Zego became the first UK insurtech to obtain an insurance licence earlier this week, but its CEO says brokering cover will still form the bulk of business
Zego CEO Sten Saar says brokerage is still a key part of its business, despite becoming the first UK insurtech to obtain an insurance licence.
The company — which began its journey insuring gig economy drivers before branching into fleet cover — announced it had obtained the licence in Gibraltar earlier this week.
But Saar said Zego’s role as a broker between insurance companies and policy seekers still makes up the bulk of its business — expecting roughly 20% of risk to be written under the new licence.
“This is a huge milestone for Zego and a clear signal that we are here to stay,” he adds.
“The licence is also an essential ingredient in our mission to transform the insurance sector, by creating flexible policies which better reflect risk and truly cater to the fast-evolving world of mobility.
“But brokerage is still an important part of Zego’s business model and we won’t carry risk for all of our product on the insurance licence — we will maintain our existing insurance company partnerships and continue to add more.”
The CEO previously told NS Insurance of Zego’s plans to capitalise on the growing new mobility fleet market, covering electric scooters and bikes, as well as more traditional vehicles.
In an update on Zego’s performance in this area, he referred to the level of growth as “incredible”.
“We’ve recently partnered with car subscription service Drover and e-scooter sharing platform Dott and we’re excited to develop cover for all types of vehicles and new mobility business models over the coming years,” he adds.
“In the fourth quarter of this year, fleet business has doubled its share of our total gross written premium.”
UK Insurtech Zego backed by reinsurance capacity
Zego policies are backed by 15 reinsurers rated A or above by global ratings agency AM Best, including industry giant Swiss Re, which said it’s in it for the long-haul with the UK insurtech.
Head of property and casualty lines for the UK & Ireland Simon Welton said: “Swiss Re is very pleased to have been able to support Zego with our risk knowledge and reinsurance capacity.
“We have been impressed by Zego’s innovative and passionate approach to creating new insurance products which meet the changing needs of customers. We look forward to continuing to work with them in the future and supporting their growth plans.”
Better data collection
One of the main ambitions for Zego in obtaining an insurance licence was the ability to collect more data on driver behaviour and external risk — with an end goal of developing software to price policies automatically.
Saar said: “We soft-launched Zego-insured products in October, starting with flexible delivery work insurance.
“The most important thing about the licence is that it enables us to develop smart pricing technology, tailored to match the customer’s true exposure to risk and to implement changes at speed.”
News of the licence just comes five months after Zego raised $42million in Series B to fund expansion, with the insurtech currently operating in the UK, Ireland, Spain, France and Belgium.