The insurance telematics sector has reached a key point in its maturity arc, where experienced founders are starting their second companies in the space. An example: Steve McKay, who co-founded DriveFactor in 2010 and moved with the company to CCC Information Services when it was acquired by that company in 2015.
Now, he’s moved on from there to launch Pouch, a new insurtech that aims to capitalize on the newfound momentum behind telematics, especially in the commercial space.
“The hype cycle for insurtech and telematics has turned around,” McKay says. “There’s more willingness to fund” after a period where telematics’ slow adoption rates had drawn attention away from it, he explains. “Telematics didn’t take over the world instantly, but now the combination of its momentum and insurtech in general created this opportunity. As prices have come down, penetration has gone to smaller and smaller fleets.”
With that in mind, Pouch is targeting small businesses with small fleets like contractors, landscapers or florists. It’s device-agnostic, with the idea that it will be able to sell insurance to companies already using some sort of fleet-management hardware by promising a smooth integration with the platform the business owner is used to -- not to mention drawing on the data they’re already collecting as well as easily accessible third-party information to provide quotes quickly.
“We want to work with everybody, in part because increasingly customers will come to us with telematics already installed,” he says. “We’re betting that a really short user experience will make a big difference. As close as possible to one-click buy as we can get is the goal.”
For companies that are interested in the usage-based insurance model, but don’t have hardware already, Pouch has partners that it will refer customers to. It’s currently live in Illinois, with policies underwritten by Stonegate Insurance. The company has also raised seed funding from ILS Capital. The funding total was not disclosed.
