Can you transform insurance from the outside?

Preface: Yoav Farbey speaks to Estonian insurance entrepreneur Risto Rossar, CEO of [Insly], about disrupting the insurance industry, the future of finance and how to make an impact when approaching insurance from the outside.

Risto, please talk to us about your entrepreneurial journey in the insurance industry.

I have been in insurance for 15 years when I established an insurance brokerage company in Estonia. We started to sell insurance purely on the internet and so it was not very traditional. We compared prices, issued the policies and managed all the administration on behalf of insurance companies. Of course, back in 2000, insurance sales on the internet didn’t really pick up very quickly. In order for us to survive we had to sell through other channels, such as car dealers, leasing companies and gas stations. We managed to deploy the same technology that we had built for our internet sales platform, with some small modifications, in order for them to fit into these channels that already sold insurance. In doing so, we increased the efficiency of sales processes considerably.

However, two years ago we made the decision to take the technology out of the broker company and to start selling the technology to other brokers and agents, globally – this is how Insly was born. The main reason we did this is because the insurance broker business is not very scalable. You need to know the local market and people. We were already the biggest in the Baltic state and we could not grow much more.

When you say local do you mean country?

Yes, it is quite country specific. Sales are done locally and you need to know local insurance market and insurers. Each country is different and its difficult to scale the insurance broker business geographically. There is no insurance broker company that has grown organically to become global player, all have achieved it through M&A deals. You still need to know the people in the industry in each country.

What made you commit to taking this technology to London?

The trigger that made us come to London was when we noticed that the technological level within the brokerages are low.

Despite having clients from twenty different countries, we really put special focus on London. We are physically selling there, meeting with clients and making outbound phone calls. In other countries, we are only dealing with inbound requests. The reason that we are more active in London is because it is the centre of the insurance world. Our clients in London do business globally, so our technology gets spread globally. For example one of our clients, BDB, is selling Lloyds products in Italy. Several hundreds of brokers in Italy are now using our platform to sell Lloyds products but yet we didn’t need to sell directly to the Italian brokers.

We also believe that being able to sell in London, gives us a ‘quality stamp.’ It gives us credibility and makes it easier to sell to other countries. If London brokers trust us then so will people elsewhere.

Finally, we took part in the Startup Bootcamp accelerator, which gave us valuable relationships within London FinTech scene and really helped us to grow our business.

Cumulatively, these factors meant we stayed here permanently.

Do you think someone who is not in insurance broking can create a startup that can disrupt the industry?

It should be mostly the case because when I established my original company IIZI, I came from the banking and investment world not from insurance. Being an outsider also means that it will help you look at that world with a different perspective. People think that insurance is very complicated, simply because it is communicated to be so. However, when you start to ask questions, there is not much that is complicated. The only thing that is complicated is other people making it complicated to understand. People should not be scared to come in when they don’t have an insurance background.

Looking to future, where do you want to see Insly go?

Our view is that [Insly] should be software that is widely used in the insurance broker sector, globally. We want to digitalise the entire industry. We see that as our mission or goal.

What is the future of financial insurance industry?

I wish people would take an insurance company, disassemble it and put it together again with the goal that everything can be solved with technology — maybe even eliminating human employees altogether. The goal would be to create an insurance company that is 100% digital. However, that vision requires lot of money, perhaps even in the millions, which is difficult for any startup to raise.

If you were speaking to someone interested in starting their own business, what advice would you give?

Don’t overthink things. Just start executing. You don’t get it right in the beginning anyway. Fix problems along the way. Business is quite simple, you don’t need to be very smart, you just need to start doing. The journey will be your teacher.