Cuvva's pay-monthly product aims to cut out brokers and aggregators

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InsurTech Futures: Start-up has also raised £15m, with Lloyd's of London chairman Bruce Carnegie-Brown and JLT CEO Dominic Burke among the backers.

InsurTech broker Cuvva is set to launch a pay-monthly motor insurance product, which it claimed is the first of its kind.

According to the app-based broker, the new product will launch in early 2020 and the plan is to “cut out all middlemen including brokers and comparison websites”.

The start-up is regulated as an insurance broker and founder Freddy Macnamara denied that it aims to be a disruptor. He described the business as a technology platform and a marketplace.

“We want to work with carriers to create a new way of buying insurance,” he told Insurance Age.

Brokers
However, he warned that brokers who do not move with the times risk losing out as customer expectations change. Macnamara has previously predicted that tech will change broking forever.

“Anyone who sits on the same old business model for decades is eventually going to get someone stamping at their heels,” he added.

“What I see Cuvva as doing is creating a new market, though. We’re not playing in a zero sum game, we’re playing in a game which is increasing in size.” 

Dual pricing
The start-up further pledged it will not charge a fee to spread payments over the year or “penalise loyal customers with dual pricing”, adding that it will offer the same savings to new and returning customers.

Macnamara continued: “There’s nothing out there that actually turns on its head the way that UK motor insurance works. Everyone does it in exactly the same way with exactly the same products.

“There’s nothing out there that provides more flexibility to customers. Fundamentally, this product gives them the ability to cancel or pause at any time.”

Funding
Cuvva further announced it has raised £15m from venture capital backers along with angel investors from the insurance industry, including Lloyd’s of London chairman Bruce Carnegie-Brown.

Carnegie-Brown joined Cuvva as chairman in October this year. Other backers include JLT chief executive officer Dominic Burke and Faisal Galaria, the former chief strategy and investments officer of GoCompare.

“We’ve talked to a lot of people in the market,” Macnamara explained.

“We obviously have the venture capitalists who are putting up most of the cash, but there might be blind spots in the way that they can help business that can be filled really effectively by big-hitting names from the industry.” 

The investment round further saw RTP Global, Breega and Digital Horizon join seed investors LocalGlobe, Techstars Ventures, Tekton and Seedcamp to invest in the app-based business.

Expansion
Cuvva, which launched in 2016, stated that it has since sold more than 40 million hours of insurance and has over 250,000 customers.

It stated that it plans to use the money to expand its team, adding engineers, developers, marketeers and customer operations staff, with the aim to double in size over the next 18 months. The broker currently has 80 staff.  

In August, the start-up launched a travel insurance product, but Macnamara noted that there were no immediate plans to expand into other areas of insurance.

“At the moment we’re focused on motor and travel,” he concluded.

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