Coronavirus: Pay-by-mile motor insurer secures £15m funding boost

May 21, 2020

A pay-by-the-mile car insurer which has seen a surge in demand from locked-down motorists during the COVID-19 pandemic has tapped a division of one of Germany’s biggest lenders to lead a new fundraising.

Sky News has learnt that By Miles, which has been a vocal critic of established rivals' unwillingness to refund premiums during the coronavirus crisis, has secured £15m in a Series B funding round.

The new investment is being led by CommerzVentures, the venture capital arm of Commerzbank Group.

By Miles, which is targeting rapid growth among 19m 'low mileage' drivers in the UK, says it had its strongest ever sales week in April as motorists sought better value from their car insurance policies.

The company, which has sold 20,000 policies since it launched in 2018, says its customers have driven nearly 39 million miles since then.

Its business model targets motorists who drive fewer than 7,000 miles each year, and argues that it makes insurance pricing fairer than the industry's giants.

By Miles' policyholders pay a fixed upfront cost to cover their car while it is parked, with a separate per-mile rate charged to cover driving.

The company says it offers those who predominantly use their car at weekends or for regular short trips substantial savings over conventional policies.

Since the UK lockdown began in March, few of the major players have offered partial refunds despite the 'stay at home' instruction from the government that was in place for more than six weeks.

Last month, Admiral broke ranks with the industry and said it would give a £25 rebate to customers.

James Blackham, By Miles' co-founder and chief executive, said: "This crisis has shown UK drivers what we've known for a while: the way car insurance works now isn't working for everyone.

"They're rightly questioning why they should pay for insurance they're not able to use, and asking why traditional car insurers can't provide a flexible alternative to meet their needs."

The new fundraising is expected to be publicly announced on Friday.

Paul Morgenthaler, a partner at CommerzVentures, said: "Car insurance needs a shake-up if it is going to remain relevant in a world of semi-autonomous, connected and electric cars.

"In the current climate, insurers can't ignore that - drivers want more flexibility and fairer pricing."

Existing By Miles investors including JamJar Investments, Insurtech Gateway and Octopus Ventures also took part in the fundraising.

The company's valuation is not expected to be disclosed.

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