A Cape Town based start-up has been selected to be part of Plug and Play programme in Silicon Valley. Hepstar assists airlines, online travel agencies and car hire aggregation companies to improve travel insurance sales via their existing sales channels using its e-merchandising technology.
"Hepstar was founded in late 2013 as an insurance consulting company. During the course of 2015 the inefficiencies in the market provided sufficient basis for the company to pivot towards technology. We use data analytics to understand customer behavioural trends towards travel insurance, then we recommend and personalise products in real-time using that data and in so doing are able offer the end user the most suitable personalised product. The travel merchant then increases their additional revenue from commissions through the elevation of the travel insurance take-up rates. Generally, we charge a performance-based fee linked to the increase of insurance revenues," explained co-founder and chief operating officer Claudia Snyman.
Snyman adds that the opportunity to be part of the top 20 start-ups handpicked for the program from over 1 000 applicants globally is a big honour. "Plug and Play is the most active investment organisation in Silicon Valley, with portfolio companies including PayPal, Dropbox and Skytree. It is in fact the largest by investments. With partners like Turkish Airlines, Carlson Wagolit, TUI Group, Lufthansa and jetBlue Technology Ventures it provides a great opportunity to showcase our capabilities to some of the largest players in the travel sector."
The company was initially was funded by an 'angel investor' who is still a majority shareholder and later received a $2 million investment last year from Amadeus Capital Partners using its Digital Prosperity Fund, backed by the MTN Group.
According to Snyman the start-up is challenging the status quo of insurance, particularly travel insurance. She says the common practice in the industry is to offer one standard travel insurance product to all customers (during a flight ticket booking process) without considering the risk profile of each customer. "Unfortunately customer expectations are changing drastically. Online sales is climbing fast - specifically in the travel retail space - and millennials are steering the ship. This new generation of customers expect businesses to interact with them on a personal level. They want to know that a company is paying attention to their specific needs. Many travel retailers have recognised this need and have identified the personalisation of services as an important part of their overall strategy."
Unfortunately, adds Snyman, the majority are failing to implement the vision due to technology and resource limitations. "Technology companies like us are therefore welcomed by airlines and travel agencies they help them to deliver a personalised product offering and differentiate themselves from their competition. An emphasis on personalisation, e-merchandising strategies, data analytics and machine-learning fuels this disruptor and makes us not just a serious player, but quite possibly the company destined to set the standards in this niche space."
As part of its growth strategy for 2017, Hepstar aims to complete the on-boarding of travel retailers and insurance providers already signed up. Says Snyman: "We are also looking at improving current and developing new features using a skunkworks approach. We will conduct ongoing prototyping with prospective travel retailers to test the feasibility of new features prior to conducting development. Despite being early adopters of our technology, we aim to acquire clients that will provide a reputable reference for proof of concept and put us firmly on the map as the top travel insurance merchandising engine to work with," Snyman noted.
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