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Plants and boats
Hi there,
Lots of activity in the past week across new investments, partnerships, product launches, and smart perspectives.
Check them out at the bottom of this email.
Liberty Mutual joins the rise of insurer venture arms
Last week, Liberty Mutual Strategic Ventures became the latest corporate venture arm in insurance, allocating $150M to invest in startups across "sharing economy, connected home, next-gen vehicles, and insurance innovation."
The newly public insurance venture arm also announced its first deal in smart lock startup August, joining the rise of strategic insurer investments in the IoT space.
Bringing some knowledge
Clover Health's new $160M financing came just five months after its last round and was led by a new backer: Greenoaks Capital.
Interestingly, while Clover's new investor has mostly invested in eCommerce startups, it isn't new to the world of insurance. Its founder, Neil Mehta, is also a director of Greenoaks Global Holdings, which acquires and builds out insurers in emerging markets including Nigeria and Pakistan.
Clover, a data-driven health insurer for the Medicare Advantage market, is also highlighted in our landscape of some of the areas where 20+ brand-name VCs are investing within the fintech landscape today.
Q&A: Jetty Insurance
Among the segments of insurance that have attracted a wave of new entrepreneurs is the renter's and homeowner's market.
One of those startups is Jetty Insurance, which is announcing a $4M in a seed round led by Ribbit Capital and plans to launch as a managing general agent for renter's, condo/co-op, and other P&C insurance products "for urban millennials" in the coming months.
We caught up with co-founders Michael Rudoy (@mrudoy) and Luke Cohler (@ljcohler)to get their thoughts on choosing the MGA approach, the renter's insurance market today, and startup hiring from the insurance industry.
On why they chose to become managing general agent
Insurance is a very long and multi-faceted value chain with very different skills and competencies at different moments of the chain. Owning that entire chain from end-to-end including the capital side of it felt as though there was a bit of unnecessary, additional complexity vs. operating as an MGA which allows us to focus on all of our goals and focus on what we think matters most which is the customer-facing experience.
The trouble we see in the (insurance broker) approach is that after you've acquired the product, you're still left dealing with the bad old world, so to speak.
On changes in the renter's insurance market
It's a couple things. One of the biggest reasons may well be that the insurance companies themselves haven't focused on it that much. It wasn't historically a very attractive product particularly in terms of the customer segment.
Our generation is buying homes at a much lower rate, we're sort of delayed financially from the financial crisis, student loan payments are crowding out mortgage payments in some cases. Suddenly, you have a lot more customers who actually look like attractive customers, who historically would have been homeowners. There's a shift in the customer profile.
There's also been a big awareness push. Part of that has come from the real estate landscape. The increasingly sophisticated institutional real estate players continue to invest in multi-family rental and as part of that implementing best practices including mandating renter's insurance. The penetration of renter's insurance is actually growing very quickly, which is a nice tail end.
On hiring from the insurance industry
Finding someone who really knows the insurance industry and also has a good understanding of the startup methodology was definitely a bit of a challenge.
As an industry, part of the challenge comes from the fact that, given there hasn't been a ton of startup activity in the insurance industry, you don't have as many prior examples or role models of companies that insurance executives can look to and say, "Oh, I remember when so-and-so left X insurer to join Y startup." There's fewer prior examples that executives can contemplate when thinking of making the jump.
Hope you have a great rest of the week.
Matt
@mlcwong
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Four US small business insurance tech startups have raised over $60M since October 2015 across five deals. See which ones.
Over $13B flowed into VC-backed fintech startups in 2015. CB Insights analyzed a few areas where the top VCs have bet on recently. See the post.
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This Week in Insurance Tech
A curated mix of recent articles on insurance tech financings, exits, hiring, product launches, partnerships, & perspectives.
Dealflow
Clover Health raises $160M. The San Francisco-based data-driven Medicare Advantage insurer announced its $35M Series B led by Sequoia in December and has raised $295M in total.
Fortune
Shift Technology raises $10M. Accel Partners led the Series A into the Paris-based insurance fraud detection startup.
VentureBeat
Jetty raises $4M. Ribbit Capital led the round, closed in January, to the P&C insurance startup focusing on "urban millennials." Jetty also announced the hiring of CTO Davin Chew (fmr Squarespace CTO) and head of insurance Braden Davis (former head of strategy of QBE North America).
CB Insights
Jirnexu raises $3M. Malaysia-based Jirnexu in expanding from financial comparison to customer acquisition, retention and management tools for banks, telecom providers, and insurance firms including Tokio Marine and Manulife.
TechinAsia
By Insurers
New York Life backs SigFig. The $40M round, which also included Santander InnoVentures, UBS and Eaton Vance, follows up SigFig's partnership announcement last week with UBS. SigFig provides both a direct AUM platform and tools for financial services firms.
TechCrunch
Ping An Health Cloud raises $500M. The Ping An subsidiary, which provides a mobile platform for healthcare-related services and products, is valued at $3B.
TechNode
Partnerships
Allstate partners with Openbay. Allstate's partnership with the online auto repair marketplace gives its customers easier access to quotes from local service centers. Openbay raised seed funding in 2013 from investors including GV and Andreessen Horowitz.
Insurance Journal
Allianz partners with NightSwapping. Allianz will provide up to $500,000 in home insurance for host members on the platform.
Travel Pulse
Aviva partners with The Founders Factory. Aviva will work the accelerator's startups and also make a strategic investment in Founders Factory through Aviva Ventures.
Telegraph
Company & Insurer News
Ping An joins R3 consortium. Ping An becomes the first Chinese member of the consortium collaborating to develop commercial blockchain applications.
Reuters
AIG to offer crowdfunding insurance. TAIG is set to launch "Crowdfunding Fidelity", a product developed to protect investors on certain equity crowdfunding platforms against fraud.
WSJ
Gusto goes on insurance offensive. Gusto plans to begin selling health insurance plans to its customers in California today.
Bloomberg
The tech entrepreneur who accidentally built a billion-dollar company. Ozy profiles the story of Steve Yi and his 5 year-old insurance referral company, MediaAlpha.
Ozy Media
Blog posts & articles
Small businesses need a better way to buy insurance. Rashmi Melgiri (@rmelgiri) of CoverWallet on current problems of obtaining small business insurance and how technology can help.
PropertyCasualty360
Alternative datasets are enabling improved underwriting. Ali Hamed of CoVenture (@alibhamed), Drew Aldrich (@drewkaldrich) of AXA Strategic Ventures & the Cornell VC club put together a research report on the significance of alternative datasets in lending, insurance, and hiring.
Medium
Can startups disrupt the cyber insurance market? Mahendra Ransinghani (@mahendra_gr) of Secure Octane on some of the opportunities for newcomers in cyber insurance.
TechCrunch
Insurance startup ecosystem. Chris McCann of Greylock Partners (@mccannatron) on what is changing in the insurance space and why it's happening now.
Greylock
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