As Private Secretary to the Secretary of State for Trade and Industry, Megan Bingham-Walker advised the UK government on energy policy. The Cambridge graduate has also sourced and exited venture capital deals, co-founded a machine learning start-up, and run her own consultancy; alongside acting as a trustee at international water charity Pump Aid.
But it was a side project selling stainless steel straws online (named “The Last Straw”!) that opened her eyes to the insurance issues facing ecommerce merchants. The solution, she believes, lies in data.
Continuous data to the rescue
During her venture capital days, Bingham-Walker had become interested in using data to improve efficiency and develop more automated ways of doing things. So when she noticed the insurance industry using data – particularly continuous data – this piqued her interest.
The industry has historically relied on static data collected at specific points in time, such as when applying for insurance or making a claim. This has meant that insurers have had to base their decision-making on limited and infrequent information, and offer “one size fits all” products.
Continuous data, in contrast, can provide a steady flow of information that enables insurers to track risks in real time and make more informed decisions. For example, the installation of “black boxes” in cars to monitor speed and breaking helps motor insurers gather information on driving competence. As a result, insurance companies can offer personalised premiums that reflect the likelihood that an individual driver will have an accident.
Helping insurance mirror ecommerce dynamics
Drawing on her online selling experience, Bingham-Walker came up with the idea of using continuous data to tailor ecommerce insurance to the needs of online merchants.
Having been a “small seller” herself, she knew that insurance can be expensive for someone just starting out, particularly when revenues are uncertain. Additionally, businesses can scale up quickly, particularly when selling on platforms such as Amazon or Shopify.
And, to complicate matters further, over 60% of Amazon sellers that Anansi talked to changed the products they sold as often as once a month, in order to take advantage of market dynamics. From an insurance perspective, changing from one product category to another affects the associated risk in selling the product.
Taking the pain out of the process
Bingham-Walker notes that, while it’s possible to set up a Shopify online store within minutes, arranging insurance remains a time-consuming process. First comes the search for an insurance broker, then the need to fill out a generic application form, followed by yet another form in the event of a claim.
This procedure requires the online seller to navigate an administratively heavy process that often requires them to provide the same information more than once.
It also restricts the information that the insurance company has on its customer to the static data gleaned from the customer’s application or claim form.
Blowing away the cobwebs from ecommerce insurance
Together with her technical co-founder and remote team, Bingham-Walker is building a platform that removes the administrative burden from the online seller, and gives the insurance company real-time visibility into customer activities.
Anansi’s platform is designed to connect into ecommerce platforms such as Shopify or Amazon in order to pre-populate insurance forms with information such as seller, business, product, transaction and delivery details.
Automating shipping loss and delay claims
The company’s first product addresses the issue of online orders being delivered late, or not at all. “Off Course” removes the need for online sellers to fill in and submit claims forms if items fail to reach customers as promised.
Instead, the insurance company can track packages in real time throughout their journey from despatch to delivery. If an item is delayed or goes missing, the claims process kicks in automatically. The seller is relieved of tedious and time-consuming claims processes, and the insurance company has accurate, up-to-the-minute information.
Ecommerce is global, but insurance is local
Currently, the Anansi team is in the process of integrating with insurance partners. It is starting in the UK with La Parisienne, and is in talks with other insurers to serve markets around the world. Bingham-Walker explains that, while Shopify has merchants in over 175 countries1, insurance remains very much a nationally regulated business, meaning that local partners are key.
(Shopping) bags of potential
Anansi is starting small but thinking big, with plans to explore other issues such as payment fraud, chargebacks, supply chain disruption, business interruption, returns and product liability insurance.
Given that Retail Economics forecasts online sales will make up 53% of total UK retail sales by 2028, from 19.2% in 20192, Bingham-Walker sees plenty of scope for growth.
Weaving a web of knowledge
She says Anansi differentiates itself within the small business insurance market by “Trying to be more deeply embedded where people are already managing their business, and also trying to be much more automated” by capitalising on existing data.
In weaving a web of knowledge in the form of data, the insurtech is reminiscent of the spider Anansi, which is known in African folklore as the spirit of all knowledge.
1Shopify (2020) Shopify Provides Business Update Relating to COVID-19 [Press release] 1 April 2020. Available at: https://investors.shopify.com/Investor-News-Details/2020/Shopify-Provides-Business-Update-Relating-to-COVID-19/default.aspx (Accessed: 6 April 2020)
2Retail Economics (2019) The Digital Tipping Point, p. 6.Available at: https://www.womblebonddickinson.com/sites/default/files/2019-07/WBD_Retail-Report_0.pdf (Accessed: 6 April 2020)