really keen to foster innovation and partner with InsurTechs, whether that’s working on distribution, providing capacity, funding start-ups or setting up internal incubators. There are a lot more constraints faced by incumbent insurers, and it’s much easier to innovate as a broker or a insurance agent – especially if you’re backed by VC money.
We think the ecosystem of incumbents and start-ups working together is doing a pretty good job at fostering innovation at the moment. That said, the more that can be done to bring incumbents and start-ups together, the better. Tech City UK is doing great work on this by bringing people together in a forum with really clear, concrete goals in mind.
Like lots of people, we’re not that keen on ‘disruption’ as an approach, but we definitely think there are lots of ways that insurance can be improved for ordinary people. One of the key issues we see is that people don’t shop around enough for their insurance and, when they do, they’re using price comparison websites that don’t necessarily give them the full picture.
We’re in a period of transition where people are expected to make rational decisions about these complex financial products, they no longer use traditional brokers, but the tools available to help make those decisions haven’t quite caught up. If people aren’t switching in the way they should, that’s a failure of the market – we see it as similar to switching bank accounts or energy providers. It’s our job to figure out whether that’s because they don’t have the right information, it’s just too much admin, or something else, and then fix it. This isn’t just good for customers – in the long run a more efficient market is good for insurers too!
Are there any key trends and/or technologies that you feel will be game changers this or next year within the insurance space?
We see the continued rise of the challenger banks and smart wallet/budgeting apps as a big factor for the next couple of years. Lots of these apps are looking at ‘marketplace’ models for monetisation, and insurance makes a lot of sense as a product in those marketplaces. Others might look at providing or white-labelling their own insurance products. This could have a big impact on insurers – incumbents and new entrants alike – but it remains to be seen how it will play out. We’d expect to see these players focussing much more on the more straightforward products – like travel and mobile phone insurance – for now.
From our perspective, open banking is really exciting. We want to make it as easy as possible for our users to complete their insurance profiles. The more we know about a user’s policies, the easier it is for us to find savings for them fast. One of the ways we currently do this is by scanning users’ emails (with their permission!) for insurance policies using our machine learning algorithm, but bank account integrations could be a great way to augment this.
In the longer term and more broadly, we’d expect to see the increasing number of data points on individuals – and the increasing ease with which that data can be shared with and analysed by insurance providers – as a game-changer for insurance pricing and personalisation. People are right to point at the risks of this. We see more upside in the long-run, and it’s up to us and others in the industry to shape it for the benefit of customers. We think about this a lot, and are planning on putting a more detailed blog out on this in the near future, so look out for that!
Many FinTechs, including in the insurance space, rely on partnerships with incumbents. What is your take on these partnerships – from your own experience or observing others?
As a broker, partnerships with incumbents are crucial for us. Happily, we’ve found our partners to be pretty responsive and keen on finding ways of collaborating in ways that work for both sides. I do think there is a certain amount of adjusting expectations that’s required, particularly in terms of the speed at which incumbents are structurally constrained to work. When your whole company is 10 people sitting in a room together, it can be hard to imagine how making any decision could possibly take longer than an hour, let alone weeks or months! So it helps to have people on the team with a bit more experience with big institutional timelines.
There are also differences in culture: ‘move fast and break things’ isn’t right for everyone, and certainly not highly regulated businesses with millions of customers. We see it as our job to come to the table with constructive situations on how we can partner. It really helps if you can identify an advocate within the organisation. They might not necessarily be the most obvious person in the organisational chart, but if they’re motivated by innovation they can work wonders for you as an internal backer.
What does the year ahead hold for Brolly? Are there any future plans you can share with us?
It’s always hard to predict what we’ll be doing much further than a few weeks! We try really hard to be led by experimentation and data, so we look at low-impact ways to learn new things and get new insights that will help us decide what to invest time in at a more significant scale. That said, the core driver is finding ways to help our users optimise their insurance coverage and making it really easy for them to take action. We’ll follow the data on this wherever it takes us!
This will almost certainly include adding more products to our shop, but we want to make sure we’re providing really good experiences with a few important products rather than going for full market coverage straight away. We know there’s a lot we can learn and we’re in the lucky position of being able to build without legacy constraints to design things with the customer in mind from the start.
What is the one pearl of wisdom you would share with FinTechs starting their journey and why?
Culture is key. It touches so many aspects of a company’s ability to adapt and grow – people’s positivity and bias to action, willingness to experiment and learn, the ability to find creative solutions and a lot more besides. Having every decision centralised doesn’t work well. A strong culture is what allows a team and individuals to work autonomously and creatively, knowing that everyone will be working towards the same goal.
Whilst not hiring ‘brilliant jerks’ is important, it’s also about more than that. You have to actively and consciously build culture, otherwise it will build itself. This means thinking about – and making decisions based on – this, early. This is especially true of hiring. It’s important to get together with your growing team earlier than you think, reflect on what’s going well and what can be improved, and be intentional about building the company’s culture together.
About the Author:
As Head of Operations at Brolly, Alex Lawrence-Archer works across finance, legal and operations, as well as supporting CEO Phoebe Hugh to develop and realise the company’s overall strategy. He was one of Brolly’s earliest employees and helped the company grow from 4 to 12 and move into a brand new office across 2017. Alex started out as a corporate lawyer in London before spending four years working as a strategy consultant in international development in East Africa and the US for the UN and European Commission.
More about FinTech Vantage:
This post is part of the FinTech Vantage series by KAE that provides a fresh perspective and hears first-hand from various players across the FinTech ecosystem.
KAE will be posting a number of interviews with FinTechs that share their candid viewpoints and to really get under the skin of the FinTech world.
If you would like to share your views and participate in the FinTech Vantage series, feel free to reach out to us at FinTech@kae.com