Ctrl CEO says Santam investment will give the insurtech two to three years runway

SA short term insurer Santam’s investment in Cape Town based digital insurance broker Ctrl — announced late last month — will give the insurtech enough runway for the next two to three years says Ctrl CEO Pieter Venter.

The announcement of the deal was first reported in a story on SA tech news site TechFinancials on 31 January.

In a phone call with Ventureburn today (14 February), Venter (pictured above, far left) declined to disclose how much the financial services giant had invested in the startup. He however said the multi-year funding deal will see Santam acquire a “minority stake” in the startup.

Venter founded Ctrl in 2017 with co-founders Pieter Erasmus and Francois Venter. The insurtech aims to simplify insurance by giving consumers advice on insurance products in a way that Venter said provides value to both consumers and insurers.

Digital insurance broker Ctrl was founded in 2017 by Pieter Venter, Pieter Erasmus and Francois Venter

Venter said the deal, which was concluded late last year, had come about after a meeting the startup had with the Santam in July last year.

He said Ctrl had been fundraising for most of last year and that other than the short-term insurer, the startup had also secured funding from an angel investor (he declined to say how much this was and from who exactly it was from).

The capital injection, Venter explained, will help Ctrl scale faster and will help the startup to grow its team. Some of the funding will be spent on improving user experience (UX), the user interface (UI) and machine learning to optimise Ctrl’s algorithm.

Venter attributed startup’s founders’ career capital, maturity and industry experience to have played a role in the startup securing the deal with Santam.

The founders have between them worked in the insurance industry holding roles in corporate and investment banking, sales and marketing as well as in the actuary field for firms like Absa and Momentum.

‘Cumbersome to get quotes’

Venter said the three co-founders had seen how banks had been quick to react to disruption by fintechs by collaborating with them, while insurance companies on the other hand “took longer” to work with insurtech startups.

He said the trio had researched customer pain points in the insurance industry and found that customers “found it cumbersome to get quotes” and that people were generally tired of calling call centres for information on insurance products. In addition, he argues that it is difficult for consumers to compare and “get the right advice”.

It’s why the three co-founders decided to come up with an algorithm that would assist consumers to have at their disposal such information.

Ctrl’s algorithm, he explained, takes into account all the information around a client’s insurance needs that they provide before it makes a recommendation for an appropriate insurance product.

Ctrl’s app — which last year won the Best Financial Solutions category at the MTN Business App of the Year Award — is currently in beta testing with about 600 early-registered users. Venter expects it to be launched to the public “next week”.

Although the app is free to download, Ctrl earns 12.5% commission on car insurance products and up to 20% on other products that users accept quotes for.

‘Ring fences and Chinese walls’

Venter explained that the startup had been set up as a holding company that includes Ctrl Investment Holdings, Ctrl Financial Intermediaries and Ctrl Technologies. Santam, he pointed out, invested in Ctrl Investment Holdings.

He explained that the way the startup was structured had put up “ring fences and Chinese walls” that insured independence from insurance partners. In essence, Santam’s investment will not affect Ctrl’s recommendations, he said.

Venter emphasised that Ctrl, unlike other startups in the insurtech space, has no intention to be an insurer adding that the startup is “solely focused” on the intermediary and broker space.

Featured image, left to right: Ctrl team Pieter Venter, Pieter Erasmus and Francois Venter at the 2018 MTN Business App of the Year Award (Ctrl-your insurance advice app via Facebook)

Editor’s note (14 February 2019): Ctrl CEO Pieter Venter subsequently emailed Ventureburn to clarify that the commission that Ctrl earns is statuary commission and therefore no different to what brokers charge.