Motor managing general agent Hedgehog aims to reach £20m in gross written premium in its first year of operations, following its launch in Q4.
The start-up, which will be an aggregator-driven business targeting high risk drivers, is backed by capacity from Berkshire Hathaway.
CEO Pete Storey said the business was looking at 50,000 policies sold in its first year, or GWP of £20m. By the end of its second year, the company aims to hit close to £40m in GWP.
“This is no made-up, pie in the sky target,” said Storey. “But is based on cold hard data analysis and is supported by our capacity provider.”
The business is owned by Storey and partner Ben Gower, who together founded Australian MGA 1Cover.
Hedgehog is backed by “deep pockets” of the pair, Storey said, rather than venture capital or private equity funds.
The company is targeting drivers in the 21 to mid-40s age range that face higher than average premiums for reasons such as holding points on their licence, a driving conviction, or being blacklisted by certain insurers because of their postcode.
The company will use proprietary data analytics technology and artifical intelligence to be able to better price risk.
“We can have a real-time holistic view of customers,” Storey told Post. “At the point of quote we can ascertain whether the customer is suitable for us, and we can give them a better marginally better price than the rest of the market.
“We are not saying we can halve the premiums, but we think we can be competitive. We have got some slightly cleverer tools than pretty much everyone else in the market.”
He said the company wouldn’t stoop to using dual-pricing in order to drive volume.
“We won’t be running dual pricing, giving new customers better prices than existing ones,” he said. “We won’t be undercutting at renewal. We have got the technology in place to be able to stand by that.”
Hedgehog will launch exclusively through price comparison website Confused initially, with the potential for other aggregator partnerships at a later date.
- Analysis: The mystery of the missing Insurance Fraud Taskforce report
- Green light for UK-US insurance trade deal
- Roundtable: Is a single customer view taking off in insurance?
- Travel insurtech Pluto begins beta test
- O’Connor replaces Fairchild at the helm of Broker Network
- Majority of customers support a ban on dual pricing
- Blog: What workplace inequality means for insurers