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Insurtech start-up Kudo announces Series A funding round as app launches to UK motorists

Kudo Insurance (Kudo) has started fundraising for its Series A, as it launches its new app designed to radically change how insurance is typically consumed, priced and distributed.

The business has a five-year ambition of becoming the most profitable and popular insurer in the UK, notable given the sector’s recent struggle to deliver profit. The market Kudo is addressing is a sizeable one, with GBP16 billion of gross written premiums in 2019, but the sector is loss making and suffers significant reputation and trust issues. Kudo believes by being mobile first and harnessing great technology and product it can start replacing incumbent insurers market share much in the same way neo banks have achieved with banking products.
 
The proceeds from this funding round, with a straight equity investment on offer which is Enterprise Investment Scheme approved, will primarily be used to drive growth and further creation of data science intellectual property as well as contributing towards underwriting capacity.
 
Kudo’s app technology assesses a driver’s skill behind the wheel and creates a personalised Driver Score which is used as part of calculating the customer’s insurance premium. The best drivers receive the biggest reductions on their Kudo car insurance premium.
 
Kudo’s focus on fairness and pricing based on real driving data alone, rather than outdated models which discriminate against many social groups, differentiates it from both established providers and recent market entrants.
 
To qualify for a quote, app-users will be required to achieve a Driver Score of 700+ (out of 1,000), and Kudo estimates that more than 75 per cent of people who download the app will achieve the required score.
 
Drivers with a score above 700 will receive an increasing level of discount beyond Kudo’s already competitive standard rate at 700. Those with the most impressive Driver Score will be rewarded with discounts of up to 30 per cent.

Kudo’s founder is Peter Graham, a globally recognised insurance and insurtech leader, entrepreneur, and innovator.

Graham was a founder member of the executive team at the UK’s first web-based insurer esure where he served as CEO and has over 30 years industry experience both in the UK and US, having worked in the Lloyd’s market, at Direct Line, two US insurers, Deputy Chair at First Alternative, Managing Director at Legal & General and for two years Chair at Barbon Insurance.

Graham has blended a senior team with decades of insurance experience, something that has been missing at other challenger brands. This includes Andy Webb, previously Executive Director at Churchill and COO at Legal and General and Barbon; Stu Ballantyne, previously Supply Chain Director at Direct Line and Claims Director at Swinton and Insure The Box; Sherdin Omar who ran pricing at Liberty Mutual; and Ed Longley who has run marketing and change projects for esure, Hiscox and Ticker.
 
Graham comments: “Watching decades of customers being constantly disadvantaged due to pricing based on generalised assumptions, and unjustified administration fees, were the major triggers for Kudo to disrupt the market and create a fairer system.
 
“Tailored premium discounts based on the driver’s actual performance are the future, shifting the emphasis away from factors outside of a driver’s control such as their age or location.
 
“Kudo puts an end to the current business model in which safe drivers subsidise the premiums of poorer drivers. At last, safe driving will have its just rewards.”

In addition to providing discounted premiums for safer driving, Kudo customers will earn Kudo Koins for driving safely and fuel efficiently on every trip. Customers will be able to exchange Koins for the chance to win cash in regular prize draws.
 
Graham adds: “We firmly believe that drivers should be incentivised to drive safely and fuel efficiently on every trip. Kudo Koins will be a fun way to make this happen. Looking ahead, we hope to be able to incentivise our policyholders to drive less: Kudo Koins will be offered to those who give up the car for a regular journey and walk, cycle or take public transport instead.”
 
The free app is currently available to download from the iOS App Store, and the Android version will be released soon.
 

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