The insurance industry has long relied on algorithms and formulas to tailor services and pricing for specific customers. However, this age-old practice conceals its shortcomings, as it often fails to accommodate non-conventional profiles, leaving customers without access to competitive rates.
Now, UK-based Marshmallow, which aims to take on the larger legacy insurance giants with a new approach to determining risk, has landed a £15 million 3-year revolving credit facility from Triple Point Private Credit, one of the largest non-bank lenders in the UK, which backed Bike Club.
The credit facility will help Marshmallow expand its products to a broader range of customers, primarily in the motor insurance sector, and take on additional dilution to shareholders.
To date, Marshmallow has raised a total of nearly £100 million in funding with the previous $85 million Series B raise in 2021, which helped it attain unicorn status with a valuation of over $1 billion.
“We have held conversations with Marshmallow’s management for some time about how we may help them with their funding requirements and are excited to be working with a management team that have successfully launched and scaled an insurance business so impressively,” said Gavin Maitland Smith, Head of Structured Finance, Triple Point.
“More importantly, their commitment to increasing affordability and accessibility for underserved segments of the community mirrors Triple Point’s purpose-driven approach to investing,” he added.
What sets Marshmallow apart from other insurtech players?
Founded in 2017 by identical twins – Oliver and Alexander Kent-Braham alongside David Goaté, Marshmallow offers insurance to underserved customers such as migrant workers, individuals with poor credit histories, and young drivers.
The UK insurtech also offers several features that set it apart from traditional insurance providers. These features are as follows:
Marshmallow uses a sophisticated underwriting process that takes into account a wider range of factors beyond traditional demographics. This approach allows them to offer coverage to individuals who may have been overlooked or faced higher premiums based on factors such as nationality, occupation, or educational background.
In addition, Marshmallow harnesses the power of advanced technology and data analytics to provide more accurate risk assessments. By leveraging machine learning algorithms, they can offer personalised quotes based on individual circumstances, resulting in fairer and more tailored pricing for their customers.
Also, Britain’s first-ever black-owned unicorn prioritises delivering a seamless and transparent customer experience. Their online platform enables customers to obtain quotes quickly and easily, without the need for lengthy phone calls or paperwork. Policy documents and terms are presented in a clear and concise manner, ensuring transparency throughout the insurance process.
By leveraging an advanced underwriting model and technology-driven approach, Marshmallow aims to provide affordable insurance premiums. It offers competitive rates to customers, particularly those who may have been previously excluded or faced higher prices due to factors unrelated to their actual risk profile. In addition, Marshmallow places a strong emphasis on customer satisfaction.
To top these, the insurtech company embraces the digital revolution, offering a fully digital and user-friendly experience. Customers can manage their policies, make changes, and file claims through the Marshmallow mobile app or online portal, providing convenience and accessibility.
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