AI Wisdom Ep. 32: The Rise of Insurtech Investments

Insurance Industry News & Views - April 14 2021

According to CB Insights, AI companies raised a record $33B in equity funding in 2020. AI and data analytics, data collection and intelligent text extraction as well as access to new data sources and models continue to garner the attention of insurance executives. Insurtech investments are on the rise as insurtech partnerships and acquisitions are being leveraged to accelerate innovation to meet growing customer demands.

On this episode of the “AI Wisdom – Talking Innovation in Insurance” podcast, host Ron Glozman, CEO, Chisel AI speaks with Kyle Beatty, Managing Director at American Family Ventures about the impact of COVID-19 on insurtech investments, factors driving investment momentum in 2020, and insurtech investment strategies.

Predicting the unicorns of the future is not an easy undertaking, nor is ensuring that a company is worth investing in, that they are positioned for growth and they have the right defensive moat, so how do investors know if a company is positioned for growth and worth the investment?

Sharing common philosophies and common belief sets around how the market will change and how the insurtech will effect the change as well as the distinct advantage the company displays relative to existing or emergent competitors and established incumbent service providers are just a few fundamental principles at play when venture capitalists are considering where to place their bets. Other criteria involve having the right go-to-market strategy including how the insurtech plans to acquire customers and their well-defined advantage to gain market traction, demonstrate product market fit and how they will make those advantages compound over time.

In the very early stage, Venture Capitalists are evaluating the strategy, with less focus on the very early evidence and then at the later stages, there is more focus on revenue growth, market traction and evidence of market fit.

To hear more on the criteria investors value to identify the right insurtech investments, how they measure their investments, and insurtech investments strategies, click below to listen to the full episode (listening time: 41 minutes) or read the full transcript.

Full Transcript

Ron: Hello and welcome to “AI Wisdom – Talking Innovation in Insurance.” On this podcast we talk to business and Insuretech leaders about how artificial intelligence is transforming the way we buy and sell insurance. I am your host Ron Glozman, Founder and CEO of Chisel AI and a strong believer in the power of AI to help people work smart and enrich their lives. So, let us get into it.

In March 2020, many insurtech funding rounds were put on hold due to the pandemic. Yet by the end of 2020, insurtech funding had not only rebounded, but it had reached a record high. According to a new report by Willis Towers Watson, global insurtech investment reached a global record of 7.1 billion in 2020. A total of 377 deals were completed throughout the year with the largest of any year to date with overall funding being up 12% from 2019. Deal volumes also increased 20%, and we witnessed several record IPOs with Lemonade, Root, SelectQuote, and others in 2020. What does the future hold for insurtech investments? And will we continue to see an uptick in 2021 and beyond?

I am very pleased to have Kyle Beatty, Managing Director, American Family Ventures, join me today as we discuss the impact of COVID-19 on insurtech investments, factors driving investment momentum in 2020, 2021, and insurtech investment strategies. Kyle, pleasure to have you on board. Can you please introduce yourself?

Kyle:
Thanks, Ron. It's great to be here and I'm just really excited about the conversation. Again, as you mentioned, I'm a senior member of the investing team at American Family Ventures. I just look forward to the conversation.

Ron:
Awesome. One of my favorite topics, and I think this is something that you and I share, is it's often said people fall into insurance sort of by accident and not by choice. I know in a prior life; you were a weather and climate scientist. I would love for you to share how you made the career transition into the insurance space.

Kyle:
Yes, of course. So, it's kind of an interesting journey. It was definitely not one where I was planning over my career's journey to be a VC focused on insurtech. It was something that was very evolutionary. When I was coming out of graduate school with that background around weather and climate, I was really looking for industries who cared about extreme events and cared about the science and understanding of them and it just so happened that one of my faculty advisors then pointed me toward the insurance industry. And that led me to disaster-related work and catastrophe modeling. I was extremely fortunate to have that first opportunity, which is where I began at RMS in catastrophe modeling, because it gave me exposure to all of the different disciplines that fit into the risk assessment and underwriting process. From there I just really kind of followed trying to deepen my understanding of how decisions are made around the boardroom table of an insurance company and that's what led me to Willis in the reinsurance area and then also the way in which services and different data are used in the process of decision making, whether it be for claim, or underwriting, or other places, and that's what led me to Verisk Analytics, where I was fortunate to run a division during my tenure there. I think that was a great education and understanding, again, how the insurance industry utilizes things like data and different forms of software for fueling their decisions, tactically in the moment, as well as the broader technology, modernization efforts that they might undergo as they're kind of preparing for what we're having as this, very substantial digital revolution inside large insurance companies.

