Last year, insurance companies ramped up their interest and support of technology startups significantly as the industry faces disruption from the digital customer revolution. That’s good news for Brian Hemesath, the managing director of the Global Insurance Accelerator, a Des Moines-based partnership between seven insurance companies aimed at getting innovative insurance-focused technology ready for market.
The accelerator announced its second class today after a very successful first year, Hemesath says – and there were twice as many applicants this year compared to last year.
“There’s ample opportunity created by insurers who are opening the door to new technology that solves industry problems,” Hemesath says. “Entrepreneurs may not have a lot of industry expertise, but they see the opportunity.”
The five companies selected -- Smart Drivinc (St. Louis, Missouri); Fluttrbox (Montreal, Canada); WeSavvy (Dublin, Ireland); Telematic (Madison, Wisconsin); and Serious Social Media (Orange, California) – will relocate to Des Moines for the 100-day program that kicks off on February 9. Each team begins with $40,000 of seed capital and gets office space, one-on-one mentorship, business development training and access to a network of insurance executives and carriers, investors and industry leaders with the goal of producing a nearly finished product to present at the Global Insurance Symposium in late April.
In exchange for the support, the seven insurers -- American Equity Investment Life, Delta Dental of Iowa, Farmers Mutual Hail, Farm Bureau Financial Services, Grinnell Mutual Reinsurance, IMT Insurance Company and Principal Financial Group – receive a six percent stake in the company.
But they aren’t the only insurers involved. Several other companies, including AIG, Nationwide and Transamerica, have offered their executives as advisors. Hemesath says more than 20 insurance carriers in total are involved with the startups, compared to about a dozen last year.
“It’s refreshing for a lot of [insurers] to have some outside views, and they’re very interested in the way the startups approach problems,” Hemesath says. “Startups aren’t carrying a lot of baggage, they tackle regulatory and compliance later in the innovation process -- whereas most insurers do that very early on.”
The accelerator was organized with a three-year plan, Hemesath says. Last year was successful, but with a year of experience under their belts the insurers are prepared to offer more structure to the companies this year.
“Our investors are starting to understand their cadence in all this – they did not understand what an early-stage startup looks like,” Hemesath says. “It’s really about finding the startups that the insurance companies want to support.”
With so much more interest outside the founding seven insurers, and more time and experience, Hemesath says that after a strategic planning meeting this summer, the initiative is likely to take on more funding and expand even further.
Register or login for access to this item and much more
All Digital Insurance content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access