Cavere Intermediary, officially launched in January. Part of the Cavere Group, it’s growing rapidly, with a raft of new and innovative products and services, most recently a bespoke scheme with Age Partnership. Insurance Edge caught up Paul Thompson, Cavere’s Founder, to find out more.
IE: Tell us a bit more about the Age Partnership deal, do you think as we live longer the industry needs to make travel cover affordable for older people?
PT: The Age Partnership deal is quite an interesting fit. They specialise in equity release, so that in turn means that many older people suddenly have money to fund more holidays. The Cavere scheme came about as a result of direct feedback from Age Partnership; their customers wanted more choice beyond the industry standard cut-off at age 65 for travel insurance, plus cover for longer stays outside the UK. Lots of people want to spend winter away from the UK, so that means they require cover of say 90 days, rather than the usual 30 days. This is what we specialise in, thanks to strong relationships with insurers and a technology driven model we can be creative and deliver solutions that are new and responsive to the changing needs of customers.
IE: So can data analytics software really fine tune the general insurance market, or is it more a case of simply responding rapidly to changes in the market?
PT: Speed matters, but so too does deeper understanding and a responsive approach to meeting customer needs. We can build our products from the basic idea stage to launch in a matter of days, using our own software. We don’t use software houses because it can sometimes mean that agility is lost and you might wait a few weeks for changes to policy wording etc. I think what Cavere strive for is full integration of client feedback and fine-tuning our products by using our own technology to offer total control to the customer.
IE: The home contents insurance market is ready for a major change as fewer people buy houses and rent for most of their lives, how can insurtech help us offer a more diverse set of contents policies?
PT: There’s an inevitable shift in the contents market, and as the UK rental sector is generally under-insured I’d say there’s a big opportunity out there. Renters don’t necessarily see home ownership as the best way to protect their assets, and letting agents aren’t authorised to sell insurance, so there are some challenges ahead. Perhaps the best approach is through online marketing; especially to older renters who may be renting larger homes, and therefore have more contents to insure.
IE: Is there anything you can tell us about Cavere’s expansion plans for 2019?
PT: Since we’ve launched it’s been about building relationships, word of mouth marketing and initiatives like the Age Partnership deal. This year we have just recruited our first Business Development Manager to help us build stronger relationships with brokers and intermediaries. But the real key to our growth will be clarity of vision, a nimble and responsive environment, and a focus on continuous innovation. Technology innovation is as much a core of the business as insurance provision. Cavere is a disruptor, embracing the latest advances in technology to assist brokers and intermediaries to realise the vast potential offered by GI. The strength of our differentiated proposition will be what defines our growth over the coming year and beyond.
IE: Winter 2018/19 was fairly quiet in terms of flooding in the UK, but looking ahead how do you see the residential flood insurance market changing?
PT: The interesting thing about residential flood insurance is that cover is getting cheaper after Flood Re. But this fact of life doesn’t seem to be widely known and perhaps a benign winter has put flooding out of mind for many home owners. We were the second company to launch a Flood Re scheme, and it could be that many people still think this insurance is too good to be true?
In the long run the market will probably become less fragmented, more standardised, because in reality flood insurance is no longer a non-standard risk, it can and should be written as standard with Flood Re in the background. Hopefully in time there will be a consensus amongst insurers or perhaps even a standard flood risk database, but until then brokers and intermediaries must work with a GI provider with the experience and insurer relationships to respond to the needs of customers in flood risk areas.
IE: Regardless of whether the UK actually leaves the EU, do you think insurance is bound to become a more global industry in terms of blockchain backed capital and underwriting, tech-driven marketing and automated claims servicing?
PT: Brexit is interesting as it throws up some short term challenges and possible disruption. But insurance is already a virtual, global product. Most insurers can write the paper in whatever market they like, so whether it’s the EU zone or the UK with slightly different rules, it really makes little difference. The only thing I’d say is that the industry needs to be quick to adapt to any changes, whatever the politicians decide.
IE: Some motor insurers have attracted criticism in the media for not rewarding loyalty, how can the industry utilise the ever increasing stream of data from our personal lives to customise cover, so that people feel their true circumstances are being taken into account?
PT: Is the loyalty penalty being driven by a lack of data? Probably not, it’s more about offering cheaper, subsidised deals to attract new customers. So it’s that business model which needs to change. If the regulator takes action then many insurers will possibly be secretly glad that the market is less about the initial offer, and more about flexible pricing and long term relationships between customers and insurers or brokers.
When you look at the data what you see is that customers don’t always enjoy shopping around and switching every year for the best deal on motor or home insurance. At Cavere we really work hard to make customers feel valued, and that they have the right product first time, and so we’re pleased that we have a 92% renewal rate. Much of this is down to giving brokers and customers plenty of information via regular updates, and engaging brokers throughout the year. In the end insurance is a journey for many consumers and the way you respond to changes in their lives often really helps renewals and builds brand loyalty.
IE: A 92% customer retention ratio is a stat that’s worth repeating, especially in an increasingly online insurance market. Paul, thank you for your time.
This Insurance Edge feature is sponsored in association with Cavere Group