The founder of Peachy has told Health & Protection that the start-up health insurer expects to roll out its group product by early April 2023 at the latest and revealed why the firm designed its product deliberately avoiding intermediaries.
Late last month, Peachy completed a $1.6m funding round with backing from senior insurance industry executives including former CEOs of Bupa, Axa Global Health and the Chartered Insurance Institute (CII).
The start-up has been under development for three years and was launched by former NHS surgeon, strategy and mergers and acquisitions professional and senior executive at Bupa, Amit Patel (pictured).
The product is based as an online direct to customer experience which removes intermediaries from the traditional sales journey for private medical insurance (PMI) and does not use annual contracts and excesses.
Patel told Health & Protection that while the app has initially been launched at individuals, a group product will follow by spring of next year.
Sandbox limitations
According to Peachy it is so far the only health insurtech firm to be accepted into the Financial Conduct Authority’s (FCA) Sandbox programme that enables new companies with innovative propositions to go to market with real customers with the regulator’s approval and guidance.
But Patel revealed participation in the Sandbox has created limitations in terms of accelerating rollout of the product.
“We can’t go crazy because we’re in the FCA Sandbox,” he said.
“This is an environment provided by the regulator that allows companies that can demonstrate genuine innovation to launch in a real environment with authorisation. We’re in that sandbox so there’s certain criteria to that.
“We’ve got to deploy test plans, we can’t sell more than 250 policies, we can’t launch more than one product which is why right now we’ve launched the individual product, although technically, we’re an SME insurance product provider.
“Our target market is really micro and small businesses which does include one-person bands – that’s our market.
“Our Sandbox agreed with the FCA is currently six months and we can’t launch a group product until after the Sandbox which finishes in February. So it will be the end of quarter one or beginning of quarter two at the latest, we can expect the group product.”
Solving four issues
Patel explained that Peachy has been set up to solve four issues – product complexity, affordability, providing a digital rather than an analogue operating model and meeting demand from individuals aged 45 and under.
“Product, complexity, affordability and analogue servicing are the main reasons why people don’t buy products in that age cohort,” Patel continued.
“So, we want to create a product that is much more befitting to a millennial customer segment whether as individuals or where they sit in small companies.”
No need for brokers
Touching on the product’s operating model, Patel revealed it has been designed “front to back”.
“We’ve taken proposition and product and then built a digital business underneath it so you can get through our quote and buy journey in 90 seconds,” he said.
“We’ve effectively built an automatic distribution platform, so we don’t really need a middleman or a broker to explain what the product does because it’s quite simple in its own incarnation.”
To deal with the problem of what Patel dubbed a “superfragmented” customer journey in which people encounter different apps for different services, Peachy is entirely centred on a single application.
“You can see your benefits and understand what limits you’ve got,” Patel continued.
“You can chat to us in app. You can access your virtual GP, actually book with them and have the consultation within the app. You can make claims for small value items that you might go and get care for whether it’s mental health or physiotherapy directly in the app and we have a video selfie snap and claim journey.”
Configurable pricing
Alongside the ability to view any UK accredited provider the firm seeking to ease the appointment booking process.
“We’ve got 15,000+ providers in our application all rendered in a map based on your location,” Patel said.
“We’re starting to make the journey simpler plus there’s our first foray into digital booking. We’ve got a partnership with Ascenti which is the largest provider of physiotherapy in the UK. It has 300 locations around the country and within our app you can directly book into its footprint.”
The product also allows for configurable pricing depending on what the customer wishes to include.
“What that means is we can generate lower price points for the customer. We position ourselves as a provider of insurance that can generate price points that are as low as £10 or even lower depending on your age or where you live,” Patel said.
“We bridge the gap between low cost, low cover cash plan and high cost, high cover PMI. We just give more configurability and therefore more price options for the customer.”