Zurich backs Laka to challenge the conventional insurance model

Laka offers a bicycle insurance product that aims to challenge the conventional model. Co-built and financially backed by Zurich, the offering uses a pooled payment system. 

Consumers do not make upfront payments. Instead, monthly claims are settled as part of a group risk pool plus a fee. Customers are grouped together in ‘packs’ defined by lifestyle and behavior. Any claims made are covered by Laka and then split between the pack. Zurich underwrites the policies.

The aim of this method of pooled payment calculation will be to encourage consumers to behave in a certain way in order to reduce the number of claims, which are reported on a smartphone and paid with no excess.

The move is part of the evolution of insurance, which involves helping customers protect their goods as opposed to just paying out claims. But unlike players in the health and home sectors, this model does not just rely on data to alter behaviour. It is about creating a community and attempting to reduce costs by emphasising the importance of looking after your own bike.