Insurtech start-up Granadilla says it has experienced positive growth across various indicators, one year since it was introduced to the South African market.
Launched in July 2018 by founder and CEO Jonathan Walker, Granadilla provides single-asset and on-demand insurance through its mobile app, on consumer products including smartphones, tablets, laptops, smartwatches and travel insurance, as well as cyclist insurance.
Underwritten by Bryte Insurance, the insurtech app has notched up 30 000 downloads across Android and iOS platforms. The start-up has witnessed a 454% increase in user numbers and a 111% increase in insurance policies sold in the second quarter of 2019.
Its second quarter gross written premiums have also seen an increase of 102%, up from 87% in the first quarter of 2019.
“Disrupting the way insurance is sold continues to be an exciting challenge,” says Walker.
“Granadilla’s growth has exceeded expectations, and we’ve consistently enjoyed strong growth figures across all three growth metrics, since the start of the year – proof that the demand for do-it-yourself, cost-effective, app-based insurance is on the rise among South African consumers.”
Granadilla combines artificial intelligence (AI), machine learning and chatbots with a cost-effective business model, allowing the company to sell insurance that is price-competitive, and that can be sold instantly online.
According to Walker, the idea behind Granadilla originated when his phone and laptop were stolen. Claiming from his insurance provider was so challenging that he decided to develop an app that would put an end to the pain of insurance claims.
Granadilla promises to provide clients with instant app-based insurance that adapts to their lifestyle and takes the difficulty out of claims, he explains.
“AI and machine learning are core to the business and its operational model. This means there are no endless waiting periods because of poor customer service, no complicated processes, no human intervention that will put customers on hold, fewer overheads, and ultimately, more affordable premiums for customers,” Walker points out.
Banks and financial institutions across the globe are witnessing transformation with the emergence of fintech vendors, disrupting the traditional model of insurance operations and processes.
According to a report by Juniper, fintech platform revenue derived from supporting the insurance industry will reach almost $235 billion globally by 2021, indicating a 34% year-on-year increase.
Research firm ResearchAndMarkets says the global insurtech market was valued at $532.7 million in 2018 and is expected to reach $1.119.8 billion by 2023, growing at a CAGR of 16% during the forecast period.
Some of Granadilla’s competitors in the local market include Johannesburg-based insurtech start-up Pineapple, digital insurance platform Root, Naked insurance and Simply Financial Services.
New functionalities
Granadilla recently enabled functionality that allows new customers to set a future policy start date, which the company says has become popular among new customers.
The feature allows consumers who know they will be getting their new smartphone on a particular date to administer insurance cover for it in advance.
The start-up says it is the first insurtech company in SA to introduce insurance catering specifically to gamers. Gamers can get cover for gaming consoles, gaming rigs, virtual reality headsets and headphones.
“As a result of customer feedback, Granadilla will also be releasing functionality that allows users to take out cover for someone else, be it an employee, relative or friend,” notes Walker.
Product trends
In terms of Granadilla’s product offerings, the company says the majority of its customers have one policy, but that is slowly changing as more people add second or third cover for their products.
Most customers (82%) have one item insured, while 12% have two policies. Three policies have been taken by 3% of the customer base. The most policies held by clients is seven.
Smartphone cover is the most bought product, followed by travel cover and laptop cover. The average value of insured trips under its travel cover product is R69 222, and for jewellery items it is R26 441. Average laptop cover is valued at R19 509, while an average camera is covered for around R16 611, according to the company.
Wim Morland, executive head of insurance partnerships at Bryte Insurance, comments: “Granadilla has carved and maintained a strong presence in the South African market. Over the past year, we have witnessed the company transforming how consumers access insurance, as well as how they engage with it. Innovation, relevance and creativity in how we communicate to our target audiences is key to effectiveness within the insurtech space, and how it is disrupting the traditional insurance model has proven to be exciting.”
Granadilla says it has developed a few technological ‘proof of concepts’ which will help it open up to new markets, as the company eyes expansion opportunities.
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