Background on East Coast InsurTechs
With over 500 InsurTech startups residing on the East Coast and more than 150 in the New York metro area alone, the InsurTech ecosystem can be overwhelming. For a carrier or broker looking to find a distribution or technology partner, sorting through the best companies and meeting the right founders can be multiple full-time jobs. Although hubs of activity exist in New York, Boston, Hartford, Atlanta, and Charlotte, there is no single InsurTech only focused aggregator for the entire East Coast.
This ecosystem continues to change. Successful InsurTechs from Canada, Europe, Israel, and South Africa are planting their flags on the East Coast. Three examples highlight this trend. First was Slice Insurance, an on-demand insurance platform, maintains its development team in Ottawa, and calls NYC its US home. Next was Planck, a small commercial data platform became mainstream when they opened an office in New York and gained traction with US insurers. Shortly after Inshur, a commercial auto insurance platform, expanded to New York only a couple years after being founded in Brighton, UK.
This foreign expansion to the East Coast is no coincidence. The insurance innovation triangle: New York, Boston, and Hartford is home to more than a dozen leading InsurTech VCs including IA Capital, Anthemis, Hudson Structured, EOS Venture Partners, and NYL Ventures. These VCs have gained notoriety for the increasing valuations of their portfolio and minting unicorns like Oscar Health, Lemonade, and Policygenius. Beyond startup activity, the East Coast is home to more than half of the top 100 insurance companies.
All the public excitement aside, the word about InsurTechs dominating the East Coast has not gone mainstream. One prominent Silicon Valley based InsurTech accelerator marks only 10% of its US-based carrier and broker members from the West Coast with almost 50% of its US-based members coming from the East Coast.
Why is an Accelerator Necessary?
With the current environment, most insurance innovation leaders rely on venture capitalists, personal referrals, and a mix of zoom based virtual conferences to meet InsurTechs.
The problem with the one-to-one approach being used now is that most insurers are not designed to share the innovation strategies with their peers and investors do not proactively share their best deals with carrier and broker innovation leaders. That means the best startups are often coveted by a few insurers that can afford research teams and kept in their walled gardens. This mentality runs counter to the open-innovation model necessary to push an entire industry forward. Further, it reduces the value of insurer and venture investments because the cost of innovation is not shared with other insurers.
On the other hand, accelerators publicly announce their cohorts and often run programs that bring their members together to jointly discuss challenges and solve problems. Moreover, accelerators provide a non-biased filtering mechanism that is often necessary to identify the best companies to support. Investors will always be biased for startups with the largest market and the most aggressive growth tactics and individual insurers will usually focus on solutions that are in their most mature state. These biases leave out moderate growth startups and early-stage startups.
With successful accelerator models supporting early-stage companies in Des Moines and Minneapolis, it is time for an East Coast growth-focused accelerator.
That accelerator is now open for business! InsurTech NY announced July 21, 2020, its dedicated InsurTech accelerator is now accepting applications.