Once an individual has been diagnosed with a chronic condition, obtaining life insurance becomes more difficult due to underwriting guidelines. Those that have the least severe ailments and have their diseases under control may be able to secure overage but it comes at an additional cost. Bluezone Insurance is a specialist insurance company that is built to provide coverage to those with chronic conditions. The company, founded in 2020, is building a Diabetes-specific ilife insurance product with plans to also launch coverage for those with heart diseases. Behind the scenes, the company has built a sophisticated risk management underwriting engine that uses AI/ML to sort through medical data to make insurance products more accessible by offering cheaper options. Bluezone is also focused on providing its insured customers with incentivized management and adherence programs for their conditions to essentially de-risk them. The company is currently accepting applicants to its waitlist and promises to provide same-day coverage through a digital onboarding process.
AlleyWatch caught up with Bluezone Insurance Founder Karan Mehta to learn more about the business, the company’s strategic plans, recent round of funding, and much, much more…
Who were your investors and how much did you raise?
We raised a £1.5m seed round led by Insurtech Gateway and AV8 Ventures. Other impact/angel investors include Oxford Capital Partners, Portfolio Ventures, Andy Homer, Will Neale, Duncan Russell & Chris Adelsbach.
Tell us about your product or service.
The funds will enable us to launch our first Type 2 Diabetes life insurance product, designed from the ground up to understand adverse health event risks and deliver proactive, personalised healthcare to customers. Our sophisticated AI risk engine will offer customers a fast, fair, and precise premium, tailored to their unique risk score through a simple digital journey.
What inspired the start of Bluezone Insurance?
I pursued clinical medicine for several years with the sole purpose of improving the health of human lives. Yet, I felt dissatisfied because of the number of problems I noticed. Firstly, there is an imbalance in demand and supply of healthcare resources – too many patients but too few healthcare professionals leading to an overworked workforce. Secondly, the impact that I could have was limited to the patients on the ward or in the surgery. Thirdly, my job was about fine tuning the doses of prescribed medication because of the reactive nature of the healthcare system that treats symptoms instead of taking a proactive approach to treating root causes of illnesses. This led me to embark on a journey to develop a scalable solution that delivers proactive healthcare in the most effective way.
How is it different?
We have taken a first-principles approach to develop the most powerful medical underwriting risk engine using sophisticated AI/ML techniques and large medical datasets as part of my Ph.D. research. This will offer customers cheaper and fairer premium prices and a digital and streamlined onboarding process. We will also refer our customers to a health/wellbeing marketplace of lifestyle apps that will help these customers lead healthier lifestyles and de-risk them.
At the core, we aim to be the best at risk estimation and risk mitigation.
What market you are targeting and how big is it?
We are launching in the UK Life Insurance market. Our first product is built from the ground up for people living with Type 2 Diabetes.
What’s your business model?
We have a shared-value business model. We think that Life Insurance should work for you. We want to empower customers to live a happier, healthier, longer life – with personalised lifestyle management and insights to guide them towards a healthier, more fulfilling future. By de-risking customers, insurers make fewer claims and in principle, become more profitable.
We will operate as an MGA business, where the reinsurer and primary insurer will carry the risk and Bluezone will acquire the customers.
What are your post-COVID office plans??
We have an (open) office in Holborn, London.
What was the funding process like?
The funding process was exciting with many peaks and troughs. It’s a process that requires perseverance and a mindset that it will be successful. It took us 2 months to secure a lead VC, and 3 months to fill an oversubscribed round. It’s important to dedicate all of one’s energy and time to the process for this intense period.
What are the biggest challenges that you faced while raising capital?
Identifying and securing a lead VC to issue the term sheet is the most difficult part. Once terms with a lead VC have been signed, the follow-on investors come in very quickly.
What are the milestones you plan to achieve in the next six months?
We have clear milestones to achieve this year:
- Secure FCA authorisation: AR status
- Finalise (re)insurance partners
- Build out our waitlist
- Launch product
What advice can you offer companies in London that do not have a fresh injection of capital in the bank?
To keep the company’s burn rate low by maintaining a lean team that can wear multiple hats, focus on product, and prove core hypotheses of the company in order to convince investors.
Where do you see the company going now over the near term?
In the near term, our goal is to prove product-market fit for Type 2 Diabetes life insurance in order to raise additional capital to expand into other chronic diseases, insurance products, and geographies.
What’s your favourite outdoor activity in London?
To run long distances around Regent’s Park and Hyde Park.
