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Marshmallow now offers car insurance to expatriates aged between 21 and 50. The company has pledged to focus on less affluent customers especially those with lower credit scores.
UK-based insurance startup, Marshmallow that was founded by identical brothers has announced a $30 million funding in its latest round. This funding jas brought its total valuation to around $310 million.
The insurance company is intending on venturing away from traditional insurance services to have a better competitive edge in the market.
Marshmallow Performance before Its Funding Round
According to news outlet TechCrunch, Marshmallow intends to further its business in more countries in the next eighteen months. Primarily, the startup intends to take advantage of the fact that most traditional insurance companies do not have proper logistics in place to offer competitive insurance covers for immigrants and people with minimal driving history.
According to Oliver Kent-Braham, the co-founder and CEO of Marshmallow, existing car insurance companies study the past driving habits of the driver, and also their lifestyle before issuing any car cover.
“Unfortunately, a lot of insurers don’t attempt to understand foreign drivers living in the UK, instead they just overcharge them. UK-based, foreign drivers can expect to be quoted prices that are 51 percent higher than the market average,” he explained.
Marshmallow now offers car insurance to expatriates aged between 21 and 50 years. The company has pledged to focus on less affluent customers especially those with lower credit scores. This is because the company has identified that they are charged more than other customers based on their status.
Notably, Marshmallow did not disclose the people involved with the latest round. However, it did state that one is a prominent fintech backer and another a well established financial institution.
Insurance Industry amid Coronavirus
The car insurance industry is expected to take a huge change to not only maintain their revenues during the pandemic but also increase their point of collection in the future. With most people resorting to staying at home, working remotely and using e-commerce sites to order daily needs, it will reciprocate to fewer drivers on the roads.
As a result, accidents caused by human errors are expected to drastically reduce hence reducing the demand for insurance covers. However, there are other potential risks that still face the car industry hence requiring the insurers to be innovative to remain competitive.
With Ьarshmallow providing insurance services to people that are neglected by other insurance companies, it anticipates making better use of the raised capital as there is an already viable market. Over time, Marshmallow has adopted modern methods of pricing their insurance covers. Notably, it checks on the model of the car and the cost of repairing in case of an accident.
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