App crowdfunds to disrupt insurance industry
The tech entrepreneurs behind a new insurtech start-up which is raising funds through a crowdfunding round say they want to solve problems that have been plaguing the insurance sector for decades.
Celo is an app-based insurance provider designed to provide cheaper quotes, faster claims and a "pleasant user experience".
In the same way that digital-only banks Monzo and Starling are disrupting banking, Celo was established with the aim of disrupting the insurance industry.
"Insurtech is being ignored a lot by quite a lot of people for some reason and we wanted to solve some of the problems that have been there for up to 20 years," co-founder Aravind Vijay told BusinessCloud.
"You've these insurance giants and companies who have been using the same system for about 20 years and they haven’t changed at all.
"The only change that has come to the UK, I would say, is telematics and they haven't even done that properly so we wanted to bring it to a point where we can actually bring positive change and increase the adoption of telematics devices.
“That’s where the whole idea for Celo came from. We thought we can actually use telematics for good rather than just tell people to 'not drive at night'. I mean these statistics haven’t worked for years."
Celo has launched a crowdfunding campaign on Crowdcube to raise a minimum target of £100,000, which it will use to support the development and launch of its new app.
"The crowdfunding round is just to get us to the MVP (minimum viable product) launch because when you go and approach VCs they like to see that you have traction," Vijay added.
"The money will help us roll out the app as soon as possible. We will be coming out with a closed beta within the next two months and we’re hoping to launch an open beta, where people can actually sign up from outside the investor circle, by August this year."
Celo plans to start with insurance cover for motor vehicles before expanding into travel, health and gadgets.
The start-up will use behavioural analytics technology to provide customers with customised insurance products and plans to build its own risk model based on customer behaviour, rather than rely on existing ones.
"That's the challenge we have and that’s what we want to solve,” Vijayakumar said. "There’s more to people than just plain statistics. You don't really know a person just from an overview of a thousand people."
Co-founder Giridharan Rajaram told BusinessCloud that competing against traditional insurers is among the biggest challenges facing the start-up, because "they have all the money and resources".
"We're trying to disrupt the industry but we need more backing," he said.
"We have all the ideas, but to get there we need to be more proactive and raise enough funds. I would say that time is our biggest challenge; we want to be quick to the market."
Enjoy extra content and videos in the interactive digital magazine below