In his 38th year in the motor insurance market, former Insure the Box CEO Mike Brockman has global plans for his “revolutionary” telematics and dashcam device. He met Post to reveal how Thingco’s ‘Theo’ works and how he’s determined to bring telematics to a wider audience when he launches in the UK by Q1 2019.
Brockman began his Thingco venture earlier this year, after selling his remaining stake in Insure the Box to its main shareholder Aioi Nissay Dowa Insurance Europe. Since then, he has forged a partnership with Chinese insurer TK.CN, which has in excess of 200 million customers.
But while he is going the business to business route in China, Brockman has felt the need to take a different angle in the UK. Instead, he will go straight to the consumer when the product launches in either December or January. This is partly because of insurer inertia. Insurance companies have struggled to expand the reach of telematics past young drivers, he explained.
“A lot of people struggle to get the business model to work. It is very difficult and of course I’ve made the conclusion in my own mind with Insure the Box that you need something different in order to move the business out of young drivers, and therefore from an Insure the Box point of view it reached its maximum in terms of target market unless something changed,” he said.
“As far as I was concerned I had the solution for that change, but insurers found it difficult to get their heads around it and have been tainted by experiences of trying in the past. They seemed to be reluctant to try something new and different. So I quickly changed our model to my ultimate plan which was always going to be there, which was to develop a consumer model.”
The device itself, named ‘Theo’ by Brockman and team, uses Amazon Alexa technology.
The technology enables it to warn drivers when, for example, they are coming up to a risky blackspot. The voice technology is hands free and can also be used for first notification of loss.
Like a traditional telematics box, it will track driver data – over 1000 pieces of information per second, according to Brockman – and also has dashcam and assisted driver assistance systems functionality.
It is expected to retail at the price of a premium dashcam and he has struck up a deal to distribute them through Amazon, but Brockman’s company doesn’t expect to make money on the device itself. Instead, it will charge a monthly subscription fee for the service and additional benefits.
Brockman has high hopes that he can generate three times the worth of the fee for a customer and take the “Big Brother” out of data.
“From a consumer point of view, this produces 1000 pieces of information a second. So for the price of a dashcam and a small monthly fee, we are going to say to this consumer: this is your data. We are going to make this data work for you and nobody else. Not these horrible, let’s say, insurers, or motor manufacturers, or businesses that might use that data against you. This is yours and we are going to help you get the best value from it. We are going to be the consumer champion.”
In addition to driver behaviour score apps, Brockman is confident that added value and safety can be created through gamification and well-timed vouchers. Thingco is in talks with a coffee chain and a pizza shop to provide discounts.
“We are going to have a lot of fun with games and gamification. We are going to play Pokémon with your car. We are going to create hidden locations with prizes all around the country and if you randomly drive over them, you might win a prize. But you can only win a prize if you drive well and get a good score. Because ultimately we want you to be a safe driver.
“There’s a double thing here. You are making it interesting for the consumer, but you want to create value from the data for the consumer, and therefore the insurance industry is one way of monetising it for the consumer.”
“We can also do things like if they tick the right box, which is their choice, there are rewards and incentives for good driving. Let’s say you’ve been driving for two hours. It’ll say in-voice: ‘it’s time to take a break, we’ve arranged a free cup of coffee at the next coffee outlet’. We are using the data to give valuable rewards to consumers. We are therefore hoping that our target market is everyone.”
Brockman has struck up partnerships to keep his team at a lean 10. However, while an early assumption might be that the regulatory burden is much lower now that he is away from an insurer, he is convinced this is not the case. Rather, his ambitions to be involved in the accident management process mean he is just as involved as ever.
He said: “The logistics of this are harder than an insurance company. All of the services I am building are all the services an intermediary or insurer would do. All the accident management, the access to insurers, all the apps and retail model. Because we are a retailer as well, but insurance services behind the scenes. All the technical aspects of analysing big data, auditing driving scores, crash algorithms, so there’s a very technical side as well as the consumer front end side, but also getting the infrastructure.
“We are hoping to get regulated for accident management, which we need to manage that accident situation. One of the things for launch is I need to get that over the line, otherwise I will be in trouble with the regulator. On the intermediary side, because we are providing access to insurance, we also started the process of getting our intermediary license from the Financial Conduct Authority.
“I think I’ll be one of the last applicants on claims management with the Ministry of Justice, because that’s moving to the FCA early next year. You have to get all this together,” he added.
“It’s an interesting business model. Because this is our consumer business model, but essentially if you think about what we are doing, we are providing – if I had some insurers behind us, then we are providing a distribution channel for them, so we’re sort of like an intermediary. But I don’t want to handle client money and all that sort of stuff. So we would be quite happy to engage with brokers as well.”
Expansion and funding
Brockman is funding the business himself for now, but with plans to follow in Amazon’s footsteps and launch across the US, Japan, Italy and Germany in addition to the UK and his partnership in China, this will not always be the case.
“We have lots of ideas to future-proof this model, because it is not going to last forever. So you’ve got to always be thinking about the next thing. International expansion is something I want to do and that is what I need money for,” he said.
“So we are now putting together what I call an investment teaser to put out to friendly people about the opportunity of investing into Thingco. And again I keep changing my mind about what sort of investor we want. Whether it’s a pure investor or a strategic investor.
“We don’t needs tons of money, because we know what we are doing. A lot of people start up businesses, have a good idea, but they don’t really know how to put that idea into practice. But we do. It’s simply now how to make our proposition bigger, more robust and more diverse.”
“That is the beauty of this model. It is easily transportable. I will probably follow Amazon. So the five biggest markets in the world with Amazon are the US, UK, Germany, Japan and Italy. We’re built on Amazon Web Services. We’ve got Amazon Alexa technology and we’re using Amazon distribution, so whatever we do Amazon gets their payments as well. So why not follow their distribution model? We have no connection with Amazon other than that, but it is a no brainer to follow one of the most successful models.”
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