Hello! The next release of the ‘Inspire Insurtech’ series where we interview inspiring insurtechs to find out who they are, what they do, what we can expect from them in the future, and more is here!
Tell us Mercurien’s brief pitch
Mercurien’s long term vision is to build a business model and system that enables the digital monetisation of the traffic on the road network using high fidelity data gained from GPS/Telematics systems. Our philosophy from day one was to generate per second driving data and keep it all – knowing that the price of transmission and storage costs were only ever going to get cheaper.
Road usage charges are here in many ways already. We pay registration, insurance, parking and tolling charges but they are using old analogue systems like payment terminals and RFID toll tags. Location technology opens up everything from pay-how-you-drive insurance to “park and walk away” to tidal tolling based on congestion.
Our current focus is insurance. Especially in the light commercial motor fleet insurance market where we are having a significant positive impact on the safety, costs and taxation outcomes for our clients. Crash rates for our customers are declining by between 40% and 60%. We have seen instances where fleet operators claim back Fuel Tax Credits of over $500,000 and this in fact lays off the costs of insurance for the whole fleet.
We work out of Stone and Chalk in the Sydney Startup Hub but so much of the work we do is virtual, so we are big users of conferencing technology.
So how did Mercurien begin?
We started when people wondered what telematics is. We literally had to explain the concept and demonstrate how is worked. For the first five years we did pilots to pay the bills – from auto clubs to corporations – and this is how we managed to scrape by with investment from founders, family and friends keeping us going.
Good origin story!
How has Mercurien evolved since inception?
Dramatically. The advent of AWS has been revolutionary for us. We used to run servers in our offices and buy hardware at $450US a piece. So, the cost of operations has dropped a lot but the complexity in what we do has increased exponentially. Now we use multiple third party and proprietary data for speed limits and Fuel Tax claims. We now have almost 50M kilometres of data in per second increments with every risk event time and date stamped and ranked by severity of events. It’s almost a risk map of the roads in high detail.
We have found a first-rate US based hardware provider and settled on an outsourced model for most functions that are usually in house – like development, finance and marketing. This has allowed us to dial resourcing up and down as demand varied.
Eventually we decided that commercial fleet insurance was the place to be and we now have our AFSL and capacity from an international insurer. That means we are a fully formed underwriting agency and our focus is on assisting clients in the light commercial market sort out their risk and taxation on fleet operations. It’s a massive sector with over 3.2 Million light commercial vehicles registered in Australia with very low penetration of what is known as ‘telematics’ or In-Vehicle Management Systems – IVMS.
The model has also evolved so that it applies in most western industrialised jurisdictions because they all require insurance, safety is imperative, and a fuel tax regime applies in all of the US, Canada and Europe to name a few. Light commercial motor is around $750Bn is premium per year
That sounds exciting!
What is your team currently working on 2019 or what have you accomplished recently?
First of all, a big focus on the insurance sales side of things so a huge effort going in to develop relationships with insurance brokers across Australia and I’m happy to say we have written business in the last quarter!
Secondly, we are pushing hard on our FleetRisk proposition (www.fleetrisk.com.au) which is focused on fleet risk mitigation and river management and coaching. The latest development here is the creation of around 600 45-60 second micro videos linked to driving style.
This is a big step forward and will allow us to use ML and AI to tailor driver feedback at scale in an automated and personalised way.
We have also built detailed ‘Return on Investment’ calculators to help our users and potential users build a business case for what we do. The positive impacts of what we do are profound at the commercial and organisational levels. Even more so with Director Responsibility obligations getting tighter and tighter.
Recently we have expanded our offering to include partnerships with Fleetcoach and SleepFit. Fleetcoach is online driver training and SleepFit is a workplace sleep hygiene improvement program. We see both of these as integral to the end-to-end management of fleets. In particular sleep health is a vastly neglected aspect of our lives and work.
Great! We’ll be watching this space!
How does Mercurien ‘give back’?
In the normal course of our business our focus is on stopping people crashing cars. It is actually that simple. With 46% of all workplace injuries involving motor vehicles anything we can do to decrease that is a great start.
We also like to talk at industry events and functions both about our business and other crucial aspects like mental health for founders and their families and close associates.
What is Mercurien’s biggest challenge in today’s markets?
We do face the normal day to day sales issues so nothing new there. But fleet management by and large is an information/knowledge asymmetry. Fleet Managers and operators have a vast amount of information that they get from their fleet leasing providers but not a lot of it turns into actionable knowledge.
The biggest challenge we face is the reaction of fleet managers sometimes when we highlight the improvements that are possible. It’s almost that they feel like they will be subject to scrutiny for not action sooner. For example, we met a company recently that was overpaying its FBT bill by about $3.4 million. That’s the kind of number that should get the attention of the CEO!
The other challenge we face is getting to enough Insurance Brokers to explain the process approach and benefits – once they see it they totally get it. Getting people to change how they have done business for years can be hard but the progress of getting the message out there has been very positive.
Anything else you’d like to say?
We have a team of really dedicated, smart people who see the potential in the fleet and insurance space. I’d urge any broker of fleets or fleet managers to have a chat with us about improving their risk, tax and costs outcomes because the returns are substantial. It really is a great opportunity to get your fleet fit in 2019!
Michael Graham, Mercurien’s CEO