Welcome to the ABI InsurTech Spotlight, Week 7. Each week I’ll be putting questions to one of the movers and shakers of the UK InsurTech arena – the leaders of exciting InsurTech businesses, InsurTech and innovation leaders within ABI members companies, InsurTech experts, commentators and investors. This week we talk to Tobias Taupitz, Founder and CEO of Laka (previously Insure A Thing).
Hi Tobias, could you tell us what Laka is all about?
Laka is the first provider of cover that truly aligns its interests with its customers, by generating revenues when acting in their best interests, through settling claims.
Focusing initially on high-end bicycles, we challenge the traditional actuarial model in the insurance sector, where premiums are paid upfront which can lead to customers being in the weaker position when it comes to claims.
Instead, we propose a new model where we pay out first, and only at the end of the month ask customers for a share of the actual cost of claims to recover our expenses, and then only up to a clearly defined cap.
The cap is set at market rate, and as such customers will never pay more than with competitors, but jointly benefit through lower payments if there are fewer claims than expected.
Laka will earn revenues by adding a fee on top of settled claims and therefore only make money when we pay out.
Could you talk us through your recent re-branding exercise?
We felt that Insure A Thing sounds like a traditional broker and does not tell a great story. That clearly needed to change.
Laka is the Hawaiian goddess of prosperity - and Hula-dancing.
We want our customers to prosper, and have some fun alongside them!!
And what about you – could you tell our audience something interesting or surprising about you?
Whilst still working in FIG M&A I was awarded a prize for most casual outfit on casual Friday: timberland sailing shoes in a fresh mint green. That’s how far you can bend the rules. I got a Snickers bar and the request to never wear these again at work.
You worked in a highly corporate banking environment before beginning the Laka adventure. Talk to us about why you made that big career leap, and what the main differences are between your new working day and your old one.
Having worked in Corporate Finance provided me a great set of tools to work with.
I was lucky enough to look after FinTech and Insurance clients and at some point these two worlds merged in my head. There never was a pro / con list whether I should pursue this idea or not. The model made sense in my mind and, following some positive feedback, knew that I had to try it.
Of course there were challenges adopting to a less structured environment.
One notable conversation was when I asked my co-founder and CTO to provide a detailed Gantt-chart on how we go about developing our tech platform and his response was “no, we’re following an agile approach”.
In our early days, my other co-founder Jens often had to serve as an intermediary. His background in economics and software development prepared him well for this role. By now we all are working hand in hand closely together.
You’ve been a high profile participant in Startupbootcamp. What do you get out of that programme, and how important is it to be building your business in a city with not only a thriving insurance sector but also a thriving tech community?
My main duty as the CEO of Laka is to keep the lights on. Hence everything I can do to reduce the risk of failure I see as hugely beneficial to our cause.
This includes the Anthemis Fellowship program, which helped me re-socialising after my time in banking, or a highly structured accelerator program like SBC InsurTech.
Acceptance to both meant that a team of highly experienced innovators have reviewed our proposition and believed that we might be on to something.
Vast resources in a city like London allows founders to get off the ground without such programs, but it certainly increases your odds and provides invaluable support, especially during the rougher patches.
Could you tell our readers where you have got to with Laka up to this point – I know it’s been a very busy couple of months while most people have been away on holiday.
We were lucky to be accepted to the FCA Sandbox, which provides us with a regulatory framework. This is particularly important as we are introducing an unprecedented business model.
As part of the 2nd cohort of the Sandbox, we are currently preparing for launch with our first product, cover for high value bicycles, in the next few weeks.
If you are an avid cyclist, check out our new website and join the ride: www.laka.co.uk
So at the moment the business is all about bikes, but are there other niche areas that you have your eye on for the future?
We believe bikes are a great starting point, and we are immersing ourselves in the eco-system.
The exciting thing really is that our model is highly scalable. If it works for bikes, it works for a whole range of other products. I would like to leave it to the reader to think of products where our model be applied. There will be many of them.
Finally, what would you expect to have achieved with Laka in a year’s time?
At this stage, we are most determined to successfully launch a product in the UK market and prove that consumers accept alternative forms of cover.
In a year’s time we aspire to be a proven, true alternative for cyclists.
We have a strong pipeline of further products and in 12 months’ time will likely have extended our offering.
On a more generic note, I would be particularly happy if Laka remains an active part of a striving UK InsurTech community which collectively pushes boundaries, to the benefit of the consumer.