The word from insurtech Fruga, who are aiming to allow policyholders the chance to reduce their annual renewal costs;
Manchester-based InsurTech scaleup Fruga has raised £1m to scale its open banking technology and help customers reduce the cost of their annual insurance renewals.
Fruga allows customers to link their bank, credit or debit card to their insurance policy using open banking. When an insurer’s customer spends with selected partners across travel, supermarkets and high street brands, they earn ‘insurance credits’, which build up over time, giving them a discount on renewal – often in excess of £150 – and value throughout the policy lifecycle.
One business already partnering with Fruga is Money Expert, which uses Fruga’s technology to let its customers earn insurance credits every time they spend with partner brands, building a pot of money to cut insurance costs, which remain one of the largest household expenses.
Insurance providers can also embed the technology under their own brand to gather data and build a year-round relationship with their customers. This means they are not limited to checking in at specific points in the year, such as when making a claim or at their renewal.
One example, explains Fruga’s founder and CEO Ross McCarthy, could involve a new family pet. Based on the transactional data available to them, an insurer may see that one of their policyholders is buying pet supplies, which would give them the opportunity to offer pet insurance before the customer starts searching on a comparison site.
The company developed the technology after realising that the insurance market could benefit from a continuous value layer and open banking in the same way as popular consumer banks like Monzo and Revolut have. This allows insurers to pass perks on to consumers and use data to understand their customers better.
Fruga has been bootstrapped to date but is now scaling its ambitions after raising money from NPIF II – PXN Equity Finance, which is managed by PXN Ventures as part of the Northern Powerhouse Investment Fund II (NPIF II). Investment has also come from Haatch, a UK venture capital firm backing ambitious founders with capital and hands-on support.
With two established investors on board, the company now plans to grow its team, with key hires expected in Q1 2027. Fruga also has plans to increase its customer base, having built up a pipeline of prominent household insurers and managing general agents
Ross McCarthy, CEO and founder of Fruga, said:
“Insurers hold some of the biggest customer bases in the country, yet the industry has trained those customers to see their policy as a price and nothing more. Every renewal sends them back to the comparison sites, and the insurer that wins them this year loses them the next. We started Fruga to take customers out of that aggregator cycle and put real value back at the heart of the relationship. Customer value and data insights is what makes that possible.
“With open banking, an insurer can understand its customers better than anyone else: what’s changing in their lives, what they need next, and how to reward them every day, not just at renewal. That turns renewal from a price check into a reason to stay. This investment means we can bring in top talent to build that out, and our ambition is clear: to become the data layer that powers how UK insurers know, serve and keep their customers.”
Joe Ball, senior investment associate at PXN Ventures, said:
“Insurance is a huge market, but the relationship between providers and their customers has remained largely unchanged for years. Most consumers only hear from their insurer when it’s time to renew, and price is often the deciding factor in whether they stay or switch.
“In response, Ross and Asaf have developed a proposition with clear commercial potential, and we’re looking forward to supporting them as they grow their team and bring the technology to more partners across the market.”
Sue Barnard, senior investment manager at British Business Bank, said:
“This investment from the Northern Powerhouse Investment Fund II will support Fruga as it scales its technology and builds on its growth ambitions. Innovative businesses that harness technology to improve products and services have an important role to play in strengthening the digital economy, as well as supporting the UK’s Modern Industrial Strategy to boost productivity and support high-growth businesses across the North. That’s why we’re committed to supporting scaleups across the North through NPIF II, providing the capital to drive forward UK-wide growth.”
Marwa Ebrahim, associate at Haatch, said:
“Customer churn at renewal is a major problem across insurance, yet most existing retention tools do little to create meaningful engagement or actionable customer insight. Fruga tackles both sides of that problem, giving customers a stronger reason to stay while giving insurers a better understanding of their customers. We’re excited to back Ross and Asaf as they scale this across the UK insurance market.”
Liz Hunter, managing director at Money Expert, said:
“Partnering with Fruga is a fantastic step for Money Expert. Their focus on putting money back in people’s pockets on everyday spending is a perfect fit for our customers, and we’re excited to be working together.”
The £660m Northern Powerhouse Investment Fund II (NPIF II) covers the entire North of England and provides loans from £25k to £2m and equity investment up to £5m to help a range of small and medium sized businesses to start up, scale up or stay ahead.
The purpose of the Northern Powerhouse Investment Fund II is to drive sustainable economic growth by supporting innovation and creating local opportunity for new and growing businesses across the North of England. The Northern Powerhouse Investment Fund II will increase the supply and diversity of early-stage finance for the North’s smaller businesses, providing funds to firms that might otherwise not receive investment and help to break down barriers in access to finance.
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