KASKO has built an end-to-end insurance platform where insurers can design, run and continuously optimise insurance products within their own or third-party channels. These can be run totally side-by-side or later integrated into the insurer legacy system.
KASKO’s platform is designed as flexible micro-services than can be quickly set up, upgraded and replaced without having to change the entire platform. This, in turn, minimises the cost of creating new products (e.g. data, services, user interfaces) thus enabling innovative trial and error.
What is your USP? How do you create value for customers?
We enable our customers, namely product and digital transformation managers in insurance companies to cost-effectively creating new services without having to re-prioritise their internal IT. We are faster (3-4 weeks vs. 6-24 months), cheaper (€30k vs 250k) and more flexible (changes can be done within hours/days instead of months).
Product managers struggle to meet evolving customer demand (convenient, transparent, always-on etc.) as the existing IT tools are inflexible and expensive to use. Therefore, hurdle rates for any new product are very high, making it difficult to bring new services to market and subsequently changing that. KASKO delivers a flexible infrastructure for insurers to validate new products quickly and subsequently scale them on our platform.
It is estimated that insurance businesses spend 20% of their IT budget on business technological transformation, which by 2020 will equate to approx. €12.7BN in Europe and €36.2BN globally.
What is your revenue model and recent milestones? How does it scale?
In 2017 we earned £600k revenue with a pre-tax profit of £100k. As of 03/18 we have already achieved 40% of required target revenue of £1200k. Our revenue model scales through a mix of recurring licenses and one-off setup and platform expansion fees (2017 average of 22 products was €9k setup and €21k recurring license fees per insurance product). Once these have have stabilized and our production costs of insurance products have gone >€5k production costs we will look at more success-based revenues as a % of premium written and/or transactions sold.
What are the competitors? How do you differentiate?
KASKO's main competitors can be categories as These are 1. Large on premise enterprise solutions like Guidewire, 2. Established cloud-based insurance platforms like Acturis and 3. Insurtechs offering Insurance as a Service like Instanda (and KASKO). Each vendor fulfils the various aspects of the insurance value chain to different degrees but most offer the basic functionality to create and run new products and manage customers (e.g. quote engine, underwriting engine, policy issuance, contract management, payments, claims). The main difference is the problem statement that they are trying to solve. All of them focus inwards on better managing and automating existing internal processes of an insurer (i.e. "insurance factory"). KASKO, however, focuses outward seeing most value in creating an "open & connected" insurance platform that can easily reach end-consumer across digital touch points (e.g. open banking, e-commerce, IoT) and flexibly upgrade services using best-in-class third-party solutions and data sources. Therefore, KASKO's competitive advantage lies in the open and modular architecture setup to facilitate these connections and respond to changing end-consumer demand.
Where we shine is our speed, flexibility, openness and value-for-money. We are faster, more flexible, more open and also cheaper than other InsurTechs, software vendors or IT-consultancies.
1) Speed: The normal go-to-market for new insurance products take 6-24 months, ours takes 2-4 weeks.
2) Flexibility: This has two facets.
- Instead of trying to create one central product system and logic we have created a loose framework of microservices that allows us to create tailored insurance products. Where others talk about having dozens of insurance engines we are talking about hundreds or thousands.
- Most other providers try to either replace the front-end or the back-end or not provide a front-end etc. We appreciated that each situation is different. Whilst we will never try to replace the back-end policy system our value chain is organised in micro-services so that the insurer can choose on a case by case basis which of our core functions (front-end, quote, bind, issue, pay, manage etc.) is required.
3) Openness: Our open platform allows us to integrate any third party service, thus ensuring that we can always deliver best-in-class services.
4) Value-for-money: Depending on product complexity a new insurance product with similar functionality costs between £300-1m to implement. Our products costs between 10-50k£ p.a.
In detail, what are your company’s 3 biggest scaling challenges?
2) Hiring and finding talent that fit company culture: We have a very unique company culture where every employee is an option holder and most even actively invested both capital and salary. We believe in raising salaries only from revenue and using investment to expand the team and extend run-rate. This means that those who join are really dedicated but also makes it more difficult to hire as we scale.
3) Operations: As we scale, we need to implement enterprise level support and operations structures whilst not creating unnecessary overhead.