Transformation needs ideas, vision, leadership, strategy, resourcing, exceptional powers of execution and an ability to explain why it is important to customers, investors, employees, partners and stakeholders.

ZEGO proving it has got it right becoming the UK's latest unicorn in the process. 

The initial idea of transforming a substantial and under-served market has met all the transformational critical success factors above. 

"Zego offers commercial motor insurance for businesses, from self-employed drivers and riders to fleets of vehicles, spanning pay-as-you-go insurance to annual policies. It combines tech with multiple data sources to offer insurance products that it claims save time and are more cost-effective. It earned its own insurance license in 2019, enabling it to build and sell its own policies, in addition to working alongside other insurers.

Technical/data integrations include those with companies in the ride-hailing space, such as Uber, Ola and Bolt, and in the delivery space, such as Deliveroo, Uber Eats and Just Eat. More recently, Zego has become a key partner in the U.K.’s burgeoning e-scooter rental market, partnering with companies like Tier, Voi and Dott.

Next up, the insurtech is betting big on offering insurance for fleets. “Over the past couple of years, Zego’s focus on powering opportunities for businesses has expanded to include not just self-employed drivers and riders, but also entire fleets of vehicles,” Sten Saar, CEO and co-founder of Zego, tells me, noting that 80% of new vehicles are now sold to commercial customers.

“This has been both a natural progression for the company, with the only real difference being distribution, as well as a focused effort, as Zego aims to capitalise on an ever-growing market currently underserved by the insurance sector”. 

Steve O'Hear in Tech Crunch 10th March 2021

The speed of growth, acquisitions and products indicates the soundness of its business model and and strategy. Take one example; the acquisition of Drivit.

Drivit transforms a smartphone into a telematics and data powerhouse and the ideal automated FNOL trigger for insurers. Of course it is not the only one. The Floow and Sfara offer similar capabilities but technology is always the means to an end rather than the end itself. 

ZEGO has a firm idea, strategy and business model to leverage Drivit to deliver smarter UBI insurance products and services to its chosen target market. They know why it is important and knowing why makes it more likely it will work.

The world has changed so much in the last year that traditional industry and market boundaries can be seen to be morphing into new territories. The business partnerships being forged today will be the leading forces shaping the world tomorrow.

You can see in ZEGO the delivery of mobility services to a specific market place. The same is happening across whole industries that a year ago might have been labelled very narrowly but are now strategically expanding like dynamic Venn diagrams as they grapple with the strategic challenges of being market leaders in a world of virtual, online and digital engagement.

Tesla was written off by many as it struggled to raise production rates and product quality. Today, its valuation recognises the dominance it has in data from the miles driven by Tesla owners. It's software and data is a key strategic advantaged which can allow it to embed the right insurance products for its owners, drivers and fleet operators, write better risk and deliver extensive mobility services.

The demise of the internal combustion engine, increasing user base of electric vehicles (EV) and rise of autonomous vehicles (AV) spell massive change. When an industry leader like VW cannot pull together all the software for its Golf EV in the way Tesla does you just know disruption is bubbling away. Read more in

"The Twilight of Combustion Engines and the impact on Auto Insurers" 

Incumbent insurers seem more intent on automating the workflows and processes of auto claims than rethinking insurance as part of mobility services. The stated intent to use AI to automate both FNOL and the whole 'Total Loss- Quick Cash Settlement' and automating repair time/cost and repair processes suggests this and is discussed in ‘I don’t think that we go backward’: Insurers, auto body shops discuss digital shift'.  

It is not that incumbent carriers are not facing up to change. DLG are delivering new services in collaboration with The Floow for example. Every carrier has pilots with software companies like Solera/Audatex, Tractable and Extract360. They have the challenge of the wide range of products based on an annual premium and renewal and no relationship with customers whose only contact is generally a renewal notice. Or if they need to make a claim.

ZEGO is one of a number of companies that have risen from an idea, the early stages of a few visionary customers to a sustainable and viable business. This is both an inspiration and a challenge to incumbent insurers who are often tied to high fixed costs, hindered by legacy technology and restrained by management at all levels rooted in the past.

Mckinsey states that only the top quintile of insurers actually make an economic return on capital. Motor insurers have generally made profits not through the core product but rather via the add-ons e.g. premium finance. In many countries they have surrendered a customer relationship to distribution via price comparison websites and offering discounts to new customers but none to loyal customers.

In the UK that is changing as the FCA plans the ban on 'price-walking' so carriers will have to compete on product rather than price. And relearn the importance of customer relationship management. Other profitable value-adds will be under the microscope of the FCA meaning that carriers will have to focus on the profitability of core products and decide where their core competencies lie. And how to leverage them.

And all the while a band of predators are circling the wagons from agile full-stack insurtechs to the digital giants Amazon. Google, Apple and Facebook in the West and ZongAn, PingAn , Tencent and others in Asia. Not to mention auto manufacturers, fleet operators, mobility service providers all looking to an eventual future of AVs, Robotaxis and product liability insurance supplanting driver/owner auto insurance.

Interesting times!