Brolly, a U.K. ‘insurtech’ #startup that offers an app to help you manage and purchase various insurance products, has raised £1 million in seed funding. Valar Ventures, the U.S.-based venture fund backed by Peter Thiel, led the round, with Pi Labs co-leading. Entrepreneur First (EF) also participated via the company builder’s £40 million “Next Stage Fund”.
Founded by former Aviva underwriter and product manager Phoebe Hugh and former Skype and Microsoft engineering manager Mykhailo Loginov, after the two met at EF, Brolly is billed as a personal insurance concierge. The AI-driven app lets you enter all of your existing insurance policies and then analyses any gaps or duplication in cover, and, when required, claims to automatically shop around the market on your behalf so you don’t need to keep going back to price comparison sites.
Hugh — who, perhaps brutally, put herself through Entrepreneur First twice as she sought to pair up with the right co-founder — says she was inspired to start Brolly after she became alarmed to hear how many consumers lacked basic knowledge of insurance. This included not only how the insurance products they had bought worked, but in shopping around for better value deals and managing existing policies effectively.
“One woman I spoke to had inadvertently purchased two car insurance policies when she obviously only needed one (you can’t claim twice on general insurance),” recalls Hugh. “She had paid in excess of £10,000 cumulatively over 11 years for two policies where one should’ve been void, because there was no system in place that notified she was doubling up on cover”.
Aware of no other businesses in insurance at the time that seemed to be tackling the problem, and convinced from her experience in the industry that insurance companies would be slow to change, Hugh says she taught herself coding and undertook a hackathon where she built an early iteration of what would later be known as Brolly. “I was really compelled to leave and set up a venture that directly challenged these issues,” she says. “I handed in my resignation on New Years Day 2015 to pursue building a fairer insurance market for people”.
Fast-forward to 2017, and the Brolly app has three strands: “Brolly Locker” (scanning and secure management of all existing policies), “Brolly Adviser’ (advising which products customers should consider buying and why based on analysis of existing portfolio), and the yet-to-launch ‘Brolly Shop’ (analyses the current market to ensure the customer has the best product coverage and value for money and will let you switch to other providers if necessary).
“Insurance companies and brokers predominantly acquire customers through price comparison sites, a loss-leading channel, fighting on price to get the customer through the door,” adds Hugh. “Then they hike up the price at renewal for loyal customers, capitalising on people’s inertia. This is an immensely complex and established cycle to break, and that’s the challenge we’ve taken on”.
Typical early Brolly users are people that already have multiple insurance products and are used to the process of shopping around, but “usually don’t find the time to get around to it at renewal”. These sees premiums increasing, and their cover becoming less relevant as circumstances change over time. “Convenience is really important, automating the process of shopping around,” says the Brolly founder.
In addition to VCs, a number of angel investors also joined Brolly’s seed round. They include Alan Morgan (Chairman of MMC Ventures & AdFisco), Christian Angermayer (founder of Apeiron Investment Group), Matt Bellamy (lead singer of Muse), Richard Fearn (Director of Friday Club), Tim Levene (Managing Partner of Augmentum Capital), Tim Hugh (Principal cellist of the London Symphony Orchestra), Bruce Macfarlane (Managing Partner of MMC Ventures), Michael Mire (Non-Executive Director of Aviva), and Christian Woolfenden (Managing Director of PhotoBox).