By Matt Kenyon
A simple but important question for any entrepreneur is “Would you use your own product?” Ben Smyth, co-founder and CEO of Arma Karma, passes this test with flying colours. He has rented in and out of London – and he has seen first-hand the way in which contents insurance falls off the list of priorities for young renters. He now subscribes to Arma Karma, the contents insurance product from the company that he founded.
Smyth has worked at a number of incumbent insurance brokers since graduating eight years ago, and he admits that contents insurance often fell off the radar. It was difficult to manoeuvre around flatmates, second-hand furniture and general apathy. He emphasises how common this situation is, with five million 18-24 year olds in the UK renting with no kind of contents insurance.
One of my first questions to Ben is about the name Arma Karma. He says that this is an evolution of their initial name of ‘InsuranceKind’ – they were looking to find a name which combined protection and goodwill. It was Arma Karma that ultimately fit the bill, with protective armour, or ‘Arma’, and the ‘Karma’ a recognition of their commitment to social purpose. The team affectionately refer to their logo as the ‘Karmadillo’.
The name neatly sums up Arma Karma’s proposition to its subscribers as a disruptor contents insurer aimed squarely at ‘Generation Rent’. In Smyth’s view, the key to winning the Millenial and Gen Z renter is for insurers to hold themselves to higher standards both in customer experience and in ethics.
Smyth’s assessment is that understanding the frustrations of young renters is key to enhancing the customer experience. The business model of Arma Karma is tailored to this demographic by reducing the barrier of entry. The UX is jargon-free and written in easily accessible language. Arma Karma is also one of a relative minority of contents insurers which offer a monthly subscription, as a recognition that many young people either cannot afford an annual policy or may be unlikely to stay in one place for years at a time.
This effort to shift the customer experience is a recognition that the old model of fully comprehensive contents insurance is outdated. Smyth says that the “bubble of cover” approach to renters does not match the modern realities of renting.
A striking behavioural change is that for younger renters today, the most valuable possessions are often also the most portable. Rented spaces are also becoming smaller, especially in densely populated metropolitan areas – so, there are fewer immobile things to insure but the contents insurance experience has not changed to reflect this.
Arma Karma aims also to engage a more ethically conscious customer base. The firm is B Corp pending, the business equivalent of Fairtrade. They have partnered with climate solutions firm Ecologi with the goal of offsetting their operating footprint – the firm has been acknowledged by Ecologi for offsetting 26.53 tonnes of CO2 so far.
The firm has other charity partners, four of whom were selected by Arma Karma’s customers. Moving forward, Smyth says that the firm is looking to rotate their charity partners on a quarterly basis.
Generational inequality is an undercurrent in the insurance industry that is increasingly difficult to ignore. As younger people rent for longer, while taking contents insurance less seriously than ever before, Ben Smyth suggests that the entire business model will need to change. For Arma Karma, the future is in customer choice and sustainability.
Matt Kenyon is a content producer at Insurtech Insights.
Join 160,000 members of the insurtech community by signing up for our newsletter here.
Take a look at our upcoming webinars up here.