Blog: Cuvva-ing all the bases with statistics

The recent £15m funding raise by Cuvva is another reason to praise the company.

As one insurtech expert – who knows far more about all this than I do – put it, getting Series A round through is no mean feat.

The expert also touted the backing of Dominic Burke, now Marsh-JLT Specialty chairman and Lloyd’s chairman Bruce Carnegie-Brown as being noteworthy.

In 2015 Cuvva staked a claim to sell the first hourly motor insurance policy.

Since then it has sold more than 40 million hours of insurance and has over 250,000 customers and built an 80-strong team. According to the firm, it has the UK’s most downloaded insurance app.

The app goes beyond the transactional to build a relationship between provider and customers. It includes features such as MOT reminders, tax reminders and advice on where to buy the cheapest petrol.

The company has plans for the future. A pay monthly motor product in 2020 and doubling in size within the next 18 months as it uses venture capital backing to target the long-term motor insurance business.

Founder Freddy Macnamara makes a good point when he talks about the way people buy goods and services via flexible subscriptions to suit on-demand lifestyles.

“Why shouldn’t you be able to do that for insurance?” he asks.

Which is what makes its emphasis on selling “3% of all UK motor insurance policies” somewhat bizarre.

I wonder what was trying to be achieved through its publication.

When asked about this metric the business told me that according to Motor Insurers’ Bureau stats, Cuvva sold 3.23% of all UK motor insurance policies in September.

The trouble is what this statistic could imply.

Surely the figure really should be labelled as transactions rather than policies?

If an insurance company sells 365 one day policies is it bigger and does it have more of the market than one that sells one yearly policy?

And if another company sells 8760 hourly policies in a year is it even bigger and more market dominant?

Mulsanne is one of the carriers behind Cuvva. During the year ended 31 December 2018, Mulsanne wrote £33.3m of business after co-insurance.

The ABI’s key facts document from December 2018 said there were 20.1m households with motor insurance policies.

The AA’s car insurance premium survey for Q4 2018 put the average cost of annual comprehensive policy at a little over £600.

A back of the envelope calculation suggests therefore £12bn in premium.

Or, if you prefer the ABI’s general insurance overview stats, then in 2018 UK net written premiums in motor were £10.1bn of which £7.5bn came from the domestic market.

Unfortunately, Cuvva declined to comment when asked for metrics via either of these routes.

For households, 3.2% would be 643,200.

For premium the range is £240m to £386m depending on which of the above is used as the base.

The insurtech has succeeded in the steps it needed to take since it was founded in 2014 and has scooped up awards, not least of which for Insurance Start-up in our very own British Insurance Awards in 2017.

But it does insist on labelling itself as a “disruptor” that is taking on the “insurance establishment”.

It is fair then to pose the question of just where the pay-as-you-go ‘insurer’ sits in the market.

The stats ultimately are the stats.

As Macnamara said, “we’ve got so much further to go”.