Interview: Lineker adds a little kick to King's new telematics launch

It was while on an extended break from work, signing for deliveries on the doorstep, that serial tech entrepreneur Richard King was inspired to dive back into the insurance industry with his latest venture.

Often encountering one particular van delivery driver in her mid-twenties, King recalled her reaction when, on one occasion, he asked what she was paying for her insurance. She was paying over £1,500 – and with that, King had spotted an opportunity. 

“Her reaction reminded me of the young drivers we spoke to in focus groups back in 2010,” he said.

It was the spark that encouraged him to put a team together and take another crack at telematics.

Using cheaper and simpler technology than was available when he founded his first telematics firm Ingenie in 2009, King wanted to take telematics beyond young drivers to the wider market – starting with van drivers.

“A van driver of 25-30 has grown up around telematics. They are most likely to be an early adopter,” King said. “It’s an appetite we have.”

In a period of 18 months, the venture went from concept, through product development, and went live with young drivers as Ticker last month. A van offering is due in weeks.

Writing risks

This time, having learnt from a long career in the industry, things are slightly different. For starters, Ticker benefits from updated technology allowing the driving data to be reported through a customer-installable and autonomous pocket-sized device.

But what was particularly important to King this time was writing its own risks, as opposed to working with a panel of underwriters.

Ticker has a managing general agent (MGA) arrangement with Munich Re’s Digital Partners, whereby Great Lakes Insurance will be the sole insurer of the proposition.

“The flexibility and control of owning the pen and having the MGA was such that I would not have gone again if I didn’t have that,” King said.

He added: “Arm-twisting underwriters for capacity is incredibly hard work, and having aligned business objectives is near-impossible. Our ambitions will always be far greater than theirs. That’s hard, and the whole idea with being a disruptor is that you are constantly learning from the data.

“The beauty of sitting here seeing the data coming in, having the right people and the best tools is that you have the flexibility and control to make changes as you go.”

King knew Digital Partners chief executive Andy Rear through being on the board of smart-home insurtech Neos together, and he was aware Munich Re was looking for start-ups to support. Linking with Digital Partners in particular was a key factor in King proceeding with Ticker. With the backing, King says Ticker has far more capacity than any of the broker players in the same field, and enough to ensure it is not limited on volume.

“Would I have taken an MGA from Gibraltar? No. Part of the reason for creating Ticker was the alignment of stars with the approach from Munich Re,” he said.

Building the team

By Q1 next year, when King expects Ticker to start turning a profit, he said it should put the start-up in a position to challenge the direct writers. A large part of King’s optimism is based on the list of heavyweight industry names he has brought on board, aided by the impressive contact book he has built up over the years and his past form.

King has again teamed up with ex-Ingenie chief executive Mike Ketteringham as Ticker’s chief underwriting officer, while another former Ingenie colleague Steve Broughton has joined as chairman. The board also includes current Ardonagh chief operating officer Adrian Brown and Kerry Michael, a former commercial director of the RAC – who King said he was eager to work with.

“People were very keen to go with us from the start. The minute the story was out there, I was fortunate enough to be approached by some great people,” King said.

They are supported by advisors to the board Barry Smith, ex-chief executive of Ageas, and Andy Warren, RSA’s former head of claims.

Having not written the risk before, King said recruiting for claims and pricing has been a core priority over the last 12 months.

“There are a lot of start-ups and disruptors that are very much focused on trying to create new markets, and using PR to create value,” King said. “We’re a disruptor focused on the basics, which is underwriting and claims, and using telematics data in the most intelligent and appropriate way possible.

“We’re only going to be successful if we achieve our volume targets, while delivering an attractive loss ratio. The only way you’re going to do that is if you’re smart in using the data to get underwriting and claims right. That’s why I’ve brought in a lot of people that have got real pedigree in pricing and claims.”

According to King, it is the best team he has ever worked with. And while picking up substantial investment to get the project off the ground from Digital Partners and celebrity friends Theo Paphitis and Gary Lineker, 70% of equity remains with management.

King said the beauty of private investors over venture capital was that there would be no pressure from above to build volume too quickly.

He said: “I much prefer having a corporate investor who understands the nuts and bolts, so you’re not sitting there spending most of your time trying to explain to them what you’re doing.

“What you’ve got is a shared vision and a mutual understanding of how to go about this. It means I’m not under any pressure in this first year to be chasing volume.”

Lineker adds ‘rocket fuel’

Lineker, King’s former next-door neighbour and best man at his wedding, previously invested in Ingenie, and was one of the first to sign up to back Ticker.

Lineker told Insurance Times: “Kingy explained how Ticker was developing a new box that was cheaper and self-installable, which meant they could take telematics to a much wider audience. It sounded like another great idea, so it was an easy decision to get involved again.

“Any investment in a start-up has a high degree of risk – that’s why the returns can be so good. But I have a lot of faith in Kingy. He’s got an excellent track record and he’s assembled a great team.”

King said the football legend’s public profile served as “rocket fuel” for brand exposure the first time around. He hopes that Lineker, who has 7.2m Twitter followers, can have a similar impact again.

But, with King’s pedigree in forming insurance start-ups, which also includes founding Innovation Group in 1998, exposure is one field where he does not expect there to be a problem. King’s form has already helped him bag two build slots on the price comparison websites for this summer, something it took him years to achieve with his last telematics venture. However, in part, King explained, this is because telematics is much more prominent than it was 10 years ago.

“Telematics is now a significant market accounting for approximately one million policies,” he said. “So, the conversation this time around wasn’t about trying to justify the use of telematics – it was proving that we would attract volume by expanding telematics beyond young drivers.”

King and his team have spent the last year holding focus groups with van drivers to determine exactly what their biggest frustrations are with insurance. Along with pricing, he said guaranteeing a like-for-like replacement and offering best price first time was important to them.

Plan for vans

While young drivers will underpin the business, with four out of five young drivers now purchasing a telematics policy, King said this understanding of the van market would enable Ticker to develop a particular strength in van.

“If a van driver goes to any of the other insurers, they are being offered a young driver telematics proposition,” King said. “We believe we’re the first to come to market with a proposition designed with van drivers in mind, rather than crowbarring them into a young driver product. We’ve spent a year getting ready: designing the proposition, systems development and rating work.

“There aren’t many underwriters or insurers converting at that level, because they don’t have an appetite for it. That’s an appetite we do have.”

So far King says everything has gone according to plan, with the next phase being to launch an older drivers telematics offering later this year.

Through Lineker, King himself and the comparison sites, brand awareness of Ticker has the potential to grow impressively. King says the bigger challenge will be developing it as a mass-market telematics player.

But despite turning 50 last month, he is just as up for the challenge as he has ever been with his previous ventures. He said: “I don’t play golf or tennis, I love working. I especially love working with clever people and Ticker has a lot of clever people.

“I’m still driven by ambition as much today as I was in my twenties. Of course the financial rewards are a result of good work, but I love the ambition. I’m loving this more than any of the other businesses I’ve created.”

To be successful, he will have to break new ground, but King is confident the timing is right for the next generation of telematics.

He added: “We’ll be out there taking the arrows, trying to be the market-maker for van and older drivers with telematics. We did it for young drivers, and we can do it again.”