How do you get talented engineers to work for a startup in a mundane field at a time when more exciting companies are paying well and hiring aggressively? Here’s an answer from one insurance startup out of Poland called Ominimo: make pay competitive, yes, but more importantly, give those engineers the license to apply their talent and reinvent how the field works.
Launching bootstrapped just 12 months ago, Ominomo believes it’s found a different and better approach to understanding and pricing risk. It’s already profitable and growing fast, with 300,000 policies signed up in its first market of Hungary. Now, to fuel its next stage of life, it’s taking its first outside investment from a strategic backer, Zurich Insurance Group.
TechCrunch understands from sources that Zurich is making a €10 million equity investment (around $11 million) for 5% of the company, valuing Ominimo at €200 million ($220 million). Neither Ominimo nor Zurich commented on the amount invested but both have confirmed the valuation.
Ominimo’s funding is coming at a time when one of the most well-known and well-capitalized insurance startups in Europe — the once-unicorn WeFox — is selling off parts of its business and picking up lifeline financing to keep from going under.
That serves as both a cautionary tale about how to grow an insurance business, but also a clear opportunity. Arguably the reason WeFox grew so fast was because of demand in the market (both from consumers and investors), if only that demand wave could be surfed without wiping out.
Ominimo is already profitable in its current business, but it’s arguably a modest effort. Today Ominimo is active in just one market, Hungary, and focuses on just one kind of insurance, car insurance for consumers. The plan is to replicate its model to more geographies and categories. Will will expand into more than 10 more new markets, starting with Poland, Sweden and the Netherlands — using Zurich as its risk carrier, with Ominimo becoming a broker, specifically a managing general agent, for Zurich. Ominimo is focusing initially on automotive insurance but intends to add property to that over time.
Dusan Komar — Ominimo’s CEO who co-founded the company with Dennis Weinbender (now chief pricing and data officer) and Laslo Horvath (CTO) — saw the challenges the insurance industry faced first-hand when he worked for McKinsey. Major insurance firms, he said, were stuck because of three main issues: rigid, legacy systems that were challenging, if not impossible, to use to launch new services quickly, and to use with newer innovations like AI-based pricing; slow decision making processes at the corporate level; and talent.
“No brilliant software engineer or data scientist dreams of working for an insurance company,” he said.
McKinsey and others like it typically get called in to try to fix all three at once. He and his team would, he said, build new products from the ground up and “hand over the code” to the insurance client. “It worked to some extent, but not as perfectly as well would have hoped.”
Out of that came the inevitable: taking a cue from the worlds of fintech and other insurance startups, Komar and his two co-founders saw an opportunity to develop a product as their own company rather than for a client, using APIs to plug in features and functionality from other providers that it might not built from the ground up itself; and that is how Ominimo was born.
The crux of what Ominimo is doing is applying some AI-based reasoning around big-data analytics. When building and pricing an insurance quote, a traditional insurance company might use five or six main parameters (person’s age, person’s economic bracket, type of vehicle, past driving history, location of car) to determine a price. A newer insurer might add another 10 or 15 parameter to that.
“But there are some not-so-obvious variables that are actually super important,” Komar said. For instance, once you get a license plate of a vehicle, you can actually tap into a database, he said, which gives you 100 different variables about the vehicle, including length and height and width and weight of the vehicle. “It’s interesting, for instance, to see that data shows a very strong correlation between the length of the car and the frequency of accidents during parking,” he said.
Ominimo takes all of these details, plus population density and more, into account when it’s going through its calculations.
There are, of course, a lot of insurance startups in the market already that tout the use of AI across their platforms, both for decision-making in the back end and to improve customer experience at the front end. (Ditto the existence of dozens of startups in fintech, the close sibling of insurance tech, that also lay claim to being built on AI.)
Komar’s response to this is that Ominimo’s track record speaks for itself. “I think what really matters is actually performance in the market, so if you compare our performance to Lemonade’s [a key competitor], you will actually see the difference,” he said. He claimed that Ominimo’s “loss ratio” is below the market average, and it’s already picked up a market share of 7% in Hungary, the sole country where it’s launched.
As with a lot of the neobanks in the market — fintech and insurance really do have a lot in common — many of the “new” insurance players in the market are doing less disruption under hood as they are creating a more modern user experience.
“There is a difference between claiming to do data science in terms of risk assessment and actually doing it,” he said. Many startup competitors, he believes, “have actually focused on superior customer experience, very nice front ends, very lean and intuitive journeys, but there was not a lot under the hood.”
Giving talent a place to do the kind of work they want to be doing, he claimed, is how they’ve attracted and retained key people. “We have eight medalists from mathematics and physics olympiads [prestigious competitions in these fields] among our data science team,” he said. “These are really brilliant young minds who now, for the first time, get to deploy their full potential on a global scale. And this really shows in the KPIs that we see.”
That is also what attracted its new strategic investor, which is looking for more diversified ways of bringing on new waves of customers.
“Growing our retail business profitably is a key ambition in Zurich’s 2025–2027 cycle. That is why I am delighted with DA Direkt’s distribution partnership with Ominimo, which will allow us to offer innovative motor insurance solutions and expand our retail customer base in Europe, beyond the markets in which Zurich is already present,” said Alison Martin, CEO Europe, Middle East and Africa at Zurich Insurance Group, in a statement. “I am also pleased we are strengthening our relationship with a minority stake in Ominimo.”
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