Insurance start-up Laka has announced financial backing from Zurich Insurance for its new bike insurance product, which it says is ‘truly disruptive’. Formerly known as Insure a Thing, Laka’s model means that it only earns fees when acting in the best interest of the client – namely settling claims. The consumer does not pay any upfront payments or premiums. Claims are instead settled at the end of the month as part of a group risk pool plus a fee. Laka says that the payment will change each month, but be capped at the price of a traditional insurance policy, meaning that customers will feel the benefits if claims performance is better than expected.
“While this tried and tested insurance model obviously works, we think there’s an alternative way that can benefit careful consumers – a way that shares with them the pricing and claims decision-making,” co-founder of Laka, Jens Hartwig said. “We’re starting with high-value bike cover but as our model proves successful we’ll look to explore other products in the pipeline.”
Laka says that this model encourages customers to behave in a way that will reduce the number of claims. David White, head of retail management at Zurich concludes: “Innovation is an often over-used word but Laka is one of very few insurtechs doing something genuinely exciting and disruptive. We look forward to working with Laka in the future as they expand their proposition further.”