Alan Inskip is the founder of temporary insurance provider Tempcover www.tempcover.com which was established in 2006 and has grown rapidly to become one of the UK’s leading online provider of temporary insurance cover for motor customers, typically providing short-term policies from one hour up to 28 days).
It currently writes over 400,000 policies each year mainly younger people (students, people wishing to share car journeys) and is on target to achieve a turnover in excess on £30m later this year.
In 2017 the business won the Queen’s Award for Enterprise in the Innovation category and this year successfully completed a £13.3m Management Buy Out (MBO) with the support of private client business Connection Capital to fuel further growth.
Where did the idea for Tempcover come from?
I wish I could say this was a moment of inspiration. However, the reality was we had one too many drinks on a night out with some of our insurer colleagues and the idea for temporary insurance came up – we then registered the company the very next day and built from there.
What experience do you have in the insurance sector?
I joined a motor trade insurance business straight from university and after a short period of time began looking after all the company’s sales and marketing. Tempcover was really an offshoot of that company. Additionally, both my mum and dad have worked in the insurance industry for over 40 years so I was already ‘in and around’ the industry when growing up
Do you consider the business to be a disruptor?
We knew we were creating something special when Tempcover was developed. Annual insurance was the only option for drivers and we gave them a real, flexible and affordable alternative and essentially created a whole new industry by doing so. It’s this idea of creating viable alternatives to the norm that drives our planning and development today.
What part does technology play in the business?
Technology is the backbone of Tempcover. While our wide acceptance criteria is a huge selling point, it’s the technology we’ve developed to make accessing insurance quick and easy that generates the best feedback from our customers.
From implementing new products seamlessly to improving our quote journey, our ever-growing development team creates, tests and releases new and exciting technologies regularly which help keep Tempcover stay ahead of the curve.
What funding did you have to start the business and where did it come from?
We were lucky in so far as the old motor trade company funded the initial set up. However, as we were very lean (I was the only employee for almost two years!) those costs were small and the quick growth meant we were self funded and profitable within a few months
As the business grew what were the major challenges you faced and how did you overcome them?
Naturally, whenever a business become successful, especially in a relatively new market, the biggest challenge is becoming complacent. Thankfully our team want to grow and expand so complacency is not much of an issue for us.
We’ve also had the challenge of new competitors entering the space looking for a piece of a rapidly growing market. It’s forced us to be smarter, experiment more and truly focus on what the customer wants from a short-term insurance provider. Also, how we can separate ourselves from the crowd – offering price comparison for example.
At what point did you believe you needed to raise scale-up capital?
Our previous majority shareholder, whilst supportive, didn’t have the same ambition for the company as I did. He was already wealthy and therefore wasn’t overly driven. As a consequence, we missed some opportunities to accelerate our growth. This frustration led me to start moving forward with the MBO and bringing in private equity money.
What were the funding options you had before deciding to take investment from Capital Connection?
We had discussions with multiple other private equity (PE) houses, along with exploring the potential of a trade sale. The later option was ruled out early in the process. It was clear from discussions that any trade buyer was unlikely to be interested in backing the existing team as they already have their own management structures in place. Once we settled on the PE option is was a case of working our way through the bids. Importantly we needed to identify a PE player which both satisfied our shareholders and who we were comfortable to partner with going forward.
What has Connection Capital brought to you other than capital?
On a personal level, the investors at Connection Capital have given me and the team a great deal of knowledge, experience and funnily enough connections. They’ve shown their belief in the company and have given us all the tools needed to expedite our goals.
How do you measure success for yourself, your investors, you staff and your customers?
Obviously, there is a bottom line figure that we are all working towards, but each aspect of the business has their own goals.
For our customers, we put a great amount of stock in customer feedback and review platforms. Our team members are measured against their own individual targets, which they set themselves each year.
Our investors are keen to see the brand grow and for us to successfully expand our operations. For me, success is seeing my team engaged in the process and believing in the brand.