One of the disadvantages cited in the past about fintech was that the companies in the sector were too small to offer the same services as some of the big traditional players.
What if something goes wrong? Is the supplier capable of compensating the financial services customer if disaster strikes? In the past most large corporates seemed to prefer working with large IT suppliers because they had a perception of safety.
This seems to be a thing of the past.
If you have any doubt just look at BMW Financial Services UK and its deal with insurtech Wrisk. From this month BMW in the UK is offering insurance to people that buy its cars through a small company in the insurtech segment of fintech, known as Wrisk. Wrisk offers a platform that enables customers to apply for bespoke insurance policies that can be managed online.
But what I found most interesting is that Wrisk is replacing a deal with global insurance giant Allianz. It was set up in 1890 and I think it might be the biggest insurance company in the world. To put it into context Allianz has about 150,000 staff in 70 countries and in 2017 revenue of about €126bn. Wrisk has 38 staff, made up of insurance and tech experts, and has only been going a few years.
BMW Financial Services UK will retain a relationship with Allianz for existing customers, but all new UK insurance agreements will go through risk. And the deal could go beyond the UK if BMW in other regions likes what it sees.
Philip Kerry, sales and marketing director at BMW Financial Services UK told me that the rational for the change was the inflexibility of traditional large suppliers and the staid nature of insurance. It’s dull but everybody needs car insurance. So being big is no longer an advantage it seems.
Kerry said: “Wrisk is a nice balance between insurance expertise and innovative interfaces with the customer. Its platform is a world away from the stuff we have been used to.”
I hope to interview Wrisk next week so should have more on this.
If you have any David and Goliath stories like this please contact me on [email protected],com. Or comment on this post.