“In this approach, the customer acquisition engine (often a brokerage or agency) creates a product or service that delivers value independently of insurance/risk management, but uses the resulting relationship with the customer and data about the customer’s needs to make a timely and relevant offer of insurance.”
Today, Kyle follows up his post and takes a closer look into why incidental channels in insurance are just beginning to reach their potential in influencing buyer behavior. Check out the guest post.
And earlier this month, Bunker raised a $2M seed round from investors including Hiscox and AmFam Ventures with plans to launch a product in 1099 contract insurance
I caught up with CEO Chad Nitschke (@chadnitschke) on bringing on corporate VCs at the seed-stage and the impetus for going after the 1099 space.
On choosing 1099 contractors as a target market
The workforce has evolved. Studies show contingent workers will account for as much as 45% of the US workforce by next year. The average time-to-hire has fallen from 43 days for large companies using traditional staffing methods to 3 days using online marketplace options. Insurance products and technology solutions aren’t designed for this environment. It can take days or even longer to obtain insurance, and often times the product isn’t suited to their specific needs.
It can be very painful and confusing for everyone involved. In some ways the insurance industry has perpetuated more problems than it has solved (I admit to including myself in this definition having spent my career there). It feels great to partner with a number of carriers as a broker and MGA partner to solve real problems in the 1099 and SMB space.
On taking corporate VC at the seed-stage
It’s definitely a topic that seems to be polarizing. For us, we were pretty explicit about what we were looking for, which was 1/ strategic relevance and 2/ making sure we were aligned on no special rights or board control as well as the financial ownership percentage being below a certain level.
Hiscox is one of our initial carrier partners. The investment came to be when one of the other carriers we had been talking to expressed an interest in investing. That particular relationship didn’t materialize, but when they approached us, we decided to open the opportunity up to other carriers we were in discussions with.