Tomer Kashi is Co-Founder and CEO at VOOM, an insurtech pioneer, crafting cutting-edge, usage-based insurance solutions for the future of mobility. Tomer was interviewed by Andrew Daniels, Co-Founder and President at CrashBay and Founder and Managing Director at InsurTech Ohio.
Tomer, where do you see opportunities for new products in the insurance industry?
“While a lot of neo-carriers are focused on auto or home, we think the larger opportunity is actually in ‘niches’. I would like to think about the problem from the traditional care perspective. Innovation in insurance is quite hard, and product innovation is the toughest because it's very interdisciplinary. You need actuaries, IT, sales, marketing and compliance. From a carrier perspective, if you do it, then it makes more sense to do it in bigger markets like auto or home insurance, and many times they just don't get to the niche markets. The niche markets are overlooked, the customer is underserved.
By going into niche or specialty markets, neo carriers can provide meaningful innovation for the customer. They go beyond the User Experience (UX) to the risk itself by asking what data do we use in order to more fairly rate the risk for the benefit of customers?
The main three benefits in going niche for startups is one, the opportunity to provide meaningful innovation for the customer beyond UX. The second one is less competition because you are the only one that’s providing meaningful innovation in this segment. Third, these markets are still big - everything in insurance is big. Some segments could be hundreds of millions, some of them could be billions of dollars, but these are still big markets.”
From a startup perspective, are these markets big enough to attack? Can you build a good business around these niches?
“Some of these markets are not big enough, so you can create a good business and cater to customers. They're not big enough from a VC-backed startup perspective; however, what could happen is once you build the infrastructure for creating a product in a specific area, you can leverage on the same core technology and know-how to create a new interface that’s like a new product.
We built a core competency around mobility, and we know how to ensure new mobility platforms to leverage the fact that mobility platforms are more connected to be agile enough in order to cover not only personal cars but also car share and other types of utilization. Then we take the basic VOOM core and apply it to more and more niche markets. On an aggregate, it's actually a market that could be bigger than many other markets that are considered big.”
How do you approach marketing in a niche space and how has that helped you?
“Marketing niche products is actually very different from marketing more traditional products. For example, if you go to small brokers, they don't have enough volume of a specific niche product. It doesn't make sense to train them on something if they see an application once every few months. A lot of comparison sites and other things do not necessarily work in niche products. However, there are other things that work really well in many niche segments. The customers are also enthusiasts of the segment. Think about commercial drone pilots, motorcycle riders or rideshare drivers. Some of them could be enthusiastic about what they do, but for some it defines them.
Some of them are following specific influencers. There’s a lot of word of mouth between them. Everybody is saying, ‘My insurance rates went up, what do I do and how do I make a living? What tips do you have?’ This is something that really works in our favor as long as you have a good product, and this is something that you usually don't see in car insurance.”
How do you view carriers as partners? Any learnings you can share with our readers?
“We seek two strategic manners in partners. One of them is carriers as capacity providers, and they bear the risk on the insurance projects. In this case, we usually work with selected partners. We don't need more than one per product. This is something that each and every new product we are finding the care partner is most relevant either from a capacity perspective or know-how perspective. We work with them, but then we also see carrier partners as distribution partners. In many cases, there are a lot of carriers that don't have an appetite for a specific risk that we do. It could be drones, aircraft, motorcycles or even rideshare drivers. Many carriers have customers coming their way, but they don't want this specific risk. By partnering with us, they can still cater to the customer without risking the customer moving to us in another core business. We won't go to a partner and remarket our home or personal car insurance. We focus on the niche; this is all we do.”
What do you see as still missing in the industry?
“There are many things, but I will focus on two. First, there’s no concept of MVP. It’s hard to try things out. In order to sell the first dollar in insurance, you need a capacity provider fronting company to do the filing and an end-to-end process. It takes a lot of time to trial. As an industry, potentially starting from the regulator, there could be some framework that allows for trials of new insurance products on a small scale. At the end of the day, it's for the benefit of the customer. If it'll be easier for companies to create an insurance product and test the waters before doing it on a big scale, it will promote innovation. On a side note, the UK market is quite innovative, and the use market is behind the UK market in this aspect.
The other thing that we don’t see enough of is increasing automation in the insurance world. There are still a lot of manual processes in every aspect from customer service to underwriting to binding. There are a lot of opportunities to improve, and that's for the benefit of the customer. As Jensen Huang, Nvidia’s CEO said, ‘Either you’re running for food, or you’re running from being food.’ So, I urge players in the market to be as fast as possible in adopting these technologies.”
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