By enabling individuals with specific insurance needs to get more attractive offers from existing providers, through collective buying data, Bought By Many hails itself as the UK’s first “insurtech” startup.
The innovative business model uses social media and search engine data to offer bespoke insurance cover to customers. Pet owners with rare breeds can, for example, receive affordable pet insurance offers, while those with rare medical conditions can receive travel insurance.
As well as just having closed a £7.5m Series A funding round led by leading venture capitalists Octopus Ventures, Bought By Many has also signed a landmark long-term agreement with major insurer Munich Re, which will enable the platform to launch its own products and expand the business.
Business Advice sat down with co-founder Steven Mendel to find out more about his startup experience and plans for the future.
(1) Who are you and what’s your business?
I’m Steven Mendel, CEO and co-founder of Bought By Many. We are a UK insurance technology company on a mission to improve the customer experience of buying insurance and the quality of policies available.
We do this by analysing internet search data and social media to identify unmet consumer need for insurance. We use Facebook and other social platforms to connect people who share these needs in groups, and use the group’s collective buying power to negotiate offers, and better terms, that wouldn’t be available to individuals.
(2) How long have you been around for?
Along with my co-founder Guy Farley, I started Bought By Many in 2012. Since that time, over 260,000 people have become members, and we’ve helped thousands of people find insurance for the things in their life that are slightly out of the ordinary, and grown the business to over 40 employees, with sites in both central London and Sussex.
(3) How do you make money?
We get paid a commission by insurance providers on any policies they sell to the customers we bring them.
(4) What makes you different and why should people take notice?
Most incumbent insurance providers are focused on the “short tail” of insurance needs – the more mainstream needs. So, if you are looking for typical car or home insurance, you won’t struggle to find a lot of providers offering competitive prices in the UK.
We’re here to help people find insurance for the out of the ordinary – be it travel insurance for someone with a medical condition, pet insurance for a specific breed of animal or cover for an extreme sports hobby. The members-only offers we negotiate are either discounts or more tailored benefits, which generally wouldn’t be available to individuals. We plan to launch our own products that will, in addition, feature an exemplary customer experience and unique terms.
(5) What was key in terms of getting started?
I was inspired to start the business after I left a corporate career and discovered the cost of my family medical cover would quadruple. It’s incredibly unfair that large companies can negotiate such enormous discounts, while individuals don’t have an easy way to do so.
Once we launched there were various regulatory hurdles to overcome. This is where having a background in financial services helped, and we were able to gain accreditation from the Financial Conduct Authority (FCA) in record time.
(6) What’s your biggest achievement to date?
There’s been a number of landmarks we’re hugely proud of as a business. Since starting in 2012, we’ve been identified by Boston Consulting Group and Morgan Stanley as the global exemplar of innovation in insurance distribution, and awarded Best Use of Mobile Technology at the Digital Insurance Awards in 2014.
In 2015, we launched our SaaS platform in China in partnership with Ping An Insurance, became directly regulated by the FCA, and acquired Brooks Braithwaite – the UK’s leading provider of insurance for exotic pets and pet businesses.
The same year we were named Fintech Innovation of the Year & Insurance Start Up of the Year. In 2016, we won the Innovation in Insurance Award at the Fintech Innovation Awards, and were named in the FinTech 50.
For me our one standout achievement was the winning of the British Insurance Innovation Award in 2015 in front of all our peers in the Insurance Industry.
(7) What setbacks have you had along the way?
One of the challenges we’ve faced as a business is our relationship with large insurance companies – which are our clients. It’s fair to say that major corporates move far slower than a startup like us, so it was a challenge to take them from their initial interest in us as a business to wanting to form commercial agreements.
We are keen to work with them to bring them the exact risks that they are looking to address and so we see this as a win-win for both insurers and consumers.
(8) In five years’ time, I will be…
In five years’ time I’d like Bought By Many to continue to be known as a company that is improving the customer experience in finding insurance.
Our funding round of £7.5m and, more importantly, a commercial arrangement with Munich Re, will allow us to follow our ambition of launching our own range of insurance products to market, taking learnings from over 40,000 lines of social media feedback to create entirely new, customer-designed policies.
We also hope to be able to repeat this process for many other insurance products, creating a wide-ranging set of offerings designed by consumers to meet their specific needs. Then, who knows, maybe we’ll repeat this overseas in the coming years.
(9) What one tip would you give to others starting out?
Don’t be afraid to use your network. Speak to people you know and ask for introductions, as you never know who could be a potential employee, investor or partner in the future.
And don’t be afraid to be challenged – when we set out everyone we spoke to thought we were mad: “Why would you launch a startup in the insurance industry, there must be much easier routes to building something new?”
Today, nobody would challenge such a move. If you’ve done your homework, have listened to the challenges and are still convinced you’re on to something, then back yourself.
(10) Who are your business heroes and why?
My late grandfather, who ran a kitchenware shop. His ethos on what to stock was driven entirely by what his customers asked him for, never by his suppliers and never by his own plans.
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