Home / Daily / Car insurance disruptor Koba clinches funding for 2021 launch
2 December 2020
Car insurer Koba is on track to introduce its kilometre-based motor insurance in Australia next year after successfully completing a first funding round.
The pay-as-you-drive, connected motor insurance was supported by Insurtech Gateway Australia and the Hunter Equity Group in a $250,000 funding round.
Founded by Andrew Wong, Koba will use a technology platform from the UK to create its flexible, pay per kilometre car insurance offer which is aimed at low-usage drivers who can connect directly through their driving app, an on-board device or smart phone.
Mr Wong, who has returned to Melbourne after some time in Silicon Valley, says the idea for Koba arrived with the COVID-19 pandemic and a desire to disrupt and “change up” the car insurance industry. Koba is still looking for underwriting capacity and is “eager to work with innovative and forward-thinking partners to disrupt the personal car insurance market.”
“We realised that there was a flaw in the traditional car insurance offer. We were all locked down for months, not driving, and had virtually no risk to the insurer... yet we were still paying for insurance like we were.”
Koba is a fairer solution, he says, which offers low usage drivers transparency in pricing, satisfies a desire for cheaper insurance and also maintains stable margins for insurers. International peers have achieved sustained claims frequency at less than half market rates.
“It ticks all the boxes,” Mr Wong says.
Insurtech Gateway Australia CEO Simon O’Dell said he was backing Koba after a third of Australian drivers surveyed during the design phase of Koba said they would strongly consider switching to a per-kilometre offer.
Analytics firm Mckinsey has estimated 90% of all new cars sold by 2030 will be pre connected to the internet and Tesla, General Motors and Ford have already launched insurance offers.
Australia is “behind the curve on this one,” Mr O’Dell says. “We are seeing global markets adopting the connected car faster than expected.
“We are near a tipping point in the car insurance industry and Koba is uniquely positioned to drive the change in Australia.”
Koba's founding team has worked across corporate and start up insurance brands in Australia, US and UK and says it offers “start-up style determination” balanced with proven commercial scale and experience.
“We want to unlock the most relevant data that creates better risk models and use AI and machine learning to drive operational and efficiencies in claims, fraud detection, and risk segmentation,” Mr Wong says.