Laka, formerly Insure a Thing, is challenging the conventional insurance model by offering a truly disruptive bike insurance product, co-built and financially backed by Zurich.
This really is cycle insurance with a difference, because Laka will only earn fees when settling claims. That’s right, no upfront payments or premiums are paid by the cycling consumer, instead, at the end of each month claims are settled as part of a group risk pool (a bike club for example) plus a fee. The payment will change each month but will be capped at the price of a traditional insurance policy, therefore, if claims performance is better than expected in one month everyone will share in that improvement.
Due to this innovative method of pooled payment calculation, consumers are also nudged towards behaving in such a way as to reduce the number of claims, which are simply reported on a smartphone and paid with no excess. Imagine you’re a regular two-wheeled commuter in London and you only want the riders who use lights, locks, hi-viz and obey traffic lights in your insured `pack’ of fellow policyholders. That’s Laka in a nutshell.
Co-founder of Laka, Jens Hartwig comments: “While this tried and tested insurance model obviously works, we think there’s an alternative way which can benefit careful consumers – a way which shares with them the pricing and claims decision-making. We’re starting with high-value bike cover but as our model proves successful we look to explore other products in the pipeline.”
David White, Head of Retail Management at Zurich concludes: “Innovation is an often over-used word but Laka is one of very few InsurTechs doing something genuinely exciting and disruptive. We look forward to working with Laka in the future as they expand their proposition further.”
Can this group responsibility concept work in the booming cycle insurance sector? Post a comment below.
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