With a focus on automation, the startup will be led by key industry players, including esure’s Jon Wilshire

Entrepreneur Nigel Lombard, the founder of digital car insurance MGA Hedgehog, will be launching a new mass motor insurance MGA in 2021, supported by industry veterans such as Chris Hill, Paul Cassidy, Peter Goodright and Jon Wilshire, who is currently esure’s chief underwriting officer.

The new business, named Peppercorn, aims to make it easier for customers to understand, buy and engage with insurance products through the use of self-serve digital channels and automated intelligent conversations.

Peppercorn, which will be distributed via major price comparison websites, believes that its automated, digital approach will deliver a low operating expense ratio, which in turn will help to keep premiums low and competitive.

The MGA is currently in talks with potential lead investors and capacity providers ahead of its scheduled launch next year.

Nigel Lombard

Nigel Lombard

Speaking on the new venture, Lombard told Insurance Times: “Our digital service model means we won’t need large call centres and the associated property and servicing costs.

”We’re confident customers will benefit from affordable premiums just as much as industry partners will want to work with us.”

Digital benchmark

Peppercorn will enable its customers to find information about their policies as well as make policy changes, payments or claims using voice assistants, web browsers and WhatsApp.

”Although the business is digital-centric, customer agents will also be available when necessary.

Lombard explained: “Many insurance brands claim to be digital, but they tend to fall short of the potential.

”Too often customers will find themselves frustrated by painful website navigation or chatbots that do nothing but refer to call centres.

“The Peppercorn experience will bring insurance up to - if not surpass - the level which customers interact with companies digitally in the rest of their lives.

“By delivering a digital experience that doesn’t end in frustration and having to make a phone call, we believe we will achieve the holy grail of market beating low operating costs, competitive premiums and greater customer loyalty.”

Peppercorn’s policies have been designed to be flexible, Lombard added. Customers will be able to upgrade or decrease cover as their circumstances change, paying only for what they need. Multi-car pricing will also be built into the MGA’s model.

New market entrants

The FCA’s recent action around price walking means that Peppercorn’s launch is well timed, Lombard continued.

“The end of loss-making introductory offers means new market entrants like Peppercorn will be able to take advantage,” he said.

“Incumbents, who have essentially been using their more loyal customer base to subsidise new customer acquisition costs, won’t be able to use this tactic anymore.

”They’re also struggling to transform from expensive, staff-heavy legacy business models to automated, digital models.

“Our model will be free from both – by design.”