Price comparison websites for insurance products have been around for many years. However, typically, people buy from these based just on price, with zero customization based on the person. What’s required is a much more tailor-made service, changing the culture from strictly price-only focused to the “best cover for you.”
That’s the pitch of U.K. startup Sherpa (CrunchBase), which has secured $2.3 million in seed funding from InsurTech.VC and number of angels.
Sherpa — which has yet to launch — has an AI-driven platform that builds a personalized risk profile of an individual. This is constantly updated for members, informs them of changes in risk and the costs of protecting against those risks. It has a partnership with reinsurance giant Gen Re, and has also removed the commission insurance companies typically take, passing this saving back to the consumer.
It’s playing in a similar space to Lemonade in the U.S., which is also attacking the insurance market in innovative ways.
The idea is that Sherpa flips the insurance model on its head, insuring people, not products.
Historically, risk cover is put into packages and then sold with just a few customizable areas. Most of the customizations work for the benefit of the insurer rather than the consumer.
Chris Kaye, CEO and co-founder of Sherpa says they are “doing away with the concept of the insurance ‘product’ and inventing a new, holistic way of underwriting risk. To traditional insurers, you are just the sum of your policies. At Sherpa, we treat each of our members as a unique person whose risks change all the time.”
Kaye previously spent 15 years advising insurance companies as the partner and managing director of Boston Consulting Group’s Asia Insurance practice.
Mehrdad Piroozram, an entrepreneur and partner at InsurTech.VC, says of his investment, “Sherpa has assembled a fantastic team of industry veterans, tech geeks, mathematicians, data wizards and marketing gurus — it’s the best team we have seen in InsurTech.”
Sherpa will operate across all insurance sectors, including home, health, life, travel, car, devices and pets.