So that was kind of my journey, but definitely wasn't one that was planful. The common thread through that has been just a personal connection to natural disasters and extreme events. So, I continue to be very passionate about what it takes to be resilient in the face of those events and how our changing climate system affects those. So that's been a common thread throughout that whole journey for me.

Ron:
It's so interesting because we sit, and we record this today's the 24th of February. Last week Texas, and we are based in Canada, but even here in Canada it made the news that Texas had record-breaking extreme temperatures, burst pipes, freezing temperatures that have to my understanding been, if ever, maybe never seen there or very rarely seen there. So, I think it's very interesting time to be having this conversation. So as the insurtech investor, I think you have an interesting perspective because you get to see both sides of the startups as they try to sell into incumbents, and you also have partners, LP sometimes, etc., that you work with. And you can see internally what they're like. What have you seen as far as the volume of investments, both as far as VCs and as well as investments internally being made into startups?

Kyle:
You know, to speak to the volume of investments and the size of investments in insurtech, I think that that has remained very strong if not expanded in the last year or so. I think that there's been a high degree of deal activity. In your opening comments, you mentioned how the pandemic experiences in early 2020 affected some of the broad venture markets, total volume of activity, kind of a short pause, but that was certainly more than recovered in the back half of the year. I think we've seen an extreme amount of activity that we don't anticipate will relax. We think that will remain strong for many years to come. The underlying thought behind that is that every aspect of the insurance operation is in a process of being digitized. There's a lot of room for that to take place.

There are many areas that are suboptimal, yet to be touched by technology advancement. So, we think there'll be many years to come of startups introducing new ways to solve problems in all parts of property, casualty, life, annuity, etc., all parts of the insurance ecosystem.

Ron: Have you seen, as far as the volume, is most of the investment early stage? Or have you seen a majority of the investment in later-stage companies?

Kyle:
I think it's a mix. I mean, I think what we are seeing, we had a very large wave of insurtech investing where institutional capital flowed into the venture market in around the 2015 timeframe that led to lots of early-stage investing taking place in 2015, 2016, 2017. Those companies are now maturing and so we definitely do have larger investment rounds taking place today. So, we see more late-stage rounds, and particularly in some solution sets, particularly for those areas where someone is building a company that's going to directly compete with carriers and those can be balance sheets, intensive businesses, and therefore sometimes it will require more capital. You have relatively large rounds to fuel those companies. So, I think that is one example of why we've seen some significant late stage investing. But we're also seeing a high volume of early stage investing as well. So, I think it's not one or the other, but it is based on kind of where we are. Relative to that 2015, 2016 timeframe, we are now seeing companies increasingly mature and have much more late-stage investing taking place.

Ron:
That makes sense. As far as partnerships go, what have you seen as far as incumbents partnering with startups? And are you seeing that as a result of the pandemic? Or do you think there's other underlying factors at play there?

Kyle:
Yes, I would say there's multiple factors. Well, maybe just to take a step back, we're fortunate to have limited partners that back our fund that span the insurance ecosystem. We have companies within the American Family insurance enterprise that we have an opportunity to work closely with, as well as other parties across the insurance ecosystem. So that gives us one lens into how a partnership is unfolding and I'd say that there have been digital transformation efforts or different forms of modernization efforts that have been ongoing for many, many years inside of large insurance companies. That has been kind of a steady background increase in the desire to partner with service providers that can provide ways to do claims adjustment or claims estimation differently, fraud detection, underwriting, etc.

I think what we have seen is since that 2015/2016 timeframe we're seeing the wave of insurtech startups mature to a level where their solutions are more proven in the marketplace. So, they're in a better position to move into an operational deployment with a carrier.

