The short-term insurance sector in South Africa has been slow to go digital.
However, a Paarl-based digital short-term insurance broker startup is planning to disrupt South Africa’s R115 billion opportunity for the short-term insurance industry.
Ctrl is South Africa’s first independent car and household insurance advice app.
The InsurTech startup is targeting the short-term industry, which will be an R115 billion gross written premium (GWP) opportunity by 2020.
Consulting firm Accenture believes that this GWP opportunity is within reach for South Africa’s short-term insurance providers if they harness the power of digital technologies to re-conceptualise their business models around the customer and create unique customer experiences.
Accenture believes that the R115.2 billion GWP opportunity is within reach for South Africa’s short-term insurance providers if they digitise their systems and apply essential
strategies to address customer concerns and re-energise customer relationships.
But getting a car and household insurance quotes is still cumbersome and time-consuming in South Africa. Also comparing quotes is nearly impossible, especially given a large amount of paperwork involved.
Ctrl, an InsurTech startup, says clients want to communicate with their advisor or broker on their terms, which is in a text message format, and one should allow for that.
“These were the pain points we discovered in our research and tried to solve when we built the app,” Pieter Erasmus, co-founder of Ctrl, told TechFinancials.
As an InsurTech startup, Ctrl to disrupt the industry and deal with these pain points has written an algorithm that enables its app to compare quotes from different insurers and rate them accordingly – based on the clients’ financial needs analysis (FNA) that is also done directly in the app.
“We have a semi-intelligent chatbot you can chat to for basic queries and real people to answer more complex questions,” explains Erasmus. “We’ll be looking at more AI (artificial intelligence) in the future.”
The app is still in a testing phase.
As part of the beta users, Erasmus says the startup has, however, launched an early registration process on its website and in a short period of time “we have signed-up more than 400 early registered members”.
“We will, of course, give them the first opportunity to download the app when we are live.”
The company was named as the Winner for the Best Financial Solution at the 2018 MTN Business App of the Year award.
Winning the MTN Business App of the Year award for the best financial solution serves as early validation given that we went through a rigorous process with a large panel of judges, says Erasmus.
“We definitely saw more interest, from the public, as well as possible investors wanting to know more about us. We’ve had more traffic to our website which resulted in more early registration sign-ups. We are very grateful to have been awarded the prize, especially in this category where we came up against some big names such as Absa and FNB.”
Furthermore, last month South African venture capital firm Knife Capital announced Ctrl as one of the top twelve companies participating in its fourth Grindstone Accelerator programme. Grindstone engineers growth for South African innovation-driven entrepreneurs by shaping their companies to become more investable, sustainable and exit-ready.
Some of South Africa’s best scale-up companies have been through Grindstone with measurable results. These include ticketing solutions provider Quicket, financial inclusion business Picsa; augmented reality animation & gaming company SeaMonster; payments software provider Electrum, transport data company WhereIsMyTransport, Bitcoin blockchain anti-piracy solution Custos and radar startup iKubu (acquired by Garmin).
Ctrl, which employs eight people, was founded in 2017 by Erasmus, Francois Venter, and Pieter Venter to create something that would make a difference in people’s lives.
The Paarl-based startup is finding it difficult to get the right skills and people willing to travel to the small town in the Western Cape.
The company, which is based in the largest town in the Cape Winelands, has been self-funded up to now. Along the way has been privileged to have had one or two angel investors.
Erasmus says the InsurTech startup is currently looking for expansion capital.
“We are very excited about our business prospects especially our future plans. It is therefore inevitable that we would need further funding in order to capitalise our future roadmap.”
The startup is working with several insurers including Brolink. Santam, Old Mutual Insure, Bryte, Kind Price Insurance and MomentumShort-term Insurance.
Asked what differentiates Ctrl from other InsurTech players, Erasmus says that the startup is an advisor (broker) and not an insurer.
“This means that we offer you products from different trusted insurers and since we are independent we allow clients a choice. We give you real quotes and not just rates like some aggregators do and we stay with you as your advisor once you accepted a quote,” he explains.
“So you don’t have to wait for someone to call you to discuss your risk and needs, you can just click and accept straight away if you like what you see.”
There is a rise in digital insurers globally and this is definitely the way insurance will be done in the foreseeable future. Insurers are excited about the ease of doing business, as well as a reduction in the cost of distribution that digital platforms offer.
“This is especially true for low-income products as well as new products that they want to roll out,” explains Erasmus.
“Another advantage of being digital and independent is that we will eventually also be able to offer more flexible, bespoke products that are more time-flexible, adjustable and modular to accommodate life stages and other personal circumstances.”
How does Ctrl app work?
- After you download the app (Apple or Android) and register, you will be required to complete some underwriting questions pertaining to the assets you want to insure.
- The back-end will request quotes from different insurers and while you wait for these quotes, you will be required to do a financial needs analysis to better understand which product and insurer we should recommend.
- It then gives you the quotes and helps you compare them by assigning a score to each quote based on the value that each quote represent and how closely each quote matches your needs.
- The “Ctrl rating and recommendation” therefore means that you can make an informed decision.
- You accept a quote and it is immediately binding, with immediate cover.
- The app then summarise all your assets and policies (your policy schedule) in the MY COVER section of the app, so you can see exactly what’s covered and what not.
- Plus, Ctrl remind you of the not so obvious things that may invalidate your cover.
- In addition, Ctrl has a CLAIMS and ASSIST feature in the app that allows you to call for help depending on the need; all happening via the app.
- Last, the app has a CHAT feature which at any time allows a client, or Ctrl as the advisor, to chat (text) with the client.