Despite the fallout from the FCA’s business interruption test case denting consumer trust, insurtechs could play a key remedying role as they are ’for the people, by the people’
While insurance has always been considered ”a grudge purchase” by many consumers, Andre Symes, co-chief executive at insurtech Genasys, believes it is “actually beautiful”.
In South Africa, where Symes is from, consumers often need to be convinced to buy insurance.
He tells Insurance Times: “There’s no reason for insurance to be a grudge purchase - it does so much good.
”When there’s a catastrophe event, you help people in times of need. Insurance from a different perspective is actually beautiful. There’s this perception that insurers go out of their way not to pay claims, until you explain that it is more expensive to not pay those claims [in terms of] total cost accounting.”
Genasys, which has offices in the UK and South Africa, provides an insurance management platform on a software as a service (SaaS) basis. This includes end-to-end policy and claims administration.
“We need to talk more about why claims are not being paid, rather than brush them under the carpet,” Symes continues.
“If policyholders want claims paid, adhere to policy wording and let’s make that simpler. There is nothing wrong with telling the truth - it builds trust. The consumer needs to understand what they are covered for - that’s where brokers come into play.”
For example, in January 2022, the Houses of Parliament in Cape Town, South Africa, were severely damaged by a fire. However, insurers did not pay out on the subsequent claim as it was discovered that the damage resulted from the sprinkler system not responding due to it not being serviced.
Symes advocates ”more transparency from insurers” to mitigate consumers’ claims payment concerns, citing the FCA’s business interruption (BI) insurance test case as an example where unclear technicalities on policy wordings and exclusions damaged consumer trust in insurance provision.
However, “insurtech being more for the people, by the people is helping change that” negative perception, he adds.
According to the Quarterly Insurtech Briefing report, published by Willis Towers Watson in October 2021, investment in insurtechs surpassed $10bn (£7bn) in the third quarter of 2021. For Symes, this is an important development ”because insurance needs a rebrand” following the industry-wide Covid-related backlash.
He explains: “The more money you put into servicing your customer, the better the experience and the happier customers are.
”The reason we are so supportive of [insurtech investment] is because insurance needs a rebrand. People are irritated by insurance after the BI case - we need a fresh perspective and now that funding is going into keeping the insured happy, people might start loving insurance again.”
Equally, insurtech funding could signpost sector consolidation too, Symes notes.
“We have now seen the shift in funding for insurtechs from front end to operational B2B – this is indicative for consolidation,” he says.
“As the pandemic hit, we were forced to break these analog processes and systems. We started to see the shift in funding go to customer acquisition, to customer funding.”
Despite investment entering the market, the Covid-19 pandemic has ”meant the end” for many insurtechs.
Symes says: “We had a massive insurtech boom pre-Covid, but lockdowns unfortunately meant the end for many insurtechs during [the] series C and A [funding] stage - [the pandemic] cleaned out a highly competitive and crowded market.
”Those that survived Covid had something special - had paying customers and were not reliant on funding.”
‘Feather in cap’ growth
In December 2021, Genasys itself secured a £12.25m investment from European software scaleup Frog Capital - this saw the investment firm gain a majority stake in the insurtech, but Genasys’ management team still retains operational control.
With this backing, the insurtech will continue to grow while striving to do ”good” for its customer base.
Symes says: “Pre-pandemic, we were doing just less than £1bn in gross written premium (GWP) on our platform and now it’s more than £1.5bn.
”We are now in four different continents, [while] pre-pandemic we were only in two. We have been able to grow despite the pandemic and that’s my highlight – we have been resilient.
“We broke into a new market - that’s been a massive confirmation of just how powerful our core system is. It’s a feather in our cap.”
Building the team
Despite appreciating and revelling in the fast growth of the business, taking Genasys from a small family-owned business in South Africa to an international organisation has also been a challenge, especially during the pandemic.
For example, Symes ran the business from his flat in London amid lockdown measures, while the majority of the team were based in South Africa. “My team surpassed all expectations, every single one of them,” he adds.
Genasys now has more than 100 staff, compared to 70 pre-pandemic.
Frog Capital’s operating partner David Williams will become chairman.
Former Duck Creek managing director of Europe, Middle East and Africa (EMEA) Bart Patrick also joined the insurtech as chief revenue officer from February 2022.