Financial Times: UK insurance start-up Gryphon raises £180m

Craven Street Capital are extremely proud to have been the sole financial adviser to Gryphon Group Holdings Limited on its £180m raise to launch a new life insurance company in the UK.

Please find the Financial Times article below (subscription required)

by: Oliver Ralph, Insurance Correspondent


New entrant to sell products such as critical illness cover and income protection

A UK start-up insurer called Gryphon has raised £180m from investors, making it one of the biggest new entrants to the industry in recent years.

Insurance is awash with new companies offering novel, technology-driven ways into a centuries-old industry. In the first quarter of the year, insurtech start-ups raised a total of $283m from investors according to CB Insights and Willis Towers Watson, but the biggest single fundraising was $60m.

Gryphon, which is planning to sell life insurance in the UK, said it plans to “maximise the potential of insurtech to build intuitive products and processes”.

Daniel Pender, a former Prudential and Zurich executive who runs Gryphon, said: “Insurance companies today are hamstrung by their existing technology. We have no legacy systems.”

Gryphon will sell products such as critical illness cover and income protection, pitching itself against industry heavyweights such as Aviva and Legal & General. Like many others in the industry, it will sell via financial advisers rather than directly to customers.

“We feel that the advisers do a fantastic job, and the role they play is critical in explaining the value of the protection products,” said Mr Pender.

He added that Gryphon’s technology and products would make it stand out from the crowd, but he declined to give any details of what its technology was, or how its products would differ from those already on the market.

The company has been backed by money from Punter Southall, the pensions adviser, and Leadenhall Capital, a specialist insurance asset manager.

Jonathan Punter of Punter Southall, said: “We already know there is a significant protection gap in the UK. This translates into a great opportunity for an insurance company that can solve the issues of customer trust and adviser experience. This company, with its new approach, will be well placed to meet these challenges head on.”

Unlike many other start-ups, Gryphon will become a full insurer in its own right. Many new companies, deterred by the regulatory and capital requirements of the industry, have opted not to become regulated insurers themselves. Instead, they develop new products and sell them to customers but rely on other, more established insurers for balance sheet capacity.

“We will underwrite and carry the risk ourselves,” said Mr Pender. “You don’t often see people doing that. We aren’t a distribution play, we are a full insurer.”

Mr Pender said that the company is in talks with regulators, but does not yet have full approval to operate. “We conceived the idea 18 months ago and we believe we are progressing well with the regulator. We feel very confident about where we are at.”

“We have secured our financing. We believe that a fundraising of this size puts us in a strong place as a new business.”