The FCA received over 60 applications for this cohort. Of these, under a third were accepted. Just three of these companies are in insurance - and Wrisk is one of them.
As defined on the FCA website: “The regulatory sandbox allows businesses to test innovative products, services, business models and delivery mechanisms in the real market, with real consumers.”
What that means is that Wrisk’s first steps into the marketplace will be in the form of a structured trial run under a regulatory microscope. Once we’ve tested our proposition in this environment with a small group of users, we’ll launch it publicly to everyone.
Does wishing for extra scrutiny from our regulators sound counter-intuitive? We’ll go even further: just engaging with the FCA has been good for us. Right from the start.
Some of the benefits are clear (we can legally sell insurance now!) but some may be less obvious...
It can take up to a year to be authorised - and that’s once the application has actually been submitted. Our insurance team spent weeks on applications for authorisation and for entrance to the sandbox, plus extra time answering follow-up questions for each.
This is actually a good thing for a startup. We were interrogating our business model, structure and strategies - sometimes for the first time. It’s the business planning equivalent of eating your greens.
Let’s be honest: for a startup at least six months away from selling our first policy, drafting detailed procedure documents was low on the priority list. Completing these applications ensured we finished work like that well ahead of launch. In every area now, we have solid starting points from which to continuously improve.
We’ve talked before about how and why we celebrate technical team milestones (most recently with crazy golf in the City!). What you may not have known is that we have a process for celebrating non-technical milestones too.
At Wrisk HQ, we keep a line of empty champagne bottles by the window, each representing a company triumph. Until now, these have been mostly funding-related, such as completing crowdfunding. Now we can add a new bottle to the line: the first triumph driven by our insurance team.
Even in a small startup, much of the insurance team’s work goes unseen, obscured by complicated spreadsheets or dense wording. Applying for FCA authorisation was in many ways no different: time-consuming work, completed months ago, largely out of sight.
Gaining FCA authorisation is such a fundamental part of our business model, it would have been easy to take it for granted. Popping open a bottle of champagne means making sure the entire team understands the significance of this triumph and its impact on the company.
Just as authorisation was a win for more than just the insurance team, neither is the sandbox trial run going to benefit only them.
The Wrisk proposition combines one complicated thing (building an app) with another complicated thing (creating insurance policies) to make complication squared. There are a lot of moving parts, unseen dependencies and unknown quantities. Insurance decisions have technical impacts, and vice versa.
Remember the idea that completing hefty application processes takes you through the business planning version of eating your greens? A trial run like this is in some ways the technical equivalent. The first version of our app won’t be perfect, and we’ll be relying on those first users to give us detailed, honest feedback on how to improve.
We would of course have held our own trial run had we not got into the sandbox - but that couldn't have tested our entire offering equally. Conducting our closed trial run in the FCA sandbox ensures that all elements of our proposition will receive equal scrutiny and that all members of the team will receive useful feedback.
By the time we leave the sandbox we will have put our entire proposition through the wringer from every angle, making it as good as we possibly can. From our perspective, engaging with the FCA early on and working with them as collaboratively as possible has helped to give us the strongest possible foundation for our public launch next year.