Clark analyses its clients’ insurance data and compares it with the offers available from other insurance companies.The insurtech company uses various tools, including an app aimed at making the topic of insurance more interesting for young people.
About the team
Marco Adelt, Chris Lodde, Steffen Glomb and Christopher Oster (from left to right) set up Clark in 2015.
In 2017, digital technology can be found at the heart of most cutting-edge young businesses, like Clark, a digital insurance broker, for instance. The company’s “robotic advisor” is able to analyse all of a client’s insurance data and compare it with offers available from other insurance companies. And the whole process takes just two minutes. The system was developed by the 40-strong team employed by CEO and co-founder Christopher Oster and his three other founders Marco Adelt, Steffen Glomb and Chris Lodde.
The algorithms used provide clients with a reliable summary of their insurance situation: are all their individual contracts and policies well coordinated with one another? Are they covered for all common risks? How much value are they getting for their money? Are there cheaper offers out there? If the insurance situation is too complicated, a real-life specialist can step in to assist their digital “colleague”.
The service is free for costumers to use. There is no obligation to sign up for alternative offers because Clark not only earns a commission on new policies but also for existing contracts. According to the company, the number of customers using the service on their smartphones has already reached the mid-five-digit range.
The insurtech company is based in the city centre of Frankfurt. The team works in an open-plan office on the third floor of a plain-looking building: desk after desk of computers, surrounded by dull walls covered in colourful post-its full of ideas, strategies and deadlines. The team meets every morning, giving everyone the chance to provide an update on what they’re currently working on. However, their days in this current location are now numbered: “We're planning to relocate,” explains CEO Christopher Oster. The young, international team’s qualifications are based on the digital business model. Many members of the team are software engineers, while others are insurance sales specialists and marketing experts. One of the main aspects of their work is the ongoing development of the “robotic advisor”. The assistant is reprogrammed on a continuous basis and "fed" with new data from insurance agencies and customers.
Insurance companies have long been aware that providers like Clark – businesses that didn’t exist in the analogue world – offer an interesting route for new customers. As Christopher Oster explains, the majority of Clark app users have been young people so far. They are already well-practised at using their smartphones to organise their friendships, banking transactions and holidays. So why not add insurance to that list, too? If you’re lounging on the sofa or sitting in a café, this somewhat heavy-sounding topic can seem a lot less daunting. Clark is currently working with around 160 insurance companies. “We are keen to expand to other countries next year,” explains the young entrepreneur, “probably within Western Europe.”
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While older generations still place their trust in door-to-door representatives, young people are moving increasingly towards digital services when it comes to finding out about insurance.
Two years after the company was set up by Christopher Oster, Steffen Glomb, Marco Adelt and Chris Lodde, Clark is almost a prototype for a fast-growing digital company, which launched at exactly the right time. The technical opportunities offered by digitalisation are already advanced enough and yet still offer huge potential for development.
Every fifth business founder in Germany describes themselves as a “digital entrepreneur”. The financing opportunities needed for investment have also significantly improved for start-ups and entrepreneurs – not least thanks to the new KfW Digitalisation Programme, which is a direct response to this group’s particular needs. In most cases, these businesses don’t need machinery or material assets, just funds to finance their development and programming costs.
In Clark’s case, the business initially grew out of Christopher Oster’s sheer determination to work for himself. After completing his PhD, carving a career for himself at a management consultancy firm just wasn’t an option for him. After a lot of in-depth research, he finally homed in on an idea for a business. He then carefully selected his colleagues to join him on the board. “In Germany, the insurance market is still largely untouched by the digital revolution, with 95 percent of business still taking place offline. This is where we spotted our opportunity and where it remains to this day,” says Christopher Oster. The next job was to seek out suitable sources of funding. An initial round of seed capital was provided by Finleap, a Berlin-based company, which supports fintech firms or, in this case, insurtech companies during their start-up phase.
In the second financing round in 2016, Clark came across the coparion fund, which had been set up the same year by the German Federal Ministry for Economic Affairs and Energy and KfW, with the aim of helping young, growth-oriented businesses in Germany find their financial feet. Since then, the fund has invested a seven-figure sum in Clark as part of a larger consortium, which has ploughed a total of EUR 13 million into the company to date. Coparion’s CEO Christian Stein is in regular contact with Christopher Oster and his team. “We were not only won over by the business idea, but also by the people behind it,” says Stein.
With its solid financial foundation coupled with courage, a willingness to take risks, and strategic vision, Clark has so far succeeded in developing its business concept at a fast pace. Further growth is on the horizon: “Only a third of all Germans are happy with their insurance,” says Oster. TV and newspaper advertising is expected to increase awareness, so that more and more people can get to know the Clark app. Working with Goethe University in Frankfurt, Deutsche Bank and Commerzbank, Clark is also involved in a project called “Vorsorge-Cockpit” (“Pension Cockpit”). This application brings together all private, company and statutory pension sources, enabling users to calculate their forecasted benefits. This means more input for the robotic advisor.
The described project contributes to the following United Nationsʼ Sustainable Development Goals
Goal 9: Build resilient infrastructure, promote sustainable industrialization and foster innovation
Non-existent or dilapidated infrastructure hinders economic efficiency and thus engenders poverty. When building infrastructure, the focus should be on sustainability, for example, by promoting environmentally-friendly means of transport. Factories and industrial facilities should also ensure that production is in line with ecological aspects to avoid unnecessary environmental pollution.
All United Nations member states adopted the 2030 Agenda in 2015. At its heart is a list of 17 goals for sustainable development, known as the Sustainable Development Goals (SDGs). Our world should become a place where people are able to live in peace with each other in ways that are ecologically compatible, socially just, and economically effective.
Published on KfW Stories: Wednesday, 27 August 2017