For this week’s Spøtlight, we sat down with Matthew Elan Smith, Founder of Pineapple, a peer-to-peer scheme serving the short-term insurance market.
In our Q&A, we talk trailblazing tech, future financing, and what it’s like being the first ever insurance company to be accepted into Google’s Launchpad accelerator.
Hi Matthew, could you tell us a little about yourself and what Pineapple does?
I am Matthew Elan Smith, born in Johannesburg with a background in Actuarial science and Statistics. I love all things tech and am a futurist at heart. Pineapple has changed the entire business model of insurance and is the world’s first fully functioning decentralised insurer.
• Premiums paid are deposited into each member’s own wallet, which buys them comprehensive insurance cover
• Wallets help fund claims in the system (members can see this live per claim)
• We take a fixed fee for Pineapple and for “reinsurance”
• All premiums leftover in a members’ wallet at the end of the year can be withdrawn, in cash.
• Members can link up to each other should they choose and, by doing so, protect themselves from claims of strangers and, more so, are only affected by those they choose to link up with.
Pineapple was born out of an effort to solve the current structural issues with the insurance business model, whereby short-term insurance market is mistrusted due to a conflict of interest, lack of transparency and loss of affinity. This spurs on fraud, and, combined with excessive expenses and profit margins, the value a user yields from their policy is much decayed as a result.
Pineapple’s model is that we do not register as an insurance carrier. This is in order to scale quickly to other regions, so we must, therefore, partner with an existing carrier in each region we go to, who then acts as the underwriter and “reinsurer” in the system.
Where did the idea for the startup come from and what makes it unique?
Myself and my two co-founders (Marnus van Heerden and Ndabenhle Junior Ngulube) were part of a team competing in the Journey-Re competition run by Hannover-Re global. This was in 2016, and the initial seeds for Pineapple were sown during a Design Thinking Process that we followed for 6 months. After the competition, we spent a further 6 months refining the business model, doing testing and getting our regulatory license to operate in South Africa.
What do you see as the most important qualities in a company’s team?
For us the quality of constructive debate has proved most valuable. We try to cultivate a culture whereby everybody feels free to debate and argue a point to get to the best solution. The key is to not take any debate as a personal attack, but rather as a means of getting to the best solution for any problem. Putting the user at the centre of all our decision making is also a key quality which we adopted from the Design Thinking framework and now apply across our business.
Is there a particular new venture within the short-term insurance market who inspires you?
Yes, various ventures in different ways:
Lemonade – their ability to execute on a vision and get investors to buy into the vision. Also a great user experience in app.
Discovery Vitality – Their use of a very effective shared-value model and methodology.
You were recently invited into Google’s Launchpad Accelerator, making you the first insurance company to join the program. How important do you think this will be for Pineapple’s development, and which aspects of your business are you particularly excited to explore during that time?
Being the first ever insurance company to be invited to join this accelerator is a great compliment to us, especially considering the $5bn+ investment into Insurtech in the last 3 years.
We are taking the opportunity to optimise our tech – enhancing our AI abilities, as well as the use of Deep learning and Reinforced learning – in other aspects of the business such as sales, underwriting, pricing and “honesty score” processes. Google has some of the best AI experts worldwide, and we are fortunate to be able to work with them in order to further apply this important field to our business.
Other things we want to get out of the program is access to potential partners/investors as well as optimising our marketing efforts with Google tools.
Out of the other companies, which are you most interested by and why?
Out of the other companies at the Launchpad event, I would say MedSAF is a really interesting company with amazing potential and vision
Your last funding came as a Seed round in August 2017. Do you have plans to secure more financing soon, and, if so, what would the money be used for?
Yes we do. We are currently engaging in a further round of funding. The majority of this will be used to grow our community and our team, as well as ready ourselves for expansion to another region.
Although the concept has been brewing since last year, you only recently launched to the mass-market on July 27th, 2018. How has the reception from the public been so far?
We have been delighted at the reception so far. As I’m writing this, we have over 2500 members who have joined Pineapple – just 1 month after launch!
We have received continuous compliments from our customers on the offering, the user experience and the company goals as a whole, which has been very encouraging for us.
Our customers have also been very generous in supplying valuable feedback and constructive suggestions, which allows us to better what we do and prioritise what people need.
If you had to give one piece of advice for aspiring startups looking to disrupt the insurance industry, what would it be?
Fall in love with the problem you are trying to solve, not your solution.