Ominimo, the artificial intelligence insurtech, secures its first investment with a valuation of $220 million.
How to attract talented engineers to join a startup in a less exciting sector, especially when there are more appealing companies offering good salaries and hiring intensively?
Attracting talented engineers to work in a startup in a sector that could be considered common, especially at a time when more exciting companies are offering high salaries and hiring aggressively, is a challenge. Ominimo, an insurance startup from Poland, has found a way to do this: by offering competitive salaries and allowing engineers to apply their talents to reinvent how the sector operates. Founded with a limited budget just a year ago, Ominimo has developed a different and improved approach to understanding and valuing risk, already achieving profitability and rapid growth, with 300,000 policies signed in its first market, Hungary.
To drive its growth, the company has decided to accept its first external investment from a strategic partner, Zurich Insurance Group. Sources indicate that Zurich is making a €10 million (approximately $11 million) investment in exchange for 5% of the company, valuing Ominimo at €200 million ($220 million). While neither Ominimo nor Zurich has commented on the exact amount of the investment, both parties have confirmed the valuation.
The current context presents an additional challenge: one of the most recognized insurance startups in Europe, WeFox, is divesting parts of its business and seeking emergency funding to survive. This scenario serves as a warning about how not to grow in the insurance sector; at the same time, it highlights the opportunity Ominimo has in the market. Unlike WeFox, which grew rapidly due to demand, Ominimo is already profitable, although its approach is modest; it currently operates in just one market and specializes solely in automobile insurance.
The startup plans to expand to more than ten new markets, starting with Poland, Sweden, and the Netherlands, with Zurich acting as its risk insurer. Ominimo will position itself as a broker, specifically as a general management agent for Zurich, intending to initially focus on automotive insurance and introduce property insurance in the future.
Dusan Komar, CEO of Ominimo and co-founder alongside Dennis Weinbender and Laslo Horvath, has closely experienced the challenges facing the insurance industry during his time at McKinsey. He identified three main issues in insurance companies: rigid legacy systems that hinder innovation, slow decision-making processes, and a lack of talent. Komar argues that “no brilliant software engineer dreams of working for an insurance company.”
Learning from fintech startups and other innovative insurance sectors, Komar and his co-founders decided to create their own product rather than develop it for a client. They use APIs to integrate functions from other providers, and thus Ominimo was born. The company applies AI-based reasoning along with big data analysis to calculate and provide insurance quotes. Instead of the five or six parameters used by traditional insurers, Ominimo considers additional variables that are crucial, including data such as the physical characteristics of vehicles.
The number of insurance startups promoting the use of AI in their operations is considerable, but Komar is confident that Ominimo's performance is proof of its effectiveness. He claims that its loss ratio is below the market average and has managed to capture 7% of the market in Hungary.
Like many neobanks, which actually have much in common with the insurance sector, the new players in the latter are not revolutionizing everything under the hood, but rather focusing on providing a more modern user experience. Komar believes that the key to attracting and retaining talent at Ominimo lies in offering them the opportunity to work on what they truly want. This is evident in their data science team, which includes eight medalists from math and physics Olympiads.
As for Zurich Insurance, it also sees in Ominimo a way to diversify how it attracts new customers. Alison Martin, Zurich’s CEO for Europe, the Middle East, and Africa, expressed her satisfaction with the partnership that will allow offering innovative automobile insurance solutions and enable expansion beyond the markets where they are already present.