Waffle: The All-in-One Insurance Company
Waffle is a company that is developing a customizable, all-in-one insurance solution for consumers. The company was founded earlier this year by Sam Barnsley, Quentin Coolen, and Michael Li, and the company was recently a part of MIT’s delta v summer accelerator.
I had the chance to speak with the former two co-founders about how such a solution would work, as well as what comes next for the company.
Alex Culafi (AC): Tell me the story of how Waffle was founded.
Quentin Coolen (QC): Waffle wasn’t started as you’d expect it. The whole idea originated from…a discussion on Brexit! When Sam and I met on our first day as Sloan Fellows at MIT, we immediately began discussing the referendum and the consequences for citizens and businesses. How quickly could businesses adapt to this massive change? How could they innovate to better anticipate shocks and manage risks? The conversation naturally turned to insurance and how the consumers and the industry could most benefit from the incredible innovation that was all around us. That’s when Waffle was born.
From the very beginning, we made a point of approaching this from a customer standpoint. And we started to ask questions. Lots of them. Why is it that the things you need covered are not always covered? What are your policies so long and complicated? Why can’t you just get one policy that covers everything you want? And that’s where it all made sense. From that point on, Waffle would focus on insuring YOU as opposed to you as a driver or a homeowner.
Now, Sam and I had some tangential experience with insurance. I had set up the Insurance Development Forum, a public-private partnership between the UN, World Bank and the CEOs of the major insurance companies which was addressing the insurance gap in the developing markets. Sam was an avid insurance user and had started a number of FinTechs and seen the tremendous technological revolutions in other financial industries, but not in insurance. But the two of us weren’t enough. And that’s where providence sent us Michael during a luncheon on risk modeling. Michael had trained as an actuary (despite only being 21) but got immensely frustrated with the traditional approaches used in modeling, especially in light of the giant leaps in data science. He soon joined the team and we started the work.
The first time we pitched Waffle in public was at the MIT Fintech Business Plan Competition. Not only did we win the grand prize but the people’s reaction to our value proposition really took the day. And everything else snowballed from there. More competition winnings, more funding and access to kickass accelerators. We wouldn’t be where we are today without the unwavering support of MIT Sandbox, the MIT Media Lab, the Martin Trust Center for Entrepreneurship, and of course, our two accelerators: the MIT Delta V and the Barclays Accelerator, powered by Techstars.
AC: What was the aha moment?
QC: There was no single aha moment. Instead, it is the continuous streak of validation feedback that sustains us. Over the past 9 months, we have spoken to over 1,000 customers on the broader industry and what they what insurance to be. Every time we speak to customers, we get positive feedback on the Waffle concept. The approach resonates—we see it every day—and this is for a sector that people don’t normally engage with.
Now insurance is a complicated business, and we can’t do this without the expertise of the phenomenal men and women who work in the industry. The good news is that some of the most senior executives agree with our hypothesis and the fact that personalization and comprehensiveness are the way of the future. They also recognize the inefficiencies in the sector and the ways in which the industry has, at times, evolved at the expense of customers. Some of the most revealing conversations we had were with industry experts who themselves struggle to navigate the space. I remember speaking to a young life actuary and I asked him how he picked his life insurance product, “Oh, I was just called by a broker out of the blue and took the product they offered.” We have come across so many stories like that.
Above all though, insurance is an incredibly important part of life. And, for that reason, it really matters to get it right. To do that, we have to propose a model that benefits both the customers and the industry as a whole. Partnership is the only way to make insurance sustainable.
AC: How does your all-in-one insurance product work?
Sam Barnsley (SB): The basic premise of Waffle is that your insurance should be based on you, what you want to protect and not what traditional insurance products have been focused on. You should no longer have to get car insurance or home insurance but rather get insurance. Period. A product tailored to your own needs.
And that is how Waffle works, you select what you want to cover, and we create the product for you—whether it’s your car, home, life, health, tuition, pet, watches, travel or electronics (amongst other things).
This is all possible due to a number of innovations that we developed at MIT, particularly on the risk modeling side but also on automation and customer engagement.
AC: What was the process like building an insurance platform from scratch?
SB: This was one of the big decisions that we made when we decided to build Waffle. How much dependence should we have on the existing industry? Throughout our focus has been that if you want to really succeed you have to have skin in the game. This means that we have to become an insurance company and take risk.
On the insurance side, the development of the platform is a process that we are still going through and will be for the next 12 months. Now, as you can expect, and, not surprisingly, it is incredibly complicated. To make it bearable, we are going step by step. Today, for instance, we finalized part of the risk model front end. Tomorrow, we will firm our partnerships with our backers, and by the end of 2019, we will be on the market.
In this area, we are lucky to be advised by a number of the most senior industry professionals who are supporting us with the process and we have had to lean on their knowledge a lot.
The opportunity to build an insurance company from the ground up is an incredible, once in a lifetime opportunity. We have seen this approach take off in other financial sectors (Monzo in the UK is a great example) and to do so in insurance is an incredible privilege.
AC: How do you ensure that your product stays high quality while tackling so many different types of insurance?
SB: One of the major advantages to building from the ground up is that you have the freedom to make customer-centric decisions. By starting with a blank slate, we have been able to strip things down and really focus on what customers have told us.
Now Rome was not built in a day. We have a roadmap of features that we are planning to offer post-launch, including a number of very exciting approaches to distribution. Whilst we would love to include them on Day 1, we have had to prioritize to ensure we can keep the quality high.
The technological innovations we have developed also allow us to save on costs. After extensive customer feedback, we plan to return these savings through providing a greater coverage and a better customer experience. This approach, rather than being focused on the cheapest price, is what differentiates us from other InsureTechs who tend to focus on price as sole differentiator.
AC: I know you're going through Techstars now. What has that process been like?
QC: We finished an MIT accelerator at the beginning of September and started Techstars straight away, so it has been a fairly intense month.
We have just gone through a period called Mentor Madness, where we met with 40+ potential mentors over 7 days. This was an incredible experience as people picked apart our business and what we are trying to do. From that, we now have a group of lead advisors, with genuine expertise in areas that we need to make Waffle a success, who are fully invested in our development.
It is also great to be surrounded by a cohort of other FinTech’s (Waffle is one of 10 companies that are part of the accelerator, with our peers tackling areas from bank fees to supply finance to diversity), all of whom are going through similar challenges. Working in a room with companies that you know are going to be successful provides incredible motivation.
AC: What's next for Waffle?
QC: We have the Techstars demo day on the 5th of December, after which we will be fully accelerated! With a launch planned at the end of 2019, the next year will be entirely focused on regulatory approval, developing the product, and starting the process of customer acquisition. We are currently building out the team and will be raising institutional capital in Q1 next year.
Waffle is a labor of love. And it is an incredibly ambitious one. We want to bring back the industry to its original roots—to protect all of us when we need the most. If you are as excited as we are by this mission, contact us at firstname.lastname@example.org. We can’t wait to hear from you.