Kyle Beatty Quote #2 Lighter Grey

So, we have a lot more choice available for partnership with carriers. And in parallel, the digital monetization efforts have gotten to a maturity where there are material budgets allocated within insurance companies specifically to work with newer insurtech businesses.

I think, as you mentioned, the pandemic in 2020 was absolutely an accelerant. Particularly in certain areas of the insurance market, I think it was in some ways highly evident that this was true when we needed to have virtual processes ongoing because of the work-from-home nature, as well as the desire for small business owners and consumers to not have insurance personnel on site for inspections or otherwise. So, I think that was absolutely an accelerant, particularly around things that are supporting virtual customer contact, virtual inspection, virtual claims adjustment, etc.

Ron: That's perfect. You sort of touched on one of the topics I want to talk about, which are, what are the verticals within the insurance industry where you see some of these big investments, and you touched on some of them there. Are there other ones that come to mind?

Kyle:
We've seen a lot of activity in areas around property and casualty, which I kind of alluded to. What I would say is we are seeing more and more interesting opportunities on the casualty side of the market, so that's a big focus for us and will lend itself toward various forms of liability coverage, or workers' compensation, etc. That's an area that's of keen interest to us.

An additional area I'll mention is that there's a lot of opportunity for new solutions in and around life and health, particularly as it relates to the life and annuity market. When I speak to health, our focus is around things like employee benefits, etc. there's a lot of exciting companies coming forward that are innovating in those spaces. That's complementing what's already a strong amount of activity around things that are maybe more personal-lines-oriented, like home, auto, etc. So, we're actually seeing a wave of businesses across all these different lines of coverage.

Then, of course, there are the enterprise solutions that are coming along as well that are just trying to power the backend processes and I think we're seeing companies go deeper into that core technology stack. We're seeing things that are becoming closer to topics like billing systems or different forms of core infrastructure. Whereas some of the early things were focused on specific point data solutions for underwriting or point solutions for claim assessment. I think we're starting to see things that are more deeply integrated into the insurance tech stack. So, it's kind of maturing into the systems more deeply.

Ron:
I'd love to get your view and your understanding of how you identify, how you research, and what you look for as far as ideal investments to make.

Kyle:
Sure. So, in terms of how we go about our work, we focus very heavily on having an opportunity to interact with as many if not all of the insurtech-focused startups as possible. When we do that, we are agnostic around geography. We have a little bit more proximity to those founders that are based in North America and so that sometimes tends to be where our dominant orientation is, but we are really interested in any company that is going to have a material impact on the future of insurance and again, from that perspective, we think of that as property, casualty, life, annuity, and then some areas of healthcare, like employee benefits. So that's a pretty wide landscape. We do so by having each member of our team be very actively engaged in identifying and developing relationships with founders that are affecting change in those markets. We have a pretty sizable team. We've been fortunate to be able to almost double the number of our investors in the past year within our team, so that gives us quite a bit of reach. But we're also fortunate that having been a fund that started focused on insurtech almost 10 years ago, it's given us an opportunity to have the kind of relationships in the market that lends to people reaching out to us to tell their story and help us understand how their targeting change in the insurance industry.

So, a lot of the deals that we get an opportunity to evaluate are coming to us through our network. But we both go kind of strongly in terms of our outbound targeting to companies as well as responding to those that reach out.

The other thing I'd love to mention is that since we focus on the future of insurance, the future of insurance will often be dictated by trends that we see that are actually happening in adjacent areas to the insurance market and so roughly half of our investment attention also goes to things that are complementary or immediately adjacent to the insurance industry.

That will be software providers, data providers or other solutions that are essentially providing value to the customer that the insurance company is targeting. But the value proposition may be different than something that's tied to insurance. But as that company accelerates its growth, then there can be a number of different synergies. So, examples would be the mortgage industry. There are other areas around prop tech or real estate tech that we pay strong attention to.

