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10th January 2018
InsurTech Laka challenges conventional insurance model
Laka, formerly Insure a Thing, is challenging the conventional insurance model by offering a truly disruptive bike insurance product, co-built and financially backed by Zurich.
Laka only earns fees when acting in the best interests of the consumer–namely when settling claims. No upfront payments or premiums are paid by a consumer, instead at the end of each month claims are settled as part of a group risk pool(a bike club for example) plus a fee. The payment will change each month but will be capped at the price of a traditional insurance policy, therefore, if claims performance is better than expected in one month everyone will share in that improvement.
Due to this innovative method of pooled payment calculation, consumers are also nudged towards behaving in such a way as to reduce the number of claims, which are simply reported on a smartphone and paid with no excess.
Laka has tested its model as part of the Financial Conduct Authority's(FCA’s) Regulatory Sandbox.
Co-founder of Laka, Jens Hartwig comments “While this tried and tested insurance model obviously works, we think there’s an alternative way which can benefit careful consumers–a way which shares with them the pricing and claims decision-making. We’re starting with high-value bike cover but as our model proves successful, we look to explore other products in the pipeline.”
David White, head of Retail Management at Zurich, adds “Innovation is an often over-used word but Laka is one of very few InsurTechs doing something genuinely exciting and disruptive. We look forward to working with Laka in the future as they expand their proposition further.”
Zurich Trends(723 articles)