Alternative distribution of personal lines attracts capital
Two startups in the MTech Capital portfolio — Insurify and DealerPolicy— recently completed capital raises in excess of $100m. Both companies are thriving by putting alternative distribution channels at the core of their personal lines insurance proposition.
MTech Capital portfolio extract
Changing consumer expectations
Consumers today expect insurance shopping experiences that are convenient, transparent, and digital end-to-end. Numerous incumbent insurers have spent heavily on advertising to drive volume. However, the UK provides a roadmap for what may be the future direction of US auto distribution: Consumers ultimately value the price competitiveness that comes with choice.
Historically, few US consumers spent the time sourcing multiple insurance quotes. At the same time, agents have found high touch service for auto insurance is low margin business. New entrants like Insurify and DealerPolicy have responded by allowing consumers to shop for policies from multiple carriers in an entirely digital experience — and at a time that is convenient for them.
Insurify is a comparison-shopping site for consumers looking to buy insurance online. A seamless, digital customer journey offers transparency, value and convenience to the customer and represents a high growth distribution channel for the dozens of carriers that appear on the platform. Price comparison websites already dominate auto insurance distribution in several European markets — most notably the UK — and Insurify is emerging as a leading player in the US.
The Company raised $100m in Series B financing led by Motive Partners, a private equity investor focused on financial services.
DealerPolicy had been delivering “embedded insurance” for several years before it became an industry buzzword. Since launching in 2016, they have established exclusive relationships with hundreds of auto dealers across the US. By integrating with the finance workflows of a car dealership, DealerPolicy’s proprietary technology platform delivers a seamless insurance experience when a consumer is buying a new car. DealerPolicy can generate multiple quotes and deliver significant savings on a customer’s current auto policy. And the Company is also able to offer homeowners insurance in the same process — an attractive cross-sell.
The Company raised $110m in Series C financing led by Goldman Sachs.