Kinsu: The UK trailblazer with a whiff of Lemonade

‘We’re here to change the way you feel about insurance,’ start-up Kinsu’s homepage proudly boasts.

As the UK-based company launches, comparisons to US insurance start-up Lemonade, which since 2016 has seen customer numbers skyrocket and picked up a US$120m investment, seem inevitable.

Kinsu, like Lemonade which has secured the status in the US, has applied for B Corp status. This means that it will be held to rigorous additional standards of accountability, transparency and social and environmental performance.

It also appeals to a customer’s sense of charity: for every policy bought, a donation is made to rough sleeper charity StreetLink.

Its team includes behavioural psychologists that are working to appeal to a ‘millennial’, socially-responsible market through an easy-to-use app.

Kinsu chief executive Chris Sharpe says he thinks Lemonade is doing great things in the US. He is impressed by what their PR team has achieved, and thinks the thought leadership they’ve managed to direct is “inspirational”.

However, Sharpe hastens to say, Kinsu is very much doing its own thing.

“Insurance itself is sort of amazing. It’s elegant, it’s beautiful. It’s the essence of the shared economy. It’s the premiums of the many paying for the losses of the few. It doesn’t really need tinkering with.”

Where Daniel Schreiber’s Lemonade is made up of industry outsiders, and proud of it, Kinsu’s founders Sharpe and Russell Merrett are ex-Hiscox big hitters.

Sharpe explains that he joined Hiscox in 1997, and has never worked for another insurer. He whetted his appetite for building a business when he set off for North America to set up Hiscox’s Bermuda office, growing it from two employees to more than thirty.

When he left his role as executive vice president and underwriting director at Hiscox’s Bermuda operations in 2012, he concentrated on art projects, getting married and having kids – he jokes; “I should have said that the other way around: having kids and doing art.” – but never quite took his finger out of the insurance pie, as a non-executive at a Californian insurance company.

He admits that on leaving Hiscox, he never thought he would fully commit to insurance again, but not for lack of love.

“I was keeping my eye on the insurance world and lots of my friends are still working in insurance and sadly when we get together we still talk about insurance, which is a source of deep regret for me,” Sharpe laughs, “but I still think it’s really good fun.”

Insurance is “beautiful”

Sharpe took the plunge back into the insurance world when he co-founded Kinsu. For the Kinsu team, “insurance is beautiful”, a far cry from the ‘insurance is broken’ rhetoric of Lemonade and other disruptors.

The word Kinsu itself is an amalgamation of ‘Kind Insurance’.

“Insurance itself is sort of amazing,” says Sharpe. “It’s elegant, it’s beautiful. It’s the essence of the shared economy. It’s the premiums of the many paying for the losses of the few. It doesn’t really need tinkering with.”       

From the sidelines, Sharpe watched the insurtech space grow. It was partly this that propelled him back into insurance.

Whether it was talk of “squeezing” blockchain in, or peer to peer insurance, which Sharpe says he never quite got, it seemed like there was a lot of hype. He does not think of Kinsu as insurtech.

He continues, “I don’t know how you could improve that elegant mechanism. It’s the structure of how it works. But there’s lots of things you could do to make it better. There’s a disconnect.”

It is not insurance itself that causes anxiety, Sharpe says, but the way it is framed to the end-customer.

Challenging the underwriter

Aggregators and direct insurers’ websites are an obvious example in the personal lines space, he thinks, because they are designed around the underwriter not the customer.

“Apart from being ugly, it makes people feel like they’re being interrogated.” Sharpe shakes his head in disbelief.

With Kinsu, Sharpe and his colleagues wanted to find “all the things that people hate about insurance” and fix them “one by one”.

“And that,” adds a confident Sharpe, “is exactly what we’ve done.”

For a start, Kinsu policies are written in “plain English” and the product has been simplified.

In looking to make bike, gadget and contents cover accessible and customer-centric, Kinsu has challenged its Lloyd’s underwriters. With limited space on the app, and potential to quickly lose a customer’s attention, a policy had to be built on three to four questions. It took great discipline to design, Sharpe admits.

Claims - “If it’s grey, we pay”

Cover, which is paid for monthly and can be cancelled at any time, must be comprehensive, because Kinsu operates an “if it’s grey, we pay” policy.

Sharpe hopes that customers who begin with gadgets insurance will quickly be convinced to take on a contents insurance policy.

“Why should you reward someone for not having their bike stolen and penalise someone for having their bike stolen? It’s a little bit counterintuitive”

Unusually, Kinsu also has a set excess for all policyholders and has pledged that premiums will not increase when a customer makes a claim.

“It’s the same financial outcome for us,” Sharpe explains. “We think our customers value that certainty of pricing. Why should you reward someone for not having their bike stolen and penalise someone for having their bike stolen? It’s a little bit counterintuitive.”

Sharpe shares the news that the company had only paid out its first claim, for a stolen bike, the day before. He is delighted when a colleague suggests he send them a bike lock with a bow on it to say thank you.

He is conscious of the possibility of fraud but, as Lemonade is trying in the US, hopes to limit this through behavioural psychology and targeting a very specific type of customer. Hopefully, Sharpe says, fraudsters will be unwilling to target the socially conscious “good guys”.

However, if fraud does become a problem then they already have plans to investigate further behavioural-based deterrents.

Building “solid foundations”

If the start-up has big ambitions for the year, Sharpe is playing his cards close to his chest.

“We aren’t looking for rapid growth or quick wins. We want to put down solid foundations,” he says.

Sharpe adds that Kinsu has been very fortunate. So far, it has raised £1.25m. Thanks to his and the team’s industry experience and contacts, the process of raising capital has not been tricky. In fact, they have been able to turn down offers, thanks to “smart friends with deep pockets”.

This means the team has a lot of say over the direction they go in and they have been able to remain fairly secretive.

This year, Sharpe wants to focus on building a talent pool that will secure Kinsu’s success. The company has already made a raft of hires in January. He says working at Hiscox has taught him the value of being surrounded by great people you and your customers trust.

For now, Sharpe says, “We are under no pressure from anyone to do anything other than have fun.”

Time will tell whether Kinsu’s playful approach to insurance will morph it into a Lemonade-like player.