Recall that an article in last week’s Wall Street Journal noted that, “Insurance is becoming a fashionable bet.” More specifically, the article stated that: “More venture capitalists now are looking at new companies that want to displace the insurance agent, rather than the loan officer.”
With this background in mind, Matthew Patane reported in the business section of yesterday’s Des Moines Register that, “When Burch LaPrade was preparing to launch a startup based around insurance, he didn’t know there was an industry already for ‘insurtech.’
“‘I didn’t even know that was a thing,’ LaPrade said.
“Now, though, his company Gain Compliance has joined a growing wave of insurance-technology startups.
“The insurtech industry has emerged and grown, particularly over the last two years, as more investors and entrepreneurs look to alter the entrenched ways of U.S. insurance firms.”
The Register article noted that, “Investment in insurtech companies reached $580 million to $740 million in 2014, according to reports from CB Insights and Financial Technology Partners. It topped $2.6 billion in 2015.
“Insurtech startups have focused on new forms of insurance, such as on-demand products, to changing distribution and underwriting systems, to applying data to better estimate premiums.
“And, in central Iowa, it may represent a new wave of startups similar to the slate of financial technology firms that emerged over the last decade, such as Dwolla, Banno and Smarty Pig.”
Mr. Patane pointed out that, “Gain Compliance is one of at least two insurtech startups that have launched in the Des Moines area since August. Founded by three ex-Workiva employees, it is developing software to help insurance companies improve data quality used in compliance reporting.
“The second local startup, Denim, has developed a social media advertising platform for companies to use to promote their agents.”
Yesterday’s article added that, “‘I think we’re at one of these points in time where the insurance industry is figuring out, ‘Hey, we can’t continue to sit on the sidelines” of new technology, Denim co-founder Gregory Bailey said.”
