Getsafe stands out for having over 10,000 customers and is currently adding 3,000 per month. Average age is 29 and 90% of customers are buying insurance for the first time. Founder and CEO Christian Wiens claims the company has achieved its target market share of 5% among millennials; more than AXA (c.4.5%) and not far off Allianz (c.6.7%).
Founded in 2014, Getsafe initially operated as a digital broker, gathering data on over 20,000 customers and 80,000 policies via dozens of insurance partners. The team then raised €8m Series A in October 2015 and used the funds to evolve into an MGA, launching a ‘Master Policy’ concept earlier this year. This allows customers (or ‘members’) to buy, adjust and remove cover digitally and easily within a single account. Currently this extends to six lines (or ‘modules’) including liability and health with other products in the pipeline: contents, income protection and even an ETF-linked investment offering. Founder and CEO Christian Wiens is quick to point out, however, that insurance will remain the core proposition: “everything we do should be linked by insurance,” he says.
More than 30% of Getsafe customers log in and enhance their cover after purchase.
Capacity is provided by Munich Re’s Digital Partners team. Christian adds he sees “no strategic advantage” in owning the capacity when we discussed the current debate on this topic. For those interested in the pros and cons, the company recently published a good infographic on the issues.
Christian says loss ratios are currently significantly “below forecasts”. That doesn’t mean much, of course: Lemonade’s blog posts remain upbeat whilst losses mount. Adrian Jones, Head of Strategy and Development, published some insightful analysis on mounting losses at Lemonade, Metromile and Root in a recent post called ‘Bigger and Redder’. But let’s make an informed assumption that Getsafe didn’t forecast a loss ratio of 150%.
Getsafe, which is based in Heidelberg, Germany, has a headcount of around 40 and plans to open in three new markets in 2018, aided by the conclusion of another fundraising round towards the end of the year.
The Oxbow Partners View
Getsafe challenges a few of our hypotheses about InsurTech.
First, we have observed in the past that InsurTechs significantly innovating the proposition (e.g. Guevara) have had less traction than those selling more traditional products better (e.g. Zego, Lemonade). We have questioned whether customers are willing to invest in understanding new propositions, and default to less optimal, standard propositions. Getsafe seem to have found a nice middle-ground, balancing some product innovation but without the proposition looking unfamiliar.
Second, the company is demonstrating (early) success in the D2C model – something we are generally sceptical about because of the marketing clout of the incumbents. We have seen few examples of InsurTechs getting real traction in this channel (notable exception: Bought By Many) and normally favour B2B2C (or potentially incumbent partnerships). Christian notes that the business has achieved a customer acquisition cost of just €20 per policy, around 20% (he says) of standard acquisition costs in the channel. If there’s a ‘macro hypothesis’ for InsurTech, then it has to be sustainably low customer acquisition costs. Getsafe appears to be well positioned on new business acquisition and we speculate that retention will also be high given the absence of equivalent propositions in the market.