Chris Kenning: Stubben Edge’s £5.6m cash injection brings further M&A opportunities

After closing 2022 with the acquisition of insurance risk appetite directory Insurercore last December, insurtech Stubben Edge vowed not to make any more acquisitions in the new year.

However, February 2023 brought fresh capital to the insurtech thanks to a £5.6m investment from Dowgate Capital - this followed an initial investment from the capital market company in September 2022.

This financial support bolstered the business’ value to £175m, subsequently leading Stubben Edge to launch three new affinity partnerships in February 2023 to offer personalised insurance products. It also teamed up with mutual National Friendly that same month.

While the insurtech is still interested in acquisitions, it is now looking to do a smaller number of larger deals that revolve around Stubben Edge’s ethos and can help its customer businesses grow quickly.

Speaking exclusively to Insurance Times, Chris Kenning - chief executive of Stubben Edge - says: “Most of the time, we’re not making acquisitions - it’s firms that we work with merging with us.

”We are looking for people who have got the same vision - small to medium-sized brokers and independent financial advisors (IFAs).

”I believe that we can be the conduit for change in the UK financial services market. I wouldn’t want to be seen as a consolidator – we are buying a breadth of services that our clients need.

“It’s very much about how do we provide services so they can meet the requirements of the changing world. That’s where you can deal with the underinsurance problem and make sure people are getting the right kind of financial services.”

Digitalising broking

Stubben Edge was initially founded in 2019. Since its launch, the business has continued to add new strings to its bow - including establishing its own appointed representative network in March 2022, which is led by director of networks Gemma Jarrett.

However, the insurtech first came to fruition after Kenning got to know Jason Bingham - the insurtech’s chief technology officer. Bingham established web application company Lucid UX in 1999, however he teamed up with Kenning to officially buy the business in 2016 - this purchase formed the foundation of Stubben Edge.

Kenning explains: “We bought Lucid UX as we could see that digitalisation of the broking industry was going to be quite important to financial services.

“As part of our acquisition deal, we had to leave all our customers behind, so we started with zero premium and zero policyholders. Effectively, we started by building bespoke IT systems for brokers, MGAs, insurers and commercial finance companies.

“From there, we found that all small to medium-sized [businesses] had the same issues – they wanted to get access to data and analytics.

”We could see that there were several platforms doing administrative automation, but it was the administrative automation of existing processes – not thinking through what do those processes need to be in the modern era?”

Modernising administrative processes relies on data - this is the second facet that Stubben Edge focused on after digging into automation.

Kenning continues: ”Having built the difficult systems in terms of broker and MGA automation, we then started building out the data side of the business.

”We ended up digitalising our electoral register, resulting in 54 million people [featuring] on our database. From there, we built up a network of websites and partnerships which means we’ve now got 13.4 million people in the UK where we have got General Data Protection Regulation marketing permissions.”

For Kenning, data is one of the things that the insurance industry has in abundance.

Stubben Edge handles the data and analytics for two of the smaller price comparison websites, enabling brokers to better understand products’ pricing as well as when and where certain products should be sold.

He additionally feels there are opportunities for brokers when it comes to supporting startup SMEs - especially considering the range of insurances these business owners need to set up shop.

“My view is that the intermediary market can come together and sell more products, but also leverage [their] knowledge and insight onto those businesses – that’s going to be a good thing for the customer and for the resilience of brokers and independent financial advisors,” Kenning says.