Welcome to the ABI InsurTech Spotlight, Week 11. 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 Co-founder and CEO of By Miles, James Blackham.
Hi James, could you tell us what By Miles is all about in a nutshell?
Ultimately it’s a smarter and fairer way of pricing motor insurance.
It makes sense: half of the UK’s cars are driven less than 150 miles a week but traditionally insurers have a very flat rating structure for mileage – or worse, charge lower mileage drivers a higher premium because they don’t believe the miles the customer claims they drive.
By Miles offers driving insurance that’s tailored to an individual driver’s needs and habits. We can charge people for the exact number of miles they drive and give them the opportunity to see how much each journey costs them in real-time in our mobile app.
We’ve done away with annual policies and it works more like a rolling monthly mobile phone bill. You’ll pay less if you go on holiday, for example, because you’ll just be paying the monthly subscription to cover your car when it’s parked while you’re away.
We’re all about providing a service that better fits the lives of our customers and puts them back in control.
And what about you – could you tell our audience something interesting or surprising about you?
Believe it or not, I’m actually halfway through the process of becoming a licensed Uber driver.
I drive a Toyota Prius already and I thought it would be a good way to get a better insight into the lives of occasional drivers and the world of private hire.
Unfortunately, the life of a start-up founder keeps me very busy so I haven’t been able to complete the process just yet – it’s still on the to-do list though!
You worked for Goldman Sachs before embarking on this major career change. Where did you get the idea that a firm offering motor insurance by the mile could be a winner, and was it a tough decision to take such a leap?
As someone working in central London and only driving at the weekend, I’ve long thought that the premiums I pay on my annual car insurance don’t offer value for money.
It’s odd to think that we accept paying for an annual policy that doesn’t take into account how much we actually drive and doesn’t encourage us to take public transport.
There was obviously an element of risk in starting By Miles but I’d spent years specialising in insurance at Goldman Sachs and it was difficult to ignore such a huge market opportunity. Since we launched, I’ve had customers constantly remind me that this product is something drivers in the UK really want and need.
We were recently named ‘Innovation of the Year’ at the Insurance Choice Awards, which was decided by a public vote, so that’s been a particular high point.
Talk to our readers a little more about By Miles. What exactly will it offer its customers, how will it interact with existing firms and platforms within the sector, and what kind of timelines are you operating on?
Our app is a key component and it makes keeping on top of your driving insurance a lot simpler. You can see the cost of every journey, view all your policy documents and get reminders for when your MOT and car tax is due.
You can even set yourself a monthly budget and decide to cycle or take the bus if you think a small trip might put you a bit over your month’s target. It’s about being more transparent and giving the customer more control over their money.
We’ve been authorised by the FCA and completed a three-month beta trial, collecting over 150,000 miles of data to perfect the product. We’re looking to launch in early 2018. We’re aiming to operate as an MGA selling insurance directly to customers.
Does it surprise you that we are almost in 2018 now and there hasn’t really been any systemic disruption of the traditional annual policy, across personal lines insurance? What is it that allows By Miles to be viable today when it may not have been just a couple of years ago?
It certainly is surprising. Insurance hasn’t really kept up with the changes in technology in wider society. We’ve had pay-as-you-go mobile phone contracts for over a decade but still have inflexible annual insurance policies. It doesn’t make much sense.
Over the last few years, I think people have become increasingly open to trying new ways of doing things and quite rightly demand more personalised experiences. We’re just trying to respond to these changing expectations.
Another thing we can’t ignore is our reliance on smartphones now. We’re constantly using them to manage everything from our weekly shop to our home energy bills. It seemed obvious that you should be able to manage your driving insurance policy through a mobile app too – an app that wasn’t just acting as a container for your policy documents.
While the first incarnation of a pay-per-mile policy was attempted in 2006, that was before the invention of the iPhone. The smartphone and telematics technology has moved on a lot since then and we’re able to take advantage of that.
Finally, what would you expect to have achieved with By Miles in three years’ time?
We’ll have solidified our reputation as a highly responsive and customer-centric car insurer by then. We want to provide a reliable, trustworthy service that’s used by lots of satisfied customers that stay with us because they feel they’re getting the best deal for them.
In three years, I hope we’ll be forcing change in the rest of the industry as they look at our growing base of happy, low risk, customers.