Zego exits B2B market and makes further staff cuts

Motor insurtech unicorn Zego has exited the B2B market in a move designed to increase profitability.

As a consequence, the firm has also made staff cuts.

That was according to the full year accounts filling for 2023 posted on Companies House by Zego’s parent company Extracover last week (27 September 2024).

The filing explained: “As part of our strategy to focus on sustainable growth, we decided to exit the B2B business. Despite achieving topline growth, this segment was not meeting our performance expectations.

“This decision aligns our long-term business strategy to prioritise areas with strong potential for profitability. The B2B business did not benefit from our telematics proposition, which is central to Zego’s strategy to outperform the market.

“By leveraging real time information to accurately price risk, our telematics capability is a key differentiator and critical to our success.”

Zego, which insures Deliveroo, Uber Eats and Just Eats delivery riders reported that gross written premium (GWP) fell to £121.9m year-on-year, down from £137.6m, as a result of the insurtech making a “conscious effort to be more selective in relation to policies written”. 

Losses before tax for last year, however, were reduced to £32.6m, down from £59.9m the previous year.

The firm also reported a revenue increase in net turnover of £16.3m, up from £11.5m in 2022, which the insurtech partially put down to the improvement of underwriting performance. 

In 2023, Zego’s co-founder Harry Franks left the business due to personal reasons.

Strategy change

The filling also mentioned that new products would be rolled out in personal lines insurance premium segments for new drivers by the end of 2024 and into early 2025.

It continued: “We divested the B2B product line to concentrate on serving individual drivers. Our company’s strategy focuses on leveraging proprietary telematics technology as an underwriting advantage, positioning us for sustainable and profitable growth in the coming years.”

Last year, Zego shifted focus to its B2C offering to help it reach profitability faster, but this also led to some redundancies in the B2B segment during the third quarter of (Q3) 2023.

Currently, its staff numbers stands at 348, which is a slight reduction from an average of 360 staff across 2023 but an increase from 2022’s figure of 314.

In July 2022, the insurtech let go of 17% of its staff across various departments, with the firm’s chief executive Sten Saar explaining it could “no longer avoid headcount reductions”.

However, the insurtech added that it was “actively” seeking to hire employees who share and live its values.

“With these changes, we are confident in our positioning to drive sustainable growth in 2024 and beyond,” the filling addedInsurance Times has contacted Zego for further comment.