To attract talented engineers to work for a startup in a traditionally unappealing sector amidst competitive recruitment from more enticing companies, Poland-based insurance startup Ominimo proposes a strategic approach: offering competitive pay and importantly, empowering engineers to apply their skills in reinventing industry operations.
Ominimo, which launched with a limited budget 12 months prior, claims to have developed a novel and superior method for understanding and pricing risk. The company reports it is already profitable and expanding rapidly, having secured 300,000 policies in Hungary, its initial market. To support its subsequent growth phase, Ominimo is receiving its first external investment from strategic partner Zurich Insurance Group.
According to sources obtained by TechCrunch, Zurich is investing €10 million (approximately $11 million) for a 5% equity stake in Ominimo, valuing the company at €200 million ($220 million). While neither Ominimo nor Zurich disclosed the investment amount, both companies have confirmed the valuation.
This funding arises at a time when WeFox, a well-known and previously well-financed insurance startup in Europe, is offloading parts of its business and seeking essential financing to continue operations. WeFox’s trajectory serves as both a cautionary tale and an opportunity, demonstrating the demand in the market from consumers and investors alike.
Despite being profitable, Ominimo remains relatively modest, currently operating only within Hungary and specializing in car insurance for consumers. The company aims to replicate its model in additional regions and insurance categories.
Ominimo plans to expand into over ten new markets, beginning with Poland, Sweden, and the Netherlands. In this expansion, Zurich Insurance will act as the risk carrier, and Ominimo will function as a broker, specifically as a managing general agent, for Zurich. Initially focusing on automotive insurance, the company intends to add property insurance over time.
Dusan Komar, CEO of Ominimo, co-founded the company with Dennis Weinbender (Chief Pricing and Data Officer) and Laslo Horvath (CTO). Komar observed challenges in the insurance industry during his tenure at McKinsey, citing issues such as rigid legacy systems, slow corporate decision-making, and challenges in attracting top talent.
Komar noted that highly skilled software engineers and data scientists typically do not aspire to work for insurance companies. At McKinsey, solutions often involved building new products from scratch and passing the code to the client, which had limited success.
Drawing inspiration from the fintech and insurance startup sectors, Komar and his team saw an opportunity to develop a product independently, utilizing APIs to integrate services from external providers, thereby giving birth to Ominimo.
Ominimo applies AI-based reasoning to big-data analytics, considering numerous parameters beyond traditional ones to optimize insurance pricing. For instance, vehicle data accessed via a license plate can reveal significant correlations, such as the one between car length and parking accident frequency.
While numerous insurance startups claim to utilize AI, Komar distinguishes Ominimo’s performance in the market, noting a below-average loss ratio and a 7% market share in Hungary, the only country where it operates.
Similar to neobanks, many new insurance players emphasize enhancing the user experience rather than disrupting backend operations. Komar criticizes competitors for prioritizing customer experience over substantive innovation under the hood.
Ominimo’s approach of providing opportunities for talent to engage in meaningful work has attracted and retained top individuals, including eight award-winning mathematicians and physicists. These gifted young professionals are now able to fully leverage their potential on a global scale, reflecting positively on the company’s key performance indicators.
This alignment with Zurich Insurance’s ambitions was crucial in securing their partnership. Alison Martin, CEO of Europe, Middle East, and Africa at Zurich Insurance Group, expressed satisfaction with the collaboration, seeing it as a strategic move to expand Zurich’s retail business and customer base in Europe through innovative motor insurance solutions.