We've increasingly been active in areas that will focus around the needs of employers and how they relate to their employees. So that's kind of the universe that we try and stay very well-connected to. And, again, we've been very fortunate to have just an exceptional group of founders that kind of tell their story to us and seek to have us be an active partner, either as an investor or as a connector. Because we do work with so many different constituents in the insurance industry one way or another.

If for whatever reason, it's not the right time for us to be an investor in a company, we still very much seek to be a partner to create introductions or otherwise try and help those companies move forward in their agenda to effect change in the insurance industry.

Kyle Beatty Quote #1

Ron: I love that. That's such a great philosophy to hear from a VC. How do you know that a company is positioned for growth and that a company's worth investing in?

Kyle:
You know, that's an interesting question. I think the best way I'll describe that is we try and start our process with a grounding in an underlying thesis around what we expect the future of the industry to look like or what we expect to be the ways in which change evolves. And so, in that regard, we're often looking for businesses that are filling whitespace that we observe and where we feel like there's a specific need. So, examples of that, as a fund, we've had defined VCs around how insurance products will be distributed and sold. We have had to find thoughts around kind of what parts of the insurance process would be virtualized. We've had different forms of thought around business areas that are adjacent, like, I'd mentioned, construction tech and mortgage, etc. And so, in each of those, we've tend to have a specific belief set around what we feel like it takes to win in that space. And that typically is something that evolves over time. So, it's kind of a growing and deepening level of conviction around that belief set. And in parallel, when we're seeing companies introduce to us their strategy for effecting change in the market, we tend to gravitate to those that have common philosophies and common belief sets to what we have around how the market will change and how they will affect it.

So, that's our first step and then from there, what we're typically looking for are different forms of distinct advantage that that company will have relative to existing or emergent competitors, relative to established incumbent service providers. And that often starts with how they acquire customers, what is their distinct advantage to accomplish that. It'll also have a grounding point in how well they've been able to demonstrate to date their product-market fit, what evidence do they have that that's in a great position. We'll definitely want to understand the defensive moat, just what is it that allows them to preserve those advantages over time in comparison to a new entrant or someone else that might come along. Then, of course, there are other arguments that can be technical in nature, such as is there a really distinct and unique technology stack data advantage or other things that can create leverage. So those are very important and then there'll be other things that can make those advantages compound over time, different effects that can reinforce those advantages, increase the scale of their defensive moat as they either grow their customer base, deepen their data kind of acquisition, or other facets come into play.

So, we're typically looking for those kinds of things. Since we invest in pretty early stages, we'll be investing as early as our first check-in in a seed-stage to something that will be later, like a series B, or occasionally perhaps a series C. Over that range, we will see companies that have different levels of proof points around these. So, at the very early stage, it will be more of strategy with very early evidence and then at the later stages, there'll be much more direct examples through revenue growth, but often it still is tracing back to these kinds of factors that we're trying to evaluate. And it's just a matter of kind of what are the sources of evidence that they have those advantages.

Ron:
That's so powerful. So, we're going to take a quick 20-second break to tell you where you can find out more information and insights about insurance innovation. We'll be right back.

[If you liked this episode of AI Wisdom, subscribe to our blog, Writing the Future: AI in Commercial Insurance at www.chisel.ai/blog for feature articles, interviews, opinions, and more.]

We're back with our featured guest, Kyle Beatty. Let's jump right into the next question. In your opinion, how will AI and other technologies impact the insurance industry in the next 5 to 10 years?

Kyle: Well, so, I'm going to start maybe by just kind of clarifying how I think of the term AI because I know, Ron, this is a topic you spend a lot of time thinking about. I always think of AI here not as a sentient kind of situation, but things that are predictive-modeling-focused and perhaps things that are bringing into kind of more advanced ways of dealing with unstructured data, and processing it, and creating structured thoughts from it. So that can be processing photos and images or text-based analytics. So, I'll be speaking from that lens of different kinds of predictive and machine learning techniques. In that context, my belief and kind of one of the theses we developed as a fund is that predictive modeling will become a pervasive component across almost all aspects of the insurance decision process.

