Should large companies innovate by creating inhouse ‘startup’ teams? Insurance company Aegon did so when it wanted a social, mobile insurance label. They created Kroodle, a new insurer run by a small ‘startup’ group. We interviewed co-founder Perry Koorevaar from Kroodle about their recent launch.
Can you explain Kroodle?
Kroodle is a new type of insurance, adapted to the current times. Specifically it is mobile-oriented: people can do everything they want to do on their mobile phone. Of course there is a website, but everything is designed mobile first. Secondly it is social: we use social websites, in our case Facebook.
What exactly makes Kroodle social?
Using social networks has two advantages: first of all convenience. Most people do not check their insurance policy every month, and therefore they forget the password often. We allow login with Facebook, making it easy for people to check their insurance details.
Secondly we would like people to share and recommend Kroodle to their friends. The insurance industry started in a very social way, with neighbours cooperating to share the costs of accidents. We want to bring that social aspect back. The cost of an insurance claim is shared by all people insured. If you know some of the other people, you will be less likely to make exaggerated claims.
Do you have examples of other companies that are social like Kroodle?
We are running a recommendation program similar to AirBnB. When you recommend Kroodle to a friend, you get a discount and they get a discount. Both you and the friend benefit. Another example is friendsurance from Germany. They are also a modern insurance brand and they let you share risks with your friends. Another interesting concept is the USAA, an insurance company that only accepts former armed forces staff: every member knows that all other members have a similar background.
What was the biggest challenge in bringing Kroodle to the market?
In order to make mobile insurance work, we had to simplify the registration processes. We had to minimize the work for the user and that meant reorganizing all the work at our side. This was and is one of the biggest challenges in creating a good mobile insurance proposition. We are still working on it: the registration process is done but we are still working on automating the claims process.
Insurance is a regulated industry. How did you handle this?
We had to register Kroodle in order to offer insurance products, and we decided to operate not as an insurance company but as an intermediary. We find products from other insurance companies for our clients, but do not bear the risk ourselves. Secondly, wit really helps us to operate as part of UMG.
If you sell products that are created by others, how do you ensure that you are unique?
Unlike other intermediaries, we do not offer dozens of products in each category. We select one that we believe is modern and right for our clients. For instance we decided to have a pay-as-you-go travel insurance, that can be turned on and off with your mobile. We also let customers cancel their insurance at any time.
What did you do before co-founding Kroodle and how did you end up at Kroodle?
I have a background in classified adds. Before that I did corporate finance and was a strategy consultant at BCG. I joined Aegon 1.5 years ago, end of 2011. Aegon realized that mobile Internet and social networks were going to have an influence on their core business so they hired me to do ‘something’ innovative in insurance. In april/may 2012, we went to the Aegon board with the proposal for Kroodle. We had decided we wanted to create a mobile first, socially oriented insurance brand and had already decided on the name Kroodle. The CEO, as part of the board, was directly involved in the decision to go ahead.
How is the link with Aegon, the mother company?
We have a small team of about 6 people. Most of these have worked at Aegon for years, so they have many connections to other parts of Aegon. From the perspective of Aegon, we are a project team that reports to a steering group with several board members in it. As a project, we can call in the expertise of insurance experts from Aegon, and we have received a lot of help from many people at Aegon. UMG (Unirobe Meeus Groep), a part of Aegon, is actively involved and they provide a lot of expertise and support.
At first we were located inside an Aegon building, but we are now located exactly like a startup: we rented a unit in the Caballero Factory in Den Haag, amongst other startups and creative companies.
You launched with a cool launch event in May 2013. Was that also the official go-live?
We went live in March 2013, but without any publicity. The first customers were friends of the team or people who knew us from Aegon. With our launch event, we did not want a traditional product promotion show. We made it not about us, but about social change (read the report on this event with Facebook founder Chris Hughes as keynote speaker).
And how many customers do you have?
We have more than 100 customers already, which is a lot considering that we did not do any active sales yet. Our strategy is to find the right formula first before scaling up. The customers that we already have signed up because they really like our products. Many people from Aegon support us and are enthusiastic about what we are doing, because we are an initiative that really started from the company itself, with a team consisting of long time employees.
What do you do yourself as Kroodle team, and what did you outsource?
We outsourced as much as possible. We designed the processes and proposition. We have an external software developer for the website (and later for the apps). We have external graphics designers and a party that does the search optimization for us. We do not have legal expertise in house, but have good connections with the right people inside Aegon. Several of our team members do have insurance diplomas (WFT) because we have to from the regulator.
What is the goal of Kroodle? Will it remain an independent company?
Our goal is to reach a 5% market share in the Dutch insurance market share, because this will give us enough scale to operate independently. What happens then is not clear. An IPO is not planned.
Aegon has a few other experiments: Onna Onna, KNAB, eyeOpen. How is your relation with these other ventures?The relationships are good but we do not do anything extra as sister ventures. We all are standalone companies at our own location.
Do you have advice for people working in insurance?
Stay connected to the latest technology. The future is online and digital, especially for a product like insurance that has never been physical. Insurance is a data-intensive industry so all major trends, like cloud, mobile and big data, will have their impact on insurance.
What is the advantage of being part of a large company, and what are the drawbacks?
The major advantage is that you can use the expertise of colleagues. Also it is nice to not have to worry about finding investors because you have the company as the initial investor. The most important drawback is that everything takes longer, because you have to get permission first.
What have you enjoyed most about setting up Kroodle?
The best thing about Kroodle is that I can work with many different groups of people, and learning the latest technologies. I enjoyed learning about technologies like the open graph network.
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