Everybody in the UK now is buying through price comparison sites. And in other parts of Europe, comparison based brokers are becoming much more common, which is encouraging really standardized products where the insurers are basically competing only on price. So although there's the illusion of choice, so if you're a customer who's in the mainstream, you might appear to have 100 to 150 different offers for your car insurance, but realistically, they're all materially the same. So that's what we call beige. You're basically just being offered 100 different shades of beige at different prices. But there's another side to the market as well. When we looked at it, we saw that 30 or 40% of customers are being left behind by that status quo. So they might see very few results on price comparison sites. So they might still go through a broker or just go without insurance entirely. So these are customers who have markers attached to them, which might put them outside the footprint of most of the mainstream insurers who basically just choose not to compete for them. Plenty of the largest insurers still only have an underwriting footprint of about 60 or 70%. And they're offering competitive prices to much less than that. So we call that other part of the market, the long tail, it has millions of profitable customers in it. But there's just not the data available to identify who's a good risk and who's not.
Give us a few examples of an underserved customer.
Yes, there's lots of reasons a person could find themselves in that long tail of customers who aren't getting as much choice. It either means they have risk indicators against them that encourage insurers not to quote for them, or it might just be there's really incomplete data available. So those risk markers could be things that you might expect like criminal convictions, or they live in a cottage with a thatched roof, or they live on a floodplain. But perhaps also people who are in the armed forces who leave their homes empty for months at a time. So they have to answer yes to that awkward question about whether they leave their home empty for more than 30 days at once. And then there's the group of customers who have incomplete data available. So they could fundamentally be a good risk, but they might have recently migrated to the UK or spent time abroad. So they don't have the same level of information on their credit file as you or I. And all of this adds up to way more people than you might think. So actually 11 million people in the UK have a criminal record. And all of this adds up to a societal issue as well. It's not just a problem for individuals. 16 million people in the UK have no home insurance or rental or possessions cover at all. And those people who are underinsured are concentrated in young segments and people on lower incomes who are the same people who are least able to absorb those financial shocks that might come with a loss event. And that holds back everybody.
I have some experience with that because I'm lucky enough to have a cottage that I go to in Suffolk at the weekend. Because I don't live there seven days a week, it falls outside the normal criteria and I have to go through a specialised facility. You don't get the same level of price competition from different insurers.
So they're probably making quite good money from you at the moment.
Well, they were until the roof blew off the woodshed outside. But we're about even now, I reckon. So I look at this and I think, well, you know, in this day and age, when there's so much data available and we live in a digital world, how has this arisen? It's a market failure. Because until now, the cost of understanding these customers and getting the data you need about them has been greater than the potential profit that comes with writing that risk. So outside of the mainstream rump of customers, insurance is actually still a pretty inefficient market. It can take years of underwriting a new segment to make it profitable, to get the amount of data that you need to really understand it. And not everybody has appetite for it. So consider the example of somebody who lives in an old listed building, for example. And until fairly recently, for an insurer to get the information they needed, they needed to send somebody out in person with a few clipboards and checklists wearing a hard hat, which is really expensive, right? You could only do that for maybe two or three customers in a day. Now you can get all that same information about that building from a variety of different databases and you can do it in an instant while the customer is still part of an automated quote and buy journey. And the cost of doing that is substantially less. So that's our thesis is that the cost of finding the information you need about these customers to make a market has come down. And that presents a huge opportunity to seek out those customers who present the opportunity to make good money.
But if insurers haven't done that in the past, why are they going to do it now? Did you sense some sort of groundswell that's going to have the industry recognize the opportunity and invest in making the most of it?
Yes, it's a great question. The thing that's changed is the pace of technology that's allowing insurers to access these customers much better than they were able to before. And those new technologies. So we're talking about the data that you need to understand these segments in more detail. Data which was scarce and expensive is becoming abundant and cheap. And the tools you need to analyze it to extract the meaning from that data. That's not just the preserve of a few doctorates from MIT. Those machine learning models you need to understand that data are now available to anybody who can write a bit of SQL. The infrastructure that all of this technology runs on is becoming much cheaper and it's based in the cloud. So it's much more flexible and scalable. The tools that you need to offer personalized customer journeys and targeted marketing. All of that is coming along at such a pace that it's going to help insurers to make a market for these customers that they weren't able to before. 10 years ago or five years ago, Robin, if you were running a commercial lines insurer and you wanted to launch 10 new products for small businesses, how long might that take? That could actually be years of work, right? You need to write a bunch of different policy wordings, get them all signed off. You need to launch new customer journeys, new landing pages. You need to write a bunch of new content to optimize your search engine performance. You need to develop targeted marketing materials. All of that would have been in really manual. So that could have been years of work. But now using digital component libraries and a bit of generative AI, you could do that 10, 20, 50 times faster. That changes the equation. So those products that it might have taken you a year or two years to get to market, nowadays you could do in a month.
Imagine if there were some insurers out there that were listening to this and the lights come on and they go, I should have thought of that a long time ago. What do they need to do to get started? What's the sort of basic ingredients that you need to do this?
Well, the insurers who are starting to see most success here have been in the insure tech space. If you're an incumbent insurer, you do have a scale and a capability advantage. But ultimately, to be successful here, you're going to have to start operating more like an insure tech. And if that's not possible at scale, you need to start with a single team that's really focused on the customer and offering them a product that they want rather than the policy wording. As insurers, we're often guilty of saying the word product when we're actually referring to a 50-page policy wording document. But now the product has to be the whole proposition we deliver to customers. It has to be relevant for them, and it has to be backed up by data-driven underwriting. So there needs to be a real mindset shift of approaching these new groups of customers, starting with a couple of easily defined groups, building an understanding of them using data, and then delivering a great product in a personalized way.
We've often written about this. Do you think it's best to go greenfield side? Is it something you can do within the existing framework of your insurance company, or is it best to start from scratch and rethink the whole way you do these things?
Well, insure techs have the advantage that this is their whole business. This will be the only thing that they do. So larger insurers should start by setting up a task force to look at niche segments, but doing that with minimal distraction to their core business. But we believe that those insurers will quickly find that the capability they build looking at those niche segments off to the side will then really quickly start to support the core business. So things like rapidly finding and analyzing differentiated data or offering personalized propositions, targeted marketing, agile, MGA, and reinsurance models to scale quickly, all of those are capabilities you develop looking at the long tail, but you could then apply those to make your core business run better and more profitably. So this isn't just writing non-standard groups of customers. Insurers have been targeting non-standard customers for years. This is doing it at scale using technology to access dozens of different segments that were too expensive or inaccessible to go after before and doing it cheaply and quickly.
It all sounds terribly easy, but is there anyone out there you can name who's actually going down this path who thinks they've done a good job of it?
Yes, the best examples so far unsurprisingly have been from the insurtech space because they're able to focus on doing this as all that they do. So take Vantia, for example, in the home insurance space. They started out focusing on non-standard segments using data to grow much faster than their competitors and doing it through an MGA model. But then they used this to go mainstream. Now they offer quotes on 97% of homes. So in the mainstream space, sure, some of the larger motor insurers are starting to increase