Otherwise reinvents insurance with a collaborative approach
The name of this startup says a lot about the ambitions of the founders: structuring insurance differently and drawing on collective knowledge. At Otherwise, the site user selects an insurance product and joins a small community. Users can manage their policy online, share views with others, find out how their money is used and recover a portion of their premium at the end of the year. This is collaborative insurance.
Returning to the origins of insurance with new technologies
An Actuary by training, Cécile Mérine, a former Marketing, Product Development and Operations Director at Swiss Life, had a chance to closely observe the changes taking place in the insurance market: “I began to realise that the insurance industry needed to get a move on and that it would require more agile structures that could open the way.” As someone with a strong entrepreneurial spirit, she lost no time embarking on an new business adventure in the second half of her professional life: “It was obvious there was a need to create an InsurTech. But I might have not done it if it were not for meeting Raphaël, who was working on a creative collaborative insurance concept.” For Raphaël Berger, a graduate of France’s prestigious Ecole Polytechnique and a former Director of Strategy at Areva, Otherwise turned out to be a good entry into the world of insurance.
Both partners wanted to use digital technology and the values of a collaborative economy to modernise the insurance world. “We did not invent a new type of insurance: we reinvented insurance by relying on new technologies, which enabled us to form small-scale groups and to revert to the original principle of insurance: to group together within communities to confront a risk with a mutually supportive and responsible dimension,” explains Cécile.
How does Otherwise work?
An insurance broker, Otherwise relies on a collective self-insurance model: the website user selects a traditional insurance product and joins a group of between 50 to 150 people with whom they share common traits. Small losses are compensated out of a common fund created at the beginning of the year while larger losses are covered by a partner insurer. Estimates, taking out a policy, determining the duration of the policy, and exchanging information among others with insurance... everything takes place online with the objective of selfcare.
Breeding grounds and external workspaces to grow and “get out of our shell”
Convinced of the soundness of their concept, Cécile and Raphaël decided in September 2015 to devote themselves full-time to the project and began developing a platform with their own money until it was ready to launch in January 2017. After using a co-working space, Otherwise was accelerated by French banking group BNP Paribas’ FinTech and InsurTech programmes and by Scientipôle, then incubated by Agoranov before arriving at Societe Generale’s Le Plateau in April 2017. “Each structure, each organisation and each space had their own strong points, and brought us good things at the different stages of our development.”
Their stay at Agoranov, a long-standing public business incubator, allowed them to benefit from relationships with potential investors just when they were seeking financing. In March 2017, they completed the first round of fund-raising, bringing in €1.6 million from Bpifrance, private investors and 360 Capital Partners (a fund in which Societe Generale is an investor). This is how they met the Le Plateau team. “Both in their development programme and the way they configure their premises, Le Plateau fosters dialogue among the different startups. That forced us to come out of our shell, because when you are working full tilt developing something, you can get completely absorbed and withdrawn,” explains Cécile. “Our interactions with Societe Generale were also very interesting. As an InsurTech, it was very important for us to know how industry professionals regarded our work and to be able to contemplate potential partnerships.”
For Societe Generale, welcoming an InsurTech startup to Le Plateau was an obvious choice. “The disruption currently happening to the existing insurance business model, with the rise of insurance within communities and groups, we found particularly interesting,” explained Flore Jachimowicz, Le Plateau and Partnerships Manager. “Relations with our business units were built very easily, especially as Otherwise was recommended by 360 Capital Partners, one of our investment funds that was a partner and an investor in their first round of raising funds.”
Today, Otherwise has its very own premises and a staff of 16. It launched dog and cat health insurance in partnership with Generali and is preparing a car insurance offer in partnership with MAIF for the end of the year. “We will be targeting hundreds of thousands of customers in the next few years, as well as expanding internationally,” explains Cécile. “Otherwise is an ambitious project.”
Did you know?
In February 2016, the legal entity doing business under the name Otherwise was officially created under the trading name of Amalfi, which refers to the Amalfian mercantile code and a fund created by Italian merchants in the 11th century to compensate for losses suffered by their ships as a result of shipwreck or attacks by pirates. They created the first actual insurance policy.