Airbnb angels: Meet the start-up insuring the £140bn sharing economy
PUBLISHED: 09:26 07 August 2019 | UPDATED: 09:31 07 August 2019
Britain's sharing economy is set to explode in the next five years, growing 1,800% between 2025 and 10 years prior.
Contributors to the sector such as travel app Uber and accommodation listing website Airbnb will have pushed the value of the industry to £140bn by that year, growing 60% from 2016 to 2017.
And although 200m people checked into short-term accommodation in 2017, only 7% of insurers have policies to cover guest use of properties.
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This is where former Aviva consultant Louise Birritteri comes in.
Ms Birritteri launched sharing economy insurance firm Pikl in 2016, having spotted a gap in the market.
Three years on the company has completed a £2m investment round, partially funded by Direct Line founder Sir Peter Wood.
The team has grown from a team of five to 20, with in-house underwriters as well as product development specialists.
The company is currently focusing on the home insurance market, particularly the UK's 170,000 Airbnb users, as bricks-and-mortar insurance hasn't been able to keep up with the online economy.
Ms Birritteri said: "If you need to do any short-term peer to peer sharing of an asset it isn't covered under a traditional policy, the insurance industry hasn't caught up. Back in 2016 when I was going to insurers to get backing I was being asked what Airbnb was.
Even today it's still considered quite niche and most companies don't know very much about it."
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Ms Birritteri said traditional insurers also expected customers to realise standard policy did not cover commercial lettings.
When Pikl surveyed 90% of insurers earlier this year all of them said they required their customers to tell them if they were sharing accommodation.
However, according to Pikl's survey, less than 30% of hosts had told their insurers what they were doing.
Ms Birritteri said: "A lot of work needs to be done to inform customers that they're not covered by their insurance.
"I've been campaigning for there to be an introduction of a question in quote journeys on comparison sites which ask people whether or not they're on Airbnb because there's too much assumed knowledge that consumers understand they're not covered on their policy."
As a result Pikl has created two product lines: one for individuals using a sharing economy platform, and one for the platform itself.
The team have three distribution channels: direct sales through the website, wholesale to insurers and insurance brokers who can sell on the service, and partnerships with sharing economy platforms.
"We're able to do this because we're all from an insurance background. We're all highly skilled in terms of pricing and underwriting and so we can set up an MGA, managing general agent, who is an in-house underwriter so we're like a mini insurance company," explained Ms Birritteri.
Working with a single platform also means the company could enter into new territories.
"We value the UK sharing economy insurance market at about a billion by 2025, but the sharing economy has massively grown across Europe and the US because connected device use allows us to access services from anywhere," Ms Birritteri said.
Ms Birritteri added that the Norwich-based company is happy where it is, but that subsidiary offices in London and/or Manchester could be on the cards.
"I love Norfolk, the head office will stay here," said Ms Birritteri. "Obviously there's a pool of talent in Norwich because of Aviva and firms like Alan Boswell, but that will run out. Manchester also has a strong skill in insurance, and a London office would make sense for its convenience."