I think there are opportunities to introduce advanced algorithms and do so every point from how one decides how to spend their marketing dollars to how an insurance company is dealing with an insurance submission when it comes in, the way in which that submission is processed, how it is parsed, how it is brought forward, who in the underwriting process actually looks at it if a person at all does need to look at it.

And just all the way through then to how that customer is served over time, where that can be everything from trying to assess the sentiment when someone picks up the phone to try and understand how to prioritize outbound engagement during the policy term to improve retention metrics. And then as we get further down the process where claims come in from first notice on through the rare case where an investigation happens or the more common case where you're trying to just support that policyholder through a claim process and do so at a mix of really strong service in a cost-effective way and in a way that produces a great outcome. I think all of those kinds of points can be shaped by having advanced predictive modeling. So, my belief is that insurance companies whose historical core analytical capability has come in the form of actuarial science will be highly complemented by data science and different forms of predictive modeling that will come from some in-house talent. It will strongly, I think, come from outside talent within the insurtech ecosystem.

Again, I believe that there will be predictive modeling services that sit and integrate across that whole chain. Now the interesting thing about that to me also is that it's not just having a better model that creates that source of value. But those models have to be based on an origin of great data. So, I think those companies that will really stand out as providing substantial unique value, they will have a strong modeling capability that is complemented by a data advantage. And that will allow a predictive modeling to replace an existing decision tree or an existing human and significantly improve the metrics that the insurance company is generating at that decision point.

Ron: I love that, and I love how you started off with explaining and defining what AI means. Because oftentimes a rose is a rose by any other name. And AI is such a broad and diverse field that starting off by defining what it means to you I think is always the right approach. So, thank you for that. And then, secondly, I totally agree there's a lot of opportunity for predictive analytics, which is really what machine learning and artificial intelligence is, to have an impact across all of the different areas that you just talked about. So, on the flip side now, as a startup trying to sell into these large enterprise carriers, what are some of the areas that we should be investing in to grow and fuel our pipeline?

Kyle: I'll probably answer that question in a couple of different ways. When you're thinking of first how to approach and how to engage the insurance company in a sales process, what I'm observing is that the insurance industry by n’ large, but specific individual players in that ecosystem have started to really streamline their process. I'm optimistic for companies like yourself sales cycles that might have been defined by one or two years with a lack of clarity on how that process evolves will actually start to move inside of six months or less. Now this is happening in pockets inside the industry, but it's absolutely happening. We've seen a number of examples where we've seen large operational contracts be committed to in less than six months. I think that that's starting from the basis of an insurance carrier first having a really clear intention around the change they want to have in that specific part of their business.

It's almost a little bit of the inverse of what we might have seen three, four years ago, where an insurance company was just trying to absorb everything that's happening around them and then try and figure out what to spend time on and what to take advantage of. It's almost a reversal right now where carriers have now digested what's possible and being very explicit on the change they're looking to see and be more clear on what the requirements are for success. So that's leading to an accelerated process. It's also leading to a quicker path for them to have the budget to truly move into an engagement. So that's, I think, a great trend for the enterprise software or startup market.

The second thing that I'm observing is that I think the startup community that is able to recognize the situations where someone is approaching their needs in a specific way, they're tending to lean into a partnership-oriented process, meaning able to have some degree of customization or some degree of proof of value that is aligning with the unique kind of implementation or the unique need of that carrier. I wouldn't say it's not a consultative service or not a customized software build strategy, but they're willing to shape their message and shape some aspects of how they implement into the process and into the needs of that carrier. So, I think that can result in a feeling that there's a true synergy, joined timelines, joined intents for value.

I think that that can result in, again, a pretty quick process to decide this is the right partner to work with. To just add one final point to that, what we counsel insurance companies is we spend time with them and provide guidance on how to really make for a successful partnership with an insurtech company. We definitely counsel on the points I've already mentioned. We also advise them to think about what that company can be in 6 months, in 12 months, in 18 months rather than defining whether or not that company is a good fit based on what they have off the shelf today. I actually think that's been a really important learning for the insurance industry, because 12 months in a startup's lifecycle is enormous amounts of time. Whereas 12 months in an insurance company's lifecycle less can change. So, it has been kind of matching these different thought processes so that an insurance company is leaning into the partner that they feel will create the value over time because of the capabilities of the team, the capital that they have access to, and the foundation they're building upon. Those things are very important to assess. So, we really encourage folks to think about potential new suppliers of technology from that lens and when all these things come together, again, we can see deep partnerships form pretty quickly.

