Q&A, Scaling Enterprise FinTech

Scaling Enterprise FinTech: Christian Macht of Element Insurance AG

1.​ Tell us a bit about yourself and your company.

ELEMENT Insurance AG is a white-label product supplier for insurance solutions and a leader in insurance digitalisation. We are licensed as a direct insurer for non-life insurance, which enables us to act as a risk carrier, including claims settlement. Founded in March 2017, ELEMENT offers a unique technology platform (‘Insurance as a Platform’) with a focus on the B2B2X value chain: ELEMENT develops for its roughly twenty partners from various industries – from e-commerce to established insurers – custom-made, innovative white-label insurance products at record speed. These products are then marketed by the partners under their own brand.

 

2. ​Give us the backstory- how did you get the founding idea, and how did the first sale come about?

ELEMENT has been founded by fintech ecosystem finleap. After researching the insurance market, it quickly become obvious that the insurance business is lacking in its IT capabilities, but also excels for example in distribution and customer service. As a licensed insurance company with a tech focus, ELEMENT’s platform enables the insurance industry and companies beyond to offer fully digital insurance solutions, while leveraging their own strengths. We created our first product together with Signal Iduna, a German insurer and key investor .

3.​ Could you summarize your journey to scale from a sales, go-to-market and business development perspective, perhaps split into 2-3 key phases?

In the early days of ELEMENT, we created individual products with our partners – while still exceeding the industry’s average go-to-market of about 12 months – usually, it took us about 3 months. Now, about four years later, we rather focus on creating key insurance products first, and then rolling them out on the market, as we are currently doing with our pet cover suite. This increases our go-to-market drastically, to an average of 3 weeks.

4.​ Which was the most challenging phase, and what would you have done differently?

In the beginning, our learning curve was incredibly steep due to the insurance industry’s incredible complexity. In this phase, we learned a lot from our partners we created insurance products for, but of course made some mistakes. In hindsight, we could for example have built certain parts of our product platform differently – but that’s something we learned from, so it comes at no regret and has already been rectified.

5. When did you decide to expand to the international/ US market, and how?

We are currently focusing on the German market, as its still far from saturated.

 
6.​ When did you first decide to raise venture capital, and what has been your approach to financing growth over the years?

The intricacies of the insurance business require a certain amount of capital even before you start and then again for every scaling process. Raising significant capital early was thus an absolute requirement; we have raised EUR 50m so far already.

 

7.​ How is building an Enterprise FinTech firm different from a “regular” SaaS / Enterprise Tech company, and what three things should founders get right?

As mentioned in the previous question, there are a ton of additional requirements when building a regulated company. But this also enables us to work directly with the insurance industry or offer end-to-end solutions to the market, which isn’t always possible for a ‘regular’ tech company due to regulatory restrictions.

8. ​What’s on the priority list for you and your team for the next year?

We are currently focusing on key product areas such as pet and bike covers, where we offer clear advantages to existing solutions. With these versatile and flexible white-label products, we will onboard a larger number of partners, distributing them to their respective[CM2] customer bases.

9. ​Where is the financial services sector headed in the next 12-18 months, and what should we be watching out for?

For one, collaborations between fintechs (or insurtechs in our case) and the traditional industry will increase. That’s something which will be a win-win for both sides. Also, regarding products, we expect more and more embedded insurance offers for customers – for example like the cyber cover we have created for Vodafone last year. It is available through an app-like purchase flow directly and can be natively acquired by the customers on their smartphones on the go.

10.​ Your favorite place(s) for a meal, coffee or drink (pre-COVID19)?

We have an amazing roof top terrace on top of our offices, overlooking all of Berlin. This is an amazing spot to watch the sunrise [CM3] with a to-go coffee – and feasible even socially distant