Customers have been witness to various websites that show a comparison between various insurance products. The only reason why people buy from these websites is because of the cost, and there is no customization involved. The need of the hour is a more tailor-made solution, changing the buying point from “strictly cost-based” to “best cover for you.”
This is exactly what UK-based startup Sherpa is planning to go for. The company has secured a seed funding of $2.3 million from InsurTech V.C. and other angel investors.
Sherpa is a platform that is totally AI-driven and helps in developing a personalized risk profile of an individual. This gets constantly updated for members, and they are notified about the risks and costs associated with protecting from these risks. Sherpa has joined hands with Gen Re and eliminated the commission that was going to the insurance companies, giving it back to customers as their savings.
Sherpa is following a model that is similar to Lemonade, a U.S.-based startup that is disrupting the insurance sector in its own innovative ways. The core of Sherpa’s model is to insure people and not products. If we look at the insurance packages, the risks are put in two buckets and sold with minimum customizations. Again, these customizations are found to be more beneficial to the insurer than the customer.
Speaking on their business model, Chris Kaye CEO of Sherpa said that they are eradicating the age-old concept of insurance as a product and finding new and innovative ways to underwrite risk. Kaye says that for traditional insurance companies the customers are just a bunch of policies, but at Sherpa each member is unique, and their risks keep changing as they progress in life.
Mehrdad Piroozram, partner at InsurTech V.C. said, “Sherpa has assembled a fantastic team of industry veterans, tech geeks, mathematicians, data wizards and marketing gurus — it’s the best team we have seen in InsurTech.”
Sherpa will be operating across all the major insurance areas like home, health, life, car, general, device and pets.