In this week’s profile, we feature Chris Kaye, Co-Founder of Sherpa, who have introduced to the planet the concept of an effortless personalised insurance account. We’re loving that idea!
Our questions are in bold.
Who are you and what’s your background?
Although I was born in the UK, I have lived in over 10 countries, and so consider myself more of a global citizen than nationally affiliated (and therefore am deeply despondent about increasing nationalism, Brexit etc.). My three kids have great difficulty answering the question “where are you from?” – which makes me very proud. Most of my career has been in Asia, and I had the privilege of being a Partner in one of the largest global consulting firms, BCG – where I headed the Asia insurance practice for a number of years. I can communicate in five languages (two dead, three living!) having studied French and Ancient Greek at Cambridge. I improved my French a bit (and wine appreciation a lot) during my MBA at INSEAD.
What is your job title and what are your general responsibilities?
Wow – tough question. My role evolves on a weekly basis as the team around me grows, which is very exciting. I am one of three co-Founders, and broadly we split the activities as follows: As CEO, I am largely the face of the company to all our external stakeholders. Greg, our CFO, handles the considerable fund-raising challenges, talent and marketing. Lachie, our COO, takes care of all product, tech and ops. Last month, I spent about 20% of my time securing our reinsurance partnership, 10% on PR and networking, 30% on investor management (current and new), 10% on distribution partners and 30% on talent (current and new). But that will all change next month, no doubt!
Can you give us an overview of your business?
The concept behind Sherpa is deceptively simple: a single, personalised insurance account that covers each of our members for the risks that matter the most to them. We believe that insurance ‘products’ are the root cause of all the confusion and complexity that a person faces when trying to deal with their insurance. What our members get is an unbiased view on what they should be using insurance for (and what is just a waste of money), a single underwriting process that treats them like a human being rather than a statistic, and the ability to get covered at the click of a button. No more insurance companies. Effortless, personalised insurance.
Making this happen is the deceptively complex bit. We have had to build a unique and patented ‘brain’ that automatically analyses a household’s risks. We have had to come up with a totally new way of underwriting (underwriting a person holistically rather than as a series of products). We have blown up the value chain (cutting about 40% of the cost out). And we have invented a new revenue model that aligns our interests unequivocally with our members’ (no more grubby commissions).
Future potential members love the idea. Investors are becoming persuaded that this will now actually happen. And market commentators are lauding us for our ambition. As Deutsche Bank wrote recently “of the 17 start-ups [we saw], only Sherpa is directly attacking the traditional insurance model”.
Tell us how you are funded.
The co-Founders have dug (deep!) into our own pockets to fund the first 12 months while we were developing and testing the proof of concept. We are on the point of closing our first external money – a seed round from individual angel investors – which will bring total funding close to $2m. We chose to do this primarily through our existing networks. One of the benefits of being a more experienced founding team is that we are lucky enough to have access to some amazing seed investors who have been incredibly generous of their time and experience, as well as money. Our investors are not in the public domain – with one exception: we are very proud to have Mehrdad Piroozram and his Insurtech.vc team on the slate.
Why did you start the company? To solve what problems?
This is sad to admit (even to myself), but I love insurance. As if my 20-year old self ever thought it possible I would write that! I am a strong believer that insurance helps people achieve their dreams, and saves them from their nightmares.
But we have lost our way as an industry. Why is it that our customers hate us? Why do we have the lowest net-promoter-scores of any industry? Why are we consistently voted the most complex and horrible companies to deal with? These questions REALLY bother me. How is it even possible that people have a worse opinion of insurance companies than banks?
So I started to think about what is wrong. What is the cause of this? I came up with a pretty simple answer – the insurance PRODUCT is the problem. The concept of putting a boundary around a risk and manufacturing a product to offset that risk. That makes a ton of sense for the industry. It allows us to contain, manage, and understand risk. And most importantly, price risk. Underwriters and actuaries can get out their pencils and calculators and start measuring and pricing. But the “insurance product” is an incredibly unhelpful construct for the customer. We are unique, messy, ever-changing people. Our risks can’t be divided up and contained in boxes. Particularly if that box is represented by a 45-page policy document. Of which I have 12 (I do work in insurance). That’s 500 pages. Even I haven’t read all of them.
This felt like a problem that was really worth solving!
Who are your target customers? What’s your revenue model?
We are going after people who are dissatisfied with the way insurance works today. They want a smarter, more personalised experience. They want a single point of contact. We are launching in the UK later this year, and are targeting people who are going through specific life events that require them to look at their insurance needs more holistically. These tend to be stressful times in people’s lives when we believe we can take a huge, unattractive and time-consuming problem and make it go away.
Our revenue model is a monthly membership subscription to the Sherpa service. That way, our incentives are completely aligned with our members’ – we don’t get paid to sell you more insurance, we get paid if we prove our worth to you as a member by getting you the right insurance, at great value.
If you had a magic wand, what one thing would you change in the banking and/or FinTech sector?
This is a bit technical, but I would love to see a meta-language develop for insurance contracts that made them instantly machine readable, comparable and passable. This would massively accelerate the development of smart contracts and blockchain in our industry. But it takes the industry as a whole to move together, and this is a huge ask.
What is your message for the larger players in the Finance industry?
Collaborate, collaborate, collaborate. We want to work with you and we need to work with you. But be cognisant of what it is like to be us (i.e. a start-up). We are small, don’t have a lot of resources, and time is incredibly valuable. We work in dog years, not human years! So if you want to work with us, make decisions quickly. A fast “no” is a lot more valuable to us than a slow “maybe”.
What phone are you carrying and why?
Two iPhone 6S. I am an Apple junkie. When I add in the family’s iPhones, iPads, MacBooks, iMacs, iTouches, Shuffles, iPods, I think we account for a large proportion of Apple profits…
Where do you get your industry news from?
A combination of old and new school. For general business insights and news I turn to the FT, Economist, BBC. For insurance specific news, I tend to follow a number of industry influencers on Twitter, Medium, LinkedIn. Daily newsletters from Shefi Ben-Hutta (@ShefiBenHutta) at Coverager (https://coverager.com/) Matthew Matthew Wong (@mlcwong) from CBInsights and Bernard Lunn https://dailyfintech.com/ are also awesome.
Can you list 3 people you rate from the FinTech sector that we should be following on Twitter?
Pascal Bouvier @pascalbouvier – always on point regarding fintech trends and broader influencesRob Moffat @robmoff – champion of fintech and insurtech in the UK
Greg Davies @GregBDavies – brilliant insight into behavioural finance
Can you suggest the name of an Angel Investor or VC that might be interested in being profiled?
Mehrdad Piroozram (https://www.linkedin.com/in/mehrdadpiroozram/) from Insurtech.vc is (https://angel.co/mehrdad-piroozram) one of the most active and networked players in the insurtech space, and we are privileged to have him support Sherpa
What’s the best FinTech product or service you’ve seen recently?
Loving Revolut at the moment!
Finally, let’s talk predictions. What trends do you think are going to define the next few years in the FinTech sector?
For me, it is all about data. How it gets used, managed, protected. How consumers change their relationship with their data, and how FinTech companies can take advantage of the changing relationship and not be caught out by it.
I am also really excited about usage-based finance – the disintegration of financial products into micro, bite-size on-demand and usage based solutions.
And finally, if ‘the next few years’ means 3 years, I am going to stick my neck out and say that AI is not going to live up to its current hype (it’s going to take 5-6 years)!
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