State Auto launches $25 million venture fund for insurtech
State Auto Labs Corp., the innovation arm of P&C insurer State Auto, has launched a $25 million corporate venture fund to support entrepreneurs and innovations in the insurance industry. The company will collaborate with VC fund Rev1 Ventures to identify transformative technologies and become an early adopter.
All of the money from the fund will be provided by State Auto, but the carrier is leaning on Rev1 to help it identify the strongest startups to engage with, says State Auto Labs managing director Kim Garland. The idea is to combine State Auto's domain expertise in insurance with the venture fund's eye for promising companies.
"Insurance's reputation is a bit slow, bureaucratic or difficult to work with, so entrepreneurs may be nervous about engaging with a large corporation," says Garland. "If you think disruption is going to come from entrepreneurs and outside the traditional insurance ecosystem, VC is probably the model it comes from."
State Auto Labs, which launched last year, is "doing a lot in sensors, telematics for cars, smart homes for houses, wearables for workers’ comp," Garland says. However, the increased funding will allow it to bring more insurtechs into the fold and expand those initiatives while adding more.
"As we get a lot of flow of startups pitching us, a lot of those things can help our core business do better," he says. Labs is "taking the latest and greatest things built by entrepreneurs and integrating them into our core business," he adds.