Ron: That's really great to hear and really encouraging, I think, to anybody who's listening I would echo that I do think that timelines have come down. So, it's great to hear. Now, what are some of the common top-of-mind things that founders should have when they're trying to secure their next round of funding for their ideas?

Kyle: Well, I would say I'm going to take that group of founders and maybe narrow in to...we could put that kind of in two categories. So, we can have some founders that are trying to build insurance companies and then we have maybe a little larger set that is seeking to provide value to existing insurance companies. When we engage with that second group, those that are trying to provide value to insurance companies as a data analytic or software provider or some other form of value, I'd say that the number one thing that I really want to hear from that company, is because, again, I'm thinking of this from the lens of venture returns, because we focus as a fund specifically on generating the financial return. So, it's very important for us to understand how this service provider gets to be a very, very large business and sometimes the challenge of a vertical-specific, so in this case insurance-specific enterprise software provider, sometimes that challenge can be that when you narrow in its market reach, the actual amount of revenue opportunity can be more constrained. That can put one in a position where they need to win a disproportionate amount of market share to create the kind of outcome that the venture capital market is looking for in terms of their return profile.

So, I think it's very important to be quite thoughtful about the true size of that market, how one is going to capture a significant share of it and can that technology asset be utilized in other markets in addition to insurance.

_Kyle Beatty Quote #3 Revised

Often when we've seen things that provide value, for example, for insurance claim processes, it can also have a very large market in and around the construction or contracting marketplace. There are other examples where, again, there are two, three, four, verticals where a given software provider can generate revenue. There are separate examples where single vertical works very well because of the advantages that can reinforce and result in someone being in a winner-take-most position around that solution set. But I think it's really important to be clear on the journey the enterprise SaaS provider is taking and how it relates back to the scale of the market that they're going after. Because I think you can create enormous value for insurance companies but may not always be the size of market to create the kinds of value propositions that the venture capital investment funds need to generate. So that would be the thing I would say be important to be really specific about when you're pitching VCs about a next round of funding.

Ron: I think that's a very wise pitfall to watch out for, like the TAM is definitely something that oftentimes people think about maybe not last, but they think about not early enough. And not to say it's not a great business. But sometimes it's not an investable business as far as the VC is concerned. And there's, I think, very wisely that you point out, there's a distinction there that it can still be a good business, but it's not a VC type of growth business that will just meet the returns. And there's still good businesses out there of both types. Let's talk a little bit about M&A because we've seen a lot of notable M&A activity in the last couple of months, both with incumbent insurance companies acquiring startups and with insurtech companies acquiring other insurtech companies. Do you see this consolidation trend continuing? What do you think are some of the main drivers behind this?

Kyle: Yes, I think that, just broadly speaking, I'll tend to take this as a top-down perspective. So, as we see the overall insurance landscape becoming more and more digitized, what starts to happen is some of the barriers to entry start to come down. So as an example, as the process of acquiring customers is increasingly digitally powered, some of the barriers around geographic reach or perhaps line of businesses where one can effectively sell insurance, those start to relax. So that can result in opportunities for a digital insurer to have national scale or to roll out multiple lines of business much more efficiently, more quickly than might have been true in a more of an analog world. Similarly, as we see more and more solutions coming in to digitize specific processes, that also brings down cost barriers to introduce new services, etc.

The reason why we go down this path is as more and more of the process gets digitized, as barriers start to come down, that creates an opportunity where more parties can compete for the same customer, as an example, if we're talking about carriers selling to policyholders. Similarly, as things that might not have been transparent around price or coverage start to become more and more transparent and more shoppable, that also creates a situation where those parties that can offer, for example, the best price or the best coverage may disproportionately stand out as attractive to the small business owner or to the independent agent that's trying to support their customer or to the consumer. So, all of those things tend to create momentum around having more and more market share by a smaller number of players. If that trend were to continue to play out, that would lend itself to some form of consolidation. I think it would lend itself to being again less of this defensive space or barriers and one where now we can have a smaller number of companies that can engage the policyholder set.

