Q&A w/ Indio CEO. Facebook vs. Admiral. This week in insurance tech.
Startups in insurance (and) industry
Over the past couple years, startups working on industrial use cases for the Internet of Things have gained the attention of investors — and insurers.
Earlier this year, AIG, one of the three largest workers’ comp insurers, invested in and partnered with Human Condition Safety, which is developing wearable devices and analytics to improve worker safety.
This week, Relayr, which makes sensors to monitor industrial equipment, raised $23M in a Series B led by Munich Re/HSB Ventures. Relayr plans to partner with HSB to make customized insurance products to facilitate IoT infrastructure investments by Relayr’s industrial customers.
Here’s a look at how industrial IoT financing deals have taken a greater share of deals going to the broader IoT ecosystem. As more industrial sensor technologies and the data they collect become relevant to insurers in workers’ comp and other use cases, we’ll continue to monitor how strategic moves develop.
Q&A: Mike Furlong, CEO, Indio
Over the past year, there’s been a host of new investments into emerging startups going after the small business insurance market. The latest went to Indio, which is looking to provide streamlining and management platform for commercial insurance brokers and this week announced a $2M seed round from investors including NEA, Compound, and Hiscox (the latter of which has also invested in and/or partnered with startups distributing small business insurance such as Next Insurance and Bunker).
We caught up with Indio CEO Mike Furlong to chat about his startup’s take on small commercial, starting up in insurance vs. other financial services, and more.
On proving a workflow management platform for brokers vs. creating a digital broker
When we looked at the space as well as similar industries, replacing incumbents has typically happened in industries where the products are more commoditized. In commercial insurance, the products are not commoditized and very complex. We think that a human broker is actually highly necessary, but they spend a lot of time on manual ops and in a pen and paper manner.
You couple that with the fact that small business acquisition is really difficult digitally and that there’s really no cost savings by going around the traditional broker, we thought there were various headwinds that make it difficult to grow quickly as an online broker and that empowering existing traditional brokers would be a more effective way to innovate in the industry.
The tailwinds that we see that could change things dramatically have to do with consumer expectations with things moving digital. A lot of the brokers we speak to day to day are desperate for some sort of digital solution to make the user experience better but we believe that type of technology will be driven by the brokers adopting it and pushing it out to their end users.
On customer acquisition and pricing
In terms of thinking about brokerage acquisition, I think it will sort of be a hybrid model. We’ll be going out and contacting brokers individually as well as working with groups of brokerages, whether they are wholesalers, associations, aggregators, bigger brokerage shops that are acquiring smaller brokerages. Working with those centralized places to help distribute our platform is a go-to-market strategy.
We will charge a software fee to brokers similar to what they pay for other services like Patra or ReSource Pro.
We’ve seen more entrepreneurs start up in insurance after gaining experience in other areas of fintech. What are some observations you’ve noticed having made that shift as well?
At Sliced Investing, we built software for financial advisors and brokers. I think there’s way more energy and excitement from carriers and brokers about technology than what I noticed in wealth management. A lot of financial advisors were immediately put off by the technology platforms that entered the space. In financial services, it’s very difficult nowadays to innovate on the asset management buy and get better performance through technology.
P.S. Uber board member and chief advisor David Plouffe will be joining us at The Innovation Summit in Santa Barbara, CA from Jan 10-12th to chat regulatory hurdles in ridesharing/autonomous vehicles, Silicon Valley in DC, and more. Join us here.