No advice insurance business valued at $4 million

Mosaic, the firm behind a new no-advice insurance offer, Volo, wants to raise up to $1 million via online crowdfunding, valuing it at more than $4 million. [Updated: Now includes policy doc and wording]

Tuesday, September 15th 2015, 6:00AM 2 Comments

by Susan Edmunds

Mosaic was founded by Jamie Coltman, of Kepa Group and Advice Financial, and former Konnect Net directors Trevor Boone and Murray Lilley.

It offers Volo, an insurance product for 18- to 35-year-olds.

It is billed as “lifestyle cover” and pays out for things such as surgery, fractures, cancer, temporary and permanent disability.

Cover is provided based on the applicant’s income.

Premiums are affected by their occupation but not their age if they are within the 18 to 35 bracket.

A print journalist earning $70,000 would pay $17.29 a week in cover to receive up to $119,781 in cases of permanent disability.

Volo does not allow for any pre-existing conditions and purchasers cannot look at policy documents until they have bought the policy. (However the policy documents and wordings are here and here)

There is no ACC offset.

Boone said the product had been developed to provide benefits based on the fact that something had happened rather than the event itself.

It combines aspects of health cover and income protection insurance but is cheaper than holding multiple policies.

“If you break your leg the benefit relates to the amount of cover you have got, for you to protect your lifestyle and pay the bills rather than fix your leg.”

Mosaic is seeking between $400,000 and $1 million via Equitise.

Boone said the company had been self-funding so far but wanted to be able to move faster.

Boone said if $1 million was raised, that would represent about a 20% stake in the company.

He said a large part of the company's value was attributable to the underlying platform used to distribute the product.

"That is the key to being able to do this. If you want exponential growth you have to do things totally differently and turn them upside down. What's the platform to do that? Things change so quickly, if you don't design for change you pay the price. You have to assume that everything you are doing, you will throw away in 18 months' time and if you assume that's going to happen you have to build a platform accordingly."

He said: "The website distribution aspect resides on top of and interacts via API with the underlying, product, customer, admin and claims platform, which in turn has an underlying encrypted database."

Volo's products are underwritten by Partners Life.

Once policy holders reach 36, they have to transfer to a traditional policy. Boone said there would be benefits to having been a Volo policy-holder, though.

He said the company wanted to offer value-added services and opportunities for its customers to improve their lifestyles so they would get the benefit of that later.

“The healthier you have been and the better you’ve looked after yourself, the more comprehensive records you have, the better policy you will be able to get.”

Mosaic has secured Cover-More as the underwriter for its Volo Travel product, which is being developed.

Tags: Volo