InsTech London’s Henry Gale speaks to Harry Croydon, Founder and CEO of Micro Insurance Company about why he started the company and how to sell microinsurance products at scale.
Harry, why did you found Micro Insurance Company?
The smallest businesses, the gig economy and around 4 billion people who lack social protection(1) are underserved by insurance globally. Five or six years ago I resolved to develop new technology that could enable insurance for these customers. My team and I set out to create an insurtech MGA, but we could not find any insurers interested in supporting a range of small-scale policies.
This experience led us to set up Micro Insurance Company as a full-stack insurance Property and Casualty (P&C) and Life company that does underwriting, configures its technology and carries the risk capital. Micro Insurance Company acts as a partner to new platform companies, banks, telecommunications companies and internet of things (IoT) providers. They distribute our insurance to their customers to enhance their customer propositions or increase revenue. Micro Insurance Company currently provides insurance in 12 countries.
What size is Micro Insurance Company now?
Micro Insurance Company now has 140 people and 2.5 million customers. Our gross written premium in 2021 will be around $12 million, up from $5m in 2020. We complete hundreds of thousands of policy processes per day.
How do you define the concept of microinsurance?
The insurance industry historically considered microinsurance as insurance sold to those on low income. At Micro Insurance Company we consider microinsurance to be ‘low-premium, high-velocity insurance’, which can be sold anywhere in the world. Simple, repeatable, and relevant, this is how we think about our products.
Our products typically have low premiums over short durations but are accessible to a large market and sold at scale. For example, one of our products insures packages left on the doorsteps of customers with a smart doorbell. The insurance is sold embedded with the purchase of the doorbell. The smart doorbell is basically a security product, with the insurance providing extra protection for its customers. There have been many successful claims, all paid within a short period of time.
We are also responding to the changing nature of consumer behaviour. Products are increasingly being purchased online for delivery with more people affected by late delivery and damages. Embedding insurance into these processes means that when things happen issues can be resolved though insurance in a quick and timely manner.
How do you scale the distribution of microinsurance products profitably?
Micro Insurance Company’s products are typically based on binary events: for example, either it is raining, or it is not; either a delivery is late or it is not; either someone goes to the hospital or they do not. This allows us to provide a quick, ‘parametric-like’ pay-out achieved by integrating with our partners through APIs. Technology is the key driver to scaling our business and delivering at scale.
With microinsurance, it is also important to have frictionless processes and simple products that people can understand. Many of our customers are first-time buyers of insurance.
What insurance innovation trends are you expecting to see in 2022?
Much of insurtech innovation is not cutting-edge technology, it's about applying technology already used and tested elsewhere. Low code, Artificial Intelligence (AI) and improved process.
Why did Micro Insurance Company join InsTech London as a corporate member, and what sort of companies would you like to connect with?
I attended the earliest meetings of what became InsTech London with Robin and Paolo. The reason for me is the same then as now, it’s about finding like-minded people who think technology is important to insurance and who want to make a difference to people’s lives.
We would like to connect with potential partners who want to sell microinsurance products or use insurance as a benefit to their customers, and like-minded people within insurance companies.
For more information on Micro Insurance Company, go to microinsurance.com