Among European insurtech startups to watch out, Cuvva is characterized by focusing only on the car industry, offering a service that many people have always dreamed of: a temporary car insurance, proportional to an actual use, on-demand.
In particular, there are two circumstances where the proposal from the Scottish Cuvva comes to the rescue.
It is well known that many people with a car, particularly those living in a city, do not make a frequent and daily use of it and thus pay an insurance premium disproportionate to the actual use and the risk to which they may undergo. Cuvva puts an end to this status quo with a simple and straightforward model: it lets you p policyurchase the insurance through a monthly pass ranging from 10 to 30 pounds, depending on the car and the city where you live, covering the risk linked to an “unused” car. When the insured person is going to use the vehicle, a sort of “topping up” the subscription is done via the Cuvva application, as low as 1.20 pounds per hour, only for the time you are expected to drive. The company claims savings of up to 70% on insurance costs for owners who travel less than 4,000 miles per year.
This type of insurance policy is the one that Cuvva is launching just recently.
The second circumstance is when you borrow other people’s car, the one of a friend or relative or in case of sharing. Usually, the traditional auto insurance premiums are linked to a specific driver, the owner. This type of requirement was in fact the original focus of Cuvva, when it was launched in 2015.
The company has just raised £ 1.5 million in a round led by LocalGlobe, the VC fund established by Saul and Robin Klein, the father-son duo. Other supporters of the startup, include Tekton Ventures, TechStars Ventures, Seedcamp, Nick Hungerford (founder of Nutmeg) and Ian Hogarth (founder of Songkick). Cuvva raised a total of £ 2 million since it was founded in late 2014.
Ophelia Brown, general partner of LocalGlobe, said: ” The pay-as-you-go car insurance was a long overdue product in the UK, where drivers use their cars ever less. The fact that premiums do not capture such a change drive nuts! Cuvva simply understood that consumers have come to expect price transparency and flexibility in any other financial service, including their insurance.”
Cuvva is able to offer policies at a very low cost, having created a technology platform that mediates between companies and customers, with direct connections to third parties such as the DVLA. This allows the Insurtech company to cut off intermediary costs, creating customer-centric and flexible products.
The company is regulated by the Financial Conduct Authority and re-assured by Swiss Re, one of the largest reinsurers in the world