Setoo is already gaining attention on the startup circuit having won the Battleground pitch at Phocuswright Europe earlier this year. The company is also supported by €8 million in Series A funding from AXA.
Setoo’s insurance‐as‐a‐service platform enables e‐businesses to easily build tailored insurance and protection products integrated into their customers’ journey, delivering a delightful customer experience and generating new revenue streams.
The platform helps e‐businesses generate ancillary revenue by creating new types of insurance products that appeal to consumers because it is personalized, fully automated, easy to understand, and provides claim‐free compensation in response to a pre‐defined trigger.
Setoo’s platform serves as a factory for creating and distributing insurance and protection products. These products are integrated into the customer’s journey through a set of simple APIs, and are completely automated from end‐to end, real time pricing, one‐click underwriting, policy management, and automated delivery of compensation.
What inspired you to create this company?
We believe the customer journey experience of the future should apply to the insurance industry as well. And this means offering insurance products that are transparent, simple, relevant and with no claim process required.
The notion that insurance should not only protect, but also delight consumers, is what motivated us. Today’s consumers want – and tomorrow’s consumers will absolutely demand – personalized insurance products that offer immediate compensation.
We started talking to many types of e‐businesses such as OTAs (online travel agents), ticket‐sellers and e‐commerce. We realized they our vision that insurance products of the future need to both protect and delight consumers.
So we set out to build a platform that enables the e‐businesses themselves – who know their consumers best and own the distribution channel – to build and deliver the best insurance products for their consumers.
Give us your SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis of the company.
Consumers should be offered highly‐relevant, simple and transparent insurance products. Our platform facilitates this by giving e‐businesses the opportunity to create their own products and test a range of product variants for different consumers. Our platform is not limited to the creation of a single product. Instead it acts as a factory for creating and testing new offerings quickly without the need for e‐businesses to understand regulations and how insurance works.
Our platform is GDPR‐compliant, approved by insurance companies including AXA, the FCA in the UK and ACPR in France. We are licensed to act on behalf of insurers across Europe, enabling stable, long‐term scalability.
OTAs see ancillary products as a vital component of revenue generation, but the purchase rate for insurance products is not currently meeting its full potential. There is space in the sector for new insurance products that address this issue in alignment with the ne of millennial consumers.
Various things can go wrong during a trip that result in substantial financial loss or emotional aggravation for consumers. Most insurance products available today are one‐size‐fits‐all, with a resulting customer experience that is largely negative.
For example, a consumer travelling for a business trip will have different insurance ne to someone taking a weekend break. If they buy the same insurance product, one customer might not get the protection they need while the other is protected against problems they won’t face.
A lack of transparency in insurance products, as well as tedious purchase and claims processes, is deterring consumers from buying policies to adequately protect themselves when they travel. Setoo intends to change this.
From the industry perspective, OTAs will finally be in control of the insurance products offered to their consumers, enabling them to deliver an outstanding customer journey, reducing customer churn, and significantly increasing revenue from ancillary insurance products.
So you’ve got the product, now how will you get lots of customers?
The strength of Setoo’s product is in how simple it is for OTAs to understand and use.
We have developed several marketing channels to facilitate the distribution of insurance products via a set of simplified APIs. E‐businesses can seamlessly integrate new products into their existing customer journey in a matter of minutes.
Setoo’s parametric‐based platform facilitates our approach, enabling us to serve our customers’ ne even better. I’m confident we’ll enjoy enhanced brand loyalty and therefore see increased conversions.”
Tell us what process you’ve gone through to establish a genuine need for your company and the size of the addressable market.
Ancillary products are now a crucial revenue stream for travel companies, with airlines such as Spirit already reporting that almost half (46.6%) of their total revenue came from ancillary sources in 2017.
However, in an increasingly competitive environment OTAs and airlines are struggling to raise ancillary revenue from insurance products as consumers are opting out of buying protection. Yet, the right products have the potential to win over consumers, with 43% of millennial travellers reporting they’d buy more travel insurance if it was personalized.
How and when will you make money?
What are the backgrounds and previous achievements of the founding team, and why do you have what it takes to succeed with this business?
Our founders, Noam and Eyal, are highly experienced entrepreneurs who are passionate about building platforms that help transform the way industries behave.
What’s been the most difficult part of founding the business so far?
The insurance industry is highly regulated, with interpretations of these requirements varying greatly between countries. We learnt the various aspects of IDD (Insurance Distribution Directive), developing a platform that can produce products across Europe, while abiding by country‐specific nuances in addition to general privacy rules and GDPR.
In addition, our platform provides value to each stakeholder where they need it the most. Consumers enjoy personalized, relevant, trustworthy, and automated insurance products while OTAs gain increased revenue from ancillary services and enhanced customer loyalty.
In addition, insurers benefit from regulated and automated underwriting, claims and distribution processes, with full control over risk and upside without operational costs.
What question might we have missed?
Take the example of virtual interlining, which is a new capability enabling travellers to build their own connections to maximize the possibility of finding better priced and more convenient deals. This brings with it the clear need for a new type of protection: a missed connection guarantee.
Here is Setoo’s pitch
And further analysis in the PhocusWire studio.