Startup InsurTech Award - Laka

1. August 2018
Tobias Taupitz
tobias@laka.co.uk

2. Interests are misaligned in insurance – customers always get the
short end of the stick, causing friction.

3. Laka turns the current model on its head and introduces crowd
insurance powered by the community.

4. First product: theft, damage and loss cover for high-value bicycles
launched in the UK in January 2018.

5.  Customers join a group of like-
minded people, e.g. cyclists
 No premiums charged upfront
 Claims are filed through our app
for quick settlement
 We pay out claims from
designated working capital
(provided by insurance partner)
before premiums are collected
 Laka adds up all the claims paid
out, adds a service fee and splits
the bill pro rata among the group
 Customers are protected from
high payments through an excess
of loss (XOL) provided by
insurance partner
1 2 3
The mutual insurer of the future: customers benefit from fewer
claims, not the insurer.

6. Year-to-date, an average customer has saved £95.8 in premiums
compared to our competitors. No claims, no pay!
£18.0 £18.0 £18.0 £18.0 £18.0 £18.0 £18.0
NIL NIL NIL
£7.2
NIL
£9.1
£13.9
Jan' Feb' Mar' Apr' May Jun' Jul'
Competitors Laka
With Laka, customers have saved 74% compared to market rate
Average bike value on Laka platform is £2.2k. Savings based on mean premium of five UK bike insurance brokers.

7. ONBOARDING ADMINISTRATION CLAIMS HANDLING
Laka manages onboarding, administration and claims handling
through its proprietary web app.
OUR PLATFORM IS READY TO PLUG AND PLAY – NO TECHNICAL INTEGRATION REQUIRED

8. Alternative data sources give us deep insight into customer
behaviour, allowing risk tiering based on individual risk profiles.
APP USE DATA
SOCIAL MEDIA DATA
BEHAVIOURAL DATA
New Joiner
Silver
Gold
RISK POOLS
Unproven customers;
XOL set higher initially
Proven better risks;
grouped together for
lower claims profile
Customers save money by
sharing data
GAMIFIED USER EXPERIENCE TO INFLUENCE CUSTOMER BEHAVIOUR

9. Regulated as an intermediary, Laka partners with insurers. We offer
fee-based income to replace underwriting income.
Provides working capital &
XOL
Receives a variable share
of Laka’s fee and a fixed
fee per policy for XOL
Pay full cost of claims at
month end (up to XOL),
plus 25% fee on top
We settle claims during
the month with working
capital
InsuranceCompany
Intermediary (MGA)
Customers

10. FCA Sandbox
2nd cohort
Fellowship
Programme
’16-’17
InsurTech
Accelerator
‘17
FinTech
Fund ‘ 17
(Legal Grant)
Pre-seed
Round
BIA Finalist
Start-up of the
year ‘18
Graduation
from
Sandbox
Partnership
with Zurich
Seed
Round
(£1.1m)
Against the odds: launching an unprecedented business model with
the support of a strong eco-system.

11. Additional
Takaful insurance
proposition developed
jointly with local partner
Pre-Seed Seed Series A
etc
Laka model can be applied to all short-tail risk products (high claims
frequency, low severity). Expansion to SEA under way.

12. Tobias Taupitz
CEO & Co-founder
Jens Hartwig
CPO & Co-founder
Ben Allen
CTO & Co-founder
Jack Gardner
Snr. Software Engineer
Steph Fernandes
Marketing & Design
Lorraine Mullins
Head of Compliance
Henry Blauth
Data Analyst
Calum Gardner
Snr. Software Engineer
[TBA]
Marketing Lead
Penny Penati
Operations Lead
[TBA]
Insurance Lead
Operations Product & Marketing Tech
Zaryl Tan
Director Malaysia
Felix Crocker
Jnr. Software Engineer
Behind Laka is an experienced, multi-disciplinary team with
backgrounds in insurance, product and tech.
Jonathan Ramm
Partnerships Lead
[TBA]
Frontend Dev.

13. Appendix

14. HOW IT WORKS - EXAMPLE
 Customers onboarded
 No premiums paid upfront
 Claims settled instantly through
working capital
 Each member of risk pool pays a
fraction of claims cost – up to a cap
1 2 3
 Customers (cyclists)
onboarded: #1,000
 Average value of bicycles:
£3,000
 No premium upfront
 Number of claims: #10
 Average cost of claim: £2,000
 Claims are settled instantly
during the period through
working capital loaned by
re/insurance partner
 Total cost of claims of risk pool:
£20,000
 Fixed fee (25% of cost of
claims) added: £5,000
 Total cost of £25,000 split by
1,000 customers i.e. £25 p.p.
 Customer’s exposure capped at
e.g. £30 through Excess of Loss
agreement
COVER FOR HIGH-VALUE BICYCLES (THEFT, DAMAGE, LOSS) AS PROOF OF CONCEPT

15. CONTRASTING MODELS
New world (Laka)Old world
Claims ratio
Expense ratio
Underwriting margin
Main business risk
Impact of 1 additional
settled claim on profits
67%
30%
3%
100%
25% of
settled claims
n/a
Administration fee n/a
Underwriting risk Credit risk
Basis Premiums Claims
n/a
Payments due Beginning of period End of period
Benefits
 Revenues linked to
settled claims
 Transparency
 Accuracy
 No incentive to
manage against
customers - interests
are aligned
Dependent
on ancillary
income

16. FRICTION POINTS IN TAKAFUL INSURANCE
 Traditional insurance models require premiums paid upfront
 Collected premiums are put into a reserve pot until released to settle claims
 Meanwhile, premiums are used to generate interest income
 Interest income is not sharia compliant
Overview
 Several workaround offerings available, however not widely accepted and generally more
costly
 As a result, insurance penetration rates, usually a sign for prospering societies, are below
average in countries with large Muslim populations
Result

17. THE LAKA SOLUTION
 No more premiums upfront
 Laka asks customers to contribute a fraction of the cost of claims incurred in a month – up to a
defined cap
 Cap provided through Reinsurance / Retakaful or alternative protection structure
 Transparency and mutuality aspects aligned with strong sense of community in Islamic culture
 Laka adds a management fee on top of settled claims and as such only generates revenues
when paying out
 Reversed payment structure prevents interest income
 Positive signalling on Sharia compliance from scholars
How Laka works
Laka reduces friction in Takaful insurance significantly

18. Tobias Taupitz
tobias@laka.co.uk