Insurers looking to make bold moves in technology innovation have found a new best friend: The startup community.
Commercial lines insurer XL Group announced a venture capital fund, XL Innovate, that will "have a strategic focus on developing new capabilities in the insurance sector." The company joins such peers as AXA, which announced a 200 million venture capital fund of its own in February, and American Family, whose American Family Ventures launched in partnership with Microsoft last year.
In addition, several Des Moines-area insurers, including The Principal and Farm Bureau Financial, have partnered on a startup accelerator that will bring minimum-viable products from six startups to the fore in May.
"We are very excited to launch this new initiative, which will extend XL's capabilities in existing markets and give us new opportunities to address some of the most pressing and complex risk problems in the global economy," said XL Group CEO Mike McGavick in a statement. "XL Innovate is an important step as we continue to drive our focus on innovation forward and secure the relevance of XL and the industry well into the future."
The fund will be led by Tom Hutton, a former XL director who most recently founded an insurance analytics tech startup focused on the renewable energy industry, New Energy Risk. Sarah Street, currently XL's chief investment officer, will also work with XL Innovate as a board member after the company's acquisition of specialty insurer Catlin closes as part of a new role focused on strategy and innovation. In addition, Greg Hendrick, who will become chief executive of XL's reinsurance operations after the Catlin deal is complete, will help connect XL Innovate's portfolio companies to the company's clients, brokers and insurance and reinsurance underwriting. Other team members will have "successful experience in identifying, funding, and growing innovative ventures in financial technology and insurance," XL says.
"We look forward to being a unique partner to entrepreneurs with the vision and ambition to address new risks with new solutions, unconstrained by geography, scale, or traditional thinking," Hutton says in a statement.
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