Imagine being an online merchant, gleaming with pride over the boutique watches you’ve sold. Now, imagine the heartbreak when customers flood your inbox with complaints about lost packages. With a tarnished reputation, you’re not just losing goods; you’re losing trust.
E-commerce has undoubtedly revolutionized shopping. In 2022, e-commerce accounted for 18.9% of total retail sales worldwide However, the exhilaration of hitting the ‘buy now’ button turns to anxiety for many when faced with lost, damaged, or delayed goods. These mishaps are not just delivery errors; they reflect a deeper issue. A staggering 90% of goods in transit remain uninsured or underinsured. But why? Traditional insurance has often been too expensive and cumbersome, leaving a vast gap. Moreover, with over 75% of adverse reviews pinpointing the delivery process, there’s no doubt about the magnitude of this issue.
Identifying the Gap
Couriers do offer compensation but with caps. The compensation process, laden with paperwork and stretched over multiple couriers, is a journey of frustration. Even then, success isn’t guaranteed. In an age of digital efficiency, why does this segment lag?
The Anansi solution
Anansi addresses the inefficiencies in the transit insurance space by developing a system deeply integrated with existing e-logistics software. Here’s a breakdown of how their solution functions:
- Integration: Anansi’s system seamlessly blends into current logistics platforms.
- Claim Triggers: Anansi employs parametric triggers, which means claims are recognized and processed immediately upon certain pre-defined conditions being met.
- Automated Claim Process: Instead of manual claim submissions and follow-ups, Anansi’s automated system handles the bulk of this work, reducing friction for retailers.
The journey for the client is very simple:
Fig. 1 – How it works
Why We Invested
Anansi distinguishes itself within the insurtech landscape. They offer a potent blend of market opportunity and innovation. Here are some key factors that weighed heavily in our decision:
- Tremendous Market Potential: B2C e-commerce sales in the UK alone in 2021 amounted to £127B. With Anansi’s premium being 1.5% of the order value, we’re eyeing a TAM of a staggering £1.9 billion GWP just in the UK.
- Actuarial Attractiveness: An intriguing insurance product that captivates insurers. The capped liability increased last-mile visibility, and the short duration makes it adaptable and lucrative.
- Scalability: Anansi has the ability to expand both horizontally, into other countries and regions, and vertically across the logistic supply chain.
- Distinctive USP: Anansi’s main value add lies in its automated claim process, ensuring quicker resolutions and greater efficiency for retailers.
- Leadership: Spearheaded by Megan and Ana, the vision and passion they bring are palpable. Their leadership flair is evident in the talent they’ve congregated, both in terms of employees and advisors.
- Robust Capacity Panel: As an MGA, Anansi is anchored by a capacity panel featuring top tier global Insurers. Their collaboration with these esteemed insurers ensures Anansi is well-equipped to underwrite effectively.
Being an insurtech-focused fund, Start Ventures constantly seeks out startups that bridge gaps, offer unique solutions, and have the potential to redefine sectors. Anansi, a groundbreaking female-led startup, aligns perfectly with our ethos and vision.
As e-commerce continues its upward trajectory, the last mile can no longer be ignored. With Anansi leading the charge, we’re eager to see how they transform this segment. Keep an eye on them; we believe they’re about to revolutionize goods-in-transit insurance.
By: Nuno Afonso, Analyst