Alejandro Arrieche
Flock, a European startup that underwrites data-driven insurance policies for commercial vehicle fleets, just raised $38 million from investors during its Series B funding round to keep developing its revolutionary business model.
The funding round was led by Octopus Ventures and CommerzVentures and counted on other prominent venture capitalists including Chamath Palihapitiya’s Social Capital, and Foresight Ventures.
Flock uses telematics data from commercial vehicle fleets to come up with a safety score for the different vehicles that the client operates and determines the cost of the insurance based on this information.
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This encourages drivers to drive safely by introducing a monetary incentive in the form of reduced insurance costs. The company has created a platform through which fleet owners can keep track of the safety score of each of their vehicles and see how they have fared compared to the insurance policy’s scope.
Here’s How Flock Business Model Works
Flock offers its insurance policies to companies in the transportation, delivery, and car rental business, among others, and has amassed over 600 commercial customers thus far. The company claims to be insuring around a third of Amazon’s independent fleet – these are transportation services provided by third parties to the e-commerce giant to deliver its packages.
In addition to providing competitive insurance quotes, Flock’s system is designed to communicate insightful information to drivers and fleet owners about high-risk routes and it is also equipped to identify risky behaviors.
The insurance policies offered by the company covered liability to people and property, window and windscreen damages, medical expenses, and theft, among other coverages.
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The company was founded by Ed Leon and Antton Pena, who stumbled upon the idea of creating an insurance product that could use real-time data. Flock’s success relies upon the system’s ability to determine the risk that each vehicle within a fleet carries as this will ultimately determine how much the owner will pay for insurance.
If that perceived risk diminishes, the cost of insurance will go down accordingly and vice versa.
“At Flock, we believe that insurers should help customers save time, money, and even lives. With our radically different insurance model, enabled by an immense amount of data, we hope to actively reduce the number of people needlessly killed or injured on the road”, Flock’s co-founder Leon commented.
The company emphasized that its revenues have grown by more than 30 times since its Series A funding round in 2021 when the firm raised $17 million led by Chamath’s Social Capital VC firm.
In addition, Flock has partnered with over 100 commercial insurance brokers in the United Kingdom to raise awareness among drivers and fleet owners about their data-driven insurance products.
Flock is Not the First of Its Kind but the Market is Huge
Flock competes with another British startup called Zego, which, according to Crunchbase, has raised more than $280 million from investors and that reportedly provides insurance to over 400,000 vehicles from both companies and self-employed drivers.
According to data from Insurance Europe, motor insurance premiums amounted to €149 billion in 2020. Meanwhile, the largest markets by gross written premiums were Germany, France, and the United Kingdom.
Usage-based insurance – also known as UBI – is one of the trends that has been dominating the insurance telematics market lately and it involves the analysis of driver’s actions such as
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This article was written for Business 2 Community by Alejandro Arrieche.
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