This article originally appeared in the March/April issue of Startups Magazine. Click here to subscribe

The concept

The idea for Peppercorn started, as all great ideas do, at a desk in Lombard’s home with a pen, a blank sheet of paper and an idea, an idea that was sparked when Lombard was involved with his second insurtech startup, another motor insurance company called Hedgehog.

The premise of Hedgehog was to have no inbound call centre. It instead used online forms to enable customers to be able to self-service with the option of utilising a digital chat function as the primary form of customer support. Lombard found that “customers embraced it. They didn’t need a call centre.”

It was at this point the entrepreneur understood that the way customers wanted their needs met was changing, and the opportunity for AI to offer insurance services to the customers in a way they wanted was ripe.

It's the personalisation, ease of use, and operational cost savings – which are being passed onto the customer – that are just a few of the key selling points which will surely see the company as the future of insurance.

“Peppercorn is a very deep, very specific, [conversational AI driven] assistant that will help the customer navigate the whole process of buying insurance or answer any questions they may have. It’s a conversation. It knows all about our Peppercorn product and not much else. However, if you ask it to tell you a joke, we have put in a cheeky little easter egg,” says Lombard.

Driving insurance into the 21st century

Insurance has been a mostly staid industry for the past 40 years, but with the rapid evolution of sophisticated technology, the progression of utilising a smart, intuitive, digital assistant is a natural, needed and exciting step into the 21st century.

At the end of December 2022, the Peppercorn platform officially launched on confused.com, the first of their planned online comparison sites rollout, and already customers are rating them 4.7 out of 5 on both Trustpilot and Google reviews. This is something Lombard is “incredibly proud of”. Not only this, but in 2022 Peppercorn was cited as “one of the top ten insurtech startups to watch” by Insurance Post.

The thing that resonates with Lombard is that customers don’t need, or necessarily want, an office or a call centre to sort out their insurance needs. They want the freedom of using online tools that really speak to them, that understands exactly what they’re asking and what they need, at a time, date and place that’s convenient to them.

“The next revolution is being genuinely accessible through multiple digital channels, not just the web. Technology, AI and NLU are really turning this around. [Rather than being on the insurer's terms] a customer can take as long as they like, ask all the questions they want and choose the channel they want. It’s 24/7.”

The Peppercorn platform, to their surprise and delight, has resonated across all age ranges. Lombard believes that most people now know how to use AI, and its popularity is shifting power in favour of the customer. And because there is no call centre, the team are entirely remote which reduces their carbon footprint, making them more environmentally friendly.

“[I think] the pandemic helped people get used to using digital technology that they maybe didn't use before. Almost everybody is either a WhatsApp user or has some experience of a digital messaging platform in some shape or form.”

The challenge of funding an idea

“It's an interesting challenge,” says Lombard. “What we found was…we were too small for venture capital. And we were slightly too big for Angel [investment]. Plus, we didn't have a proof of concept. What we were talking about was we wanted to build this [platform]. So, it was tough…but we did have a really strong team, a good plan, and a whole load of experience and we could demonstrate what it could look like.”

Lombard and the Peppercorn team finally raised £1.8 million in funding from investment platform, EHE (Entrepreneurs Helping Entrepreneurs), a network of investors who invest in teams, above anything else.

Teamwork makes the dream work

Ideas are nothing without the people who make them happen. This is where the adage ‘work smarter, not harder’ resonates with Lombard, and a significant part of their investment went towards ensuring the right team was in place to take Peppercorn to the next level.

However, building a startup isn’t without its challenges, as the team are being asked to take a chance on an idea that may not become successful. But, leading with a powerful concept allowed them to understand the platform, how it could grow and how they could add value to it. This ensured they were absolutely invested in its success – which is key to allowing a business to thrive.

In fact, Peppercorn are so certain their platform is the future of insurance, that they are planning on offering it to their competitors later this year.

“It’s hard for a large insurance company with all their existing customers to suddenly change the way they operate. The investment they’ve got in legacy systems is massive.”

“Now we can demonstrate how [our platform] works…we’re going to offer it to our competitors to allow them to benefit from the technology so that one, customers get a better experience and two, on a business-to-business level, it can reduce costs.”

What makes Peppercorn special?

The thing that makes Peppercorn stand out is that they’re not an insurance company. They’re an insurance platform and they know the motor insurance market well, but what they actually are is an AI company wrapped in insurance packaging.

“It can do clever stuff when it comes to risk and automation…it also does some clever stuff around fraud prevention, underwriting and pricing. It’s very dynamic.

“We’re really a technology company. Insurance is proving the concept.”