The media release described Tic:Toc – which launched in 2017, one year before the video sharing network TikTok - as “Australia’s first and only digital-lender and platform company.” On his LinkedIn page, the firm’s founder and CEO, Anthony Baum (pictured above), says his fintech firm has a “single vision to change the way Australians select their home loan.”
Insurance Business asked Scott Gunther (pictured immediately below), general partner at IAG Firemark Ventures, why they invested in the digital lender and what challenges it helps the insurer solve?
“Our investment into Tic:Toc was more about how we could help Tic:Toc to deliver insurance as part of their customer journey, making the home loan and insurance journey seamless,” said Gunther.
The release said the investment is part of IAG’s foray into supporting innovators with disruptive business models and will help Tic:Toc embed additional products and services, such as insurance, into its proprietary platform.
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Gunther said the investment recognises that the market share for digital mortgages is growing.
“In the future, we see an opportunity to provide insurance for these customers at the point of sale,” he said.
Gunther said the current gloomy economic conditions - including interest rate hikes impacting the housing market – did not influence the decision to invest.
“Tic:Toc has shown strong growth metrics since we invested in them in 2018, and they continue to grow as a PAAS business,” he said. “As such the current economic outlook did not factor into our investment decision.”
Baum said IAG’s investment allows his firm to continue to modularise, adapt and scale their proprietary platform for different use cases, not just home insurance.
“How insurance will be integrated in this journey is simple: once the customer is approved for the home loan, we will be able to easily offer them a quote for home and contents insurance with just a few additional questions in the application flow,” he said.
In the release, Baum mentioned “solving critical market problems.” He said these concern the “extremely inefficient” way the majority of lenders assess home loans.
“Tic:Toc’s platform broke ground in Australia in lending automation, offering the capability to fully automate home loan assessment and fulfillment, while maintaining industry leading standards of credit quality,” he said.
Baum said the flexibility and adaptability of his platform allows the “plug and play” of individual modules based on the user’s needs. There is also an increasing customer demand for faster and better digital experiences, he said, which Tic:Toc’s platform also enables.
“The result is being able to quickly and easily embed those capabilities with a tried, true and tested functionality,” he said. “Enterprise clients can therefore access new markets with improved economics via lending automation.”
Baum described embedded insurance offerings in the digital home loan space as solving customer demand for “a digital fulfilment experience” from “products in a bundle where they will help to create more convenient customer experiences.”
In the future, Baum said, Tic:Toc will expand its embedded insurance – which currently include lenders’ mortgage coverage - to include home and contents insurance.
Founded in 2016, Firemark Ventures has spent many millions of dollars on new companies.
In 2020 the firm contributed millions to Melbourne-based rural technology firm Digital Agriculture Services (DAS). According to a report by the Australian Financial Review (AFR), IAG opted not to disclose specific terms of the transaction.
The DAS website say the firm is “on a mission to build the best SaaS company dedicated to financial services and agri-enterprise.” DAS applies machine learning and artificial intelligence (AI) to develop rural data-powered solutions aimed at transforming the way rural assets are assessed, valued, and monitored. The company launched in 2017 in partnership with the Commonwealth Scientific and Industrial Research Organisation (CSIRO).
That investment followed the injection of an undisclosed sum into AI analytics firm Arturo. The firm uses satellite, aerial and drone imagery to deliver property information.
“Arturo technology has the potential to help reinvent how we support customers, by using accurate property data quickly so that we prioritise customers who need help most after an event like a bushfire or a flood,” said Gunther when the investment was announced.
