In today’s episode of “Start-up of the Week,” International Finance will discuss Marshmallow, a United Kingdom-based start-up established in 2017. The company is not only showing tremendous growth in the Insurtech sector but also redefining the industry by offering newcomers to the European country a more affordable deal on their car insurance.
The venture, which got listed in the Financial Times as the UK’s second fastest growing company in 2023, defines itself as “a purpose-driven company,” by currently helping 100,000s of UK newcomers get a fairer deal on their car insurance yearly. The company has pulled off this magnificent feat by building its own technology, developing pricing and fraud models that let it cater to its unique customer experiences, and investing time in getting to know the applicants on a deeper level.
Knowing The Vision
Marshmallow, led by twin brothers Oliver and Alexander Kent-Braham, has now joined the ranks as the second start-up owned by persons of colour in the United Kingdom to accomplish the feat of being a unicorn, with Zepz, a money-transfer firm, being the pioneer.
Marshmallow’s USD 1.25 billion valuation, registered in 2023, was a result of a USD 85 million Series B funding round in 2021. The company was born with a four-member team in what the founders called “the cheapest office space.”
Currently, the company has over 170 individuals on their team and boasts hundreds of thousands of users. As per the report from the Standard back in 2023, the company “saw turnover climb 175% to 22.9 million pound in 2022, while profits jumped to 709,000 pound.”
The founders’ mission for the company is to ensure that marginalised communities in the United Kingdom can afford insurance.
“There are millions of marginalised customers out there who find themselves on a different path – either by choice or circumstance. And we know they face unique problems that most companies aren’t even aware of. We believe our future is in helping those people by learning about their experiences, and building our company around their needs. Solving important problems for the people who need it most,” Marshmallow stated on its website.
In March 2024, Marshmallow entered into a partnership with Sky Media. Marking its TV sponsorship debut, Marshmallow’s campaign will drive its brand awareness and consideration among a specific target audience, mainly comprised of people who have recently moved to the United Kingdom, own a vehicle, and are looking for car insurance.
Here Comes The Game-Changing Product
The car insurance provides 45% cost saving for those moving to the United Kingdom with their vehicles. Unlike other industry players, who only care about the driving experience the immigrants gain after they move into the British mainland, Marshmallow’s product covers licences from all countries, apart from providing fairer prices based on the applicants’ driving experience in any country and last but not the least, giving flexible payment options, such as monthly payments.
Marshamallow’s vehicle insurance also comes with extra discounts for a proven record of claim-free driving (accepted from all insurers, no translation needed). Also, the product puts its user into control by allowing the latter to make unlimited changes to his/her details on the app when the person buys the plan directly. Apart from spreading the cost with smaller monthly payments, the user can also review his/her coverage every year and only pay for the exact service the person is availing.
The insurance package comes with benefits like vehicle repairs or replacement after an accident, fire or theft, personal injury costs, third-party cover to drive in Europe, windscreen protection and personal belongings cover up to 250 pound. On top of these, the user can add features like cover for other people to drive his/her car, no Claims Discount protection (claim-free driving discount in case of an accident), breakdown cover, full cover to drive in Europe, motor legal protection and excess protection (100% refund on what the insurance holder pays upon making a claim).
An Award-Winning Car Insurance
The service, so far, has paid out 66 million pound in claims, while registering over 300,000 app downloads.
“Starting a new life in the UK can mean a lot of changes, with different houses, cars, jobs, and people. Buy direct with us to make unlimited updates to your personal details all year. All on the app. With no extra admin fees. Manage your policy, access all your documents, and update your details on-the-go, at any time of day. You can also start a claim, start a Live Chat, and make changes to next year’s cover in seconds. Five stars (or close enough),” the venture stated.
Marshamallow has set up a 24/7 accident phone line, using which the policyholder can contact the start-up about an incident any time of day or night, and the company will start working on the case right away. The service even covers scenarios like the policyholder’s car being hit by an uninsured driver or the vehicle being damaged by vandalism, by protecting the claim-free driving discount, apart from providing the customer a full refund on the amount he/she paid on the initial claim (also called the policy excess).
Apart from covering the car’s damage, Marshmallow also provides financial support for serious injuries. If someone else is involved in the accident, the venture will cover damages to their cars/properties as well, apart from looking into injury-related compensation payouts.
Among the other policy basics, if the customer uses one of Marshmallow’s approved repairers, the venture will get the affected individual a courtesy car during the repair period. When it comes to repairing the car window, the start-up will cover the cost as well, provided the policyholder pays an amount upfront. In case the policyholder’s vehicle gets hit by an uninsured driver, Marshmallow will protect the claim-free driving discount.
Marshamllow has simplified its car insurance programme for its customers, with a high touch of personalisation. One such product is called “Build Your Own Cover,” which lets its user choose from three breakdown plans (roadside assistance, UK-wide recovery and European cover), apart from getting the upper hand in any road-related dispute, since the coverage also takes care of the legal costs required to settle disputes or appeal motoring convictions.
The policyholder can also upgrade his/her “Courtesy Cover,” in case the person prefers a replacement car in a situation of vehicle theft/repair. The person can also make up to two claims a year without affecting his/her claim-free record, protecting the well-earned discount in the process.
“Your excess is the amount you agree to pay if you make a claim (you agree to this amount when you sign up). But with Excess Protection, you’ll get it all back! Regardless of what happened or who was at fault,” the venture explained its award-winning product further in these words.
Any other standard vehicle insurance gives its user third-party only cover in Europe for up to 90 days. With Marshmallow, the person can upgrade that cover to “Fully Comprehensive,” ensuring coverage for injury and damages to his/her, as well as any other person involved in the accident.
A similar insurance product is there for the van drivers as well, where the policyholder can avail of claim-free discount protection if an uninsured driver hits his/her vehicle. The insurance also provides cover for work tools and goods.
A Successful Rebranding
More than one million people move to the UK every year from all around the world. Despite economic opportunities awaiting them, these immigrants face the problem of dealing with antiquated, rigid policies, which make the task of getting insured a difficult and expensive task for these individuals.
Marshmallow has become a challenger insurance company in the automobile front, by ensuring that these new citizens’ previous experiences (when it comes to driving) are taken into consideration and they get fair prices for their insurance coverage. The company backs the exceptions to the rules that every other insurance company refuses to deviate from.
The venture, in 2023, partnered with London-based branding agency Ragged Edge on a new identity that aims to reflect its forward-thinking approach to insurance and appeal to its diverse target demographic. The result was the introduction of a new “Marshmallow Mascot.”
The partnership also led to the development of a unique font called “Marshmallow Youth.” This tool not only conveys Marshmallow’s messages in a friendly manner to a diverse group of multinational customers but also considers the varying levels of English proficiency among the customers.