So then questions about reach from a marketing perspective or any kind of proprietary pass for distribution and sales can disproportionally become valuable in that new modern digital framework.

So, if you believe that to be true, I think that can create a situation where there could be fewer winners in the future and from an insurance carrier point of view. And that might then lend itself to having some more consolidation.

Ron: That's such an interesting insight. What do you think that bodes as far as insurtech exits in 2021? Do you think given the hard market that's being experienced, at least on the insurance side, the stock market, completely different story, but as far as the insurance market, it's a hard market, what are your predictions as far as exits?

Kyle: Well, it's always hard to predict. I'd say I wouldn't necessarily connect the two points, meaning that I feel like the amount of points that I was making around the industry trend, I don't know that that'll necessarily have a direct tie to the exit environment. In general, I think what we're seeing right now is we're seeing a couple of macro things that create different forms of optionality for the insurtech companies that are starting to emerge as winners in their segments.

We've had this wave of growth going on for five to seven years with a number of insurtech companies that's resulting in some specific players emerging as having large scale and distinct points of value and market power. As that is occurring, I think those companies that are starting to emerge as winners, they have increasing choice around how they want to continue to fuel their growth. What I mean by increasing choice, there's certainly a lot of capital available in the growth stage venture market. So that is one option.

Currently, there are a number of options that are available presently and seemingly will continue to be available for the near term around having accelerated paths to public offerings through vehicles like SPAC. And then IPOs, in a traditional sense, are also something that, I think, for those companies that are becoming more and more mature, are actively in part of their options set. So, when we look across all of these elements, I think the insurtechs that are emerging will have some tough decisions actually to think about what is the best way for them to fuel their continued growth and what is the best way for them to continue to have the major effect that they are seeking to have on the insurance industry. Because despite some companies having an IPO or exiting at an impressive valuation, they still have a large amount of market share to pursue. So, I think a lot of the question will be, again, what is the best way to fuel the vision of that company to continue to grow because there is often considerable runway to pursue. It is more about finding the balance that's the right fit for their market opportunity and that company specifically.

Ron: That's so right. So, as we wrap up, is there one piece of wisdom that you can share, or you would like to share with the insurtech entrepreneurs who are listening and looking for either their first round or the next big round of fundraising?

Kyle: Well, the thing I would love to invite is just reach out to me or my colleagues if you're looking to provide value to insurance companies and particularly if you're not even in the process of fundraising, because, again, what we seek to do is to connect parties in our network with great operating partners. And so that kind of conversation often is easiest and best between financing rounds rather than when one is in the middle of a specific financing round.

I would encourage founders that are creating value for the insurance industry to reach out to us, and we would love to be helpful as they try and find new potential partners and/or customers in the insurance landscape.

That would be what I would encourage, is just to kind of get to know us. Through that, there may be things that develop from an investment conversation standpoint, but if not, we can just provide value through our network, we would love to do it.

Ron: So where can people find you and the team at American Family Ventures?

Kyle: I think probably the easiest way is through LinkedIn or through email. So my email address is just kyle@amfamventures.com, or you can find me on LinkedIn under my name. Twitter is also one place although I am a little less active than some VCs in that world. But that's @Kyle_Beatty if you want to find me there.

Ron: Awesome. Thank you so much for taking the time, Kyle. I hope everybody out there stays safe, stays sane and as always, if you want to find out more about the latest and greatest in innovation and insurance, please check out www.chisel.ai. Thank you.

That’s a wrap for this episode of “AI Wisdom” hosted by Chisel AI and me, Ron Glozman. Thanks for listening.

If you like our podcast and want to hear more, check us out at www.chisel.ai or tune in and subscribe wherever you get your podcasts: SoundCloud, Spotify, iTunes, Google Podcast, or Stitcher

Join us next time for more expert insights and straight talk on how AI and insurtech innovations are transforming the insurance value chain. See you on the next episode!

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