It has been said that 99% of all insurtech is seeing a problem and then developing a solution. Well, that’s what INZMO are all about, having started their journey by seeing the problem of stolen bikes and setting up an online register. IE mag chatted with Meeri Rebane and Risto Klausen, who founded the company just a few years ago, to find out more.
It’s been an exciting start to 2021 for INZMO, as the Berlin headquartered insurtech closed a €3.1 million seed round led by Change Ventures in January. Swiss Insurance giant Helvetia also participated and has increased its investment. The round brings the total amount raised by the company to €5.2 million.
So, what makes this company interesting? The short answer is that they have developed an affordable solution for tenants who want to rent in Germany, where rental deposits can cost over £2000. But there’s more, INZMO are offering landlords and tenants a truly automated product, plus B2B2C versions so that letting agents or property management companies can offer this insurance solution at the point of tenant application.
Just think about how many applications fail when it comes to finding deposits, or passing credit checks generally, and then factor in how rapidly the rental sector vs ownership dynamic is changing in European cities from Dublin to Dubrovnik. This type of thinking is the future – and we love futurism at IE magazine.
IE; You started out with a simple idea; a stolen bike register, so how did insurance grow from that online space?
RK; A few years ago we noticed that quite a lot of bicycles were being stolen so we wanted to do something that made it easy for owners to report their missing bike. We had a good response and wanted to monetise the website so a logical step was offering bicycle insurance.
When we set up a partnership with an insurance brand, we could see this was a wider problem than just bikes being stolen. There wasn’t a way of easily notifying your insurer with regards to the frame number, colour, accessories fitted and more. So what we wanted to do was build something that was better than the products out there. That really led us down the road of becoming an insurance agent, since we had a clear idea of what the product would cover, how easy it would be to interact with and how much of the back office activity could be automated as well, to help keep costs down.
IE; Everyone in the industry is looking at ways to manage claims better using tech, what’s been the INZMO experience?
Our big breakthrough was enabling policyholders to upload photos via smartphone apps. So, then you have a record of what a bike looked like before an incident, plus if something is damaged, whether it’s a bicycle or something within a home, then you can get an idea on the replacement cost, or repairs, within a few hours.
What this does is use tech to solve the problem of slow, complex claims processing. On top of that I would say that AI and machine learning is super interesting right now because it allows insurers to recognise an individual’s belongings by image matching, or analysing a video clip perhaps.
One of the most exciting developments is seeing insurtechs and insurance agents using data better, smarter – that’s definitely the way forward.
IE; How did you spot the demand for a tenant deposit insurance scheme?
MR; This was really because I moved to Germany a few years back and had to find three months’ rent as a minimum for a deposit. It’s common practice for tenants to be asked for around 2500 euros in Berlin, which is a great deal of money when you have the expense of relocating on top. There are 50+ billions of euros tied up in deposits across Germany, which has a very high ratio of renters vs property owners.
When you think about it, much of that money is doing nothing, just sitting there, whereas it could be invested in something more useful.
IE; Sure, this is a handy cash reserve for Angela Merkel perhaps, but for letting agents and landlords it can be a big problem because without deposit insurance the rental agreement often falls through.
MR; It can cause problems and this is what we wanted to solve. The scheme only costs the tenant a relatively small sum per month as a premium, but it allows the landlord to let the property out quickly. The one thing we identified quickly when building the product was that this type of rental deposit guarantee service, although it existed, was not well publicised, not well known at all.
We designed it to be sold B2B2C, because that way you have property management companies doing the marketing for you, they also have an interest in making this work for both parties. There are many landlords in Germany who own say 1000+ properties, so handling all those deposits is a time-consuming, and highly regulated, task. In this way the problem is solved without large sums of money being transferred too.
IE; What if there’s a dispute when the tenancy ends, how does that get resolved?
MR; The tenant and landlord can use photos to verify that the property is being handed back in the same condition as it was rented. It’s easy and then once everything is checked then the policy stops. Both parties can use the INZMO app, they don’t have to spend time dealing with the actual underwriters, so again, that solves a stack of problems.
IE; How do you see the future for INZMO after your funding round?
MR; Post-pandemic, the customer expects more from digital insurance brands. There is a great opportunity for insurers and agents to build better products that meet these
expectations. Everyone wants better experiences online, that’s the standard we are all aiming for now. We are also looking at offering to insure the actual moving process, plus a contents gadget insurance product to meet the lifestyle of the 21st century. People want their belongings insured, even if they rent, because it can cost so much to replace a range of gadgets that may be partly used for work, sometimes for leisure. Either way it’s necessary to have them.
RK; I think what people want in the future is insurance on demand, one that is much more flexible, and just there in the background when you need it. We have to build products that are easy to start, modify and cancel, depending on how people view what’s important in their life at any given time.
Every brand is going to have to solve a great deal of the existing problems across the insurance market, but there’s no doubt that tech can help us do it. Exciting times ahead.
IE; Indeed, good luck for the future.