Laka (previously known as Insure A Thing) has partnered with Zurich to launch an innovative model of peer-to-peer-style bicycle insurance, according to GlobalData Financial Services
Customers are not asked for upfront payments but instead pay a flexible amount, which is dependent on the overall claims in the community each month. If there are no claims no fee is charged, while the maximum claim is capped based on the value of the bike.
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Customers are grouped together in “packs” by lifestyle and behavior. Any claims made are covered by Laka and then split between the pack, with a 25% fee on top for Laka, which is where it makes its money. Zurich will underwrite the policies.
The move is part of the evolution of insurance, which involves helping customers protect their goods as opposed to just paying out claims. But unlike players in the health and home sectors this model does not rely on just data to alter behavior. It attempts to create a community, and to reduce costs by emphasizing the importance of looking after your own bike. Leaving a bike unlocked is described as “acting against the community,” for example.
In an interview with Insurance Business Magazine, Laka co-founder Jens Hartwig suggested that bicycles are only the starting point for this type of insurance. With Laka offering insurance on bikes worth up to £15,000 (more than many cars) and securing the backing of Zurich, it appears this model could gain traction across the industry.
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By GlobalData
