Widening the Footprint of an Underused Insurance Vehicle

It’s hard to point out a thing that human beings just haven’t been able to excel in, and yet it’s harder to figure out what we do better than growing on a consistent basis. This progressive approach, on our part, has already got the world to hit upon some huge milestones, with technology appearing as a major member of the stated group. The reason why technology enjoys such an esteemed stature among people is, by and large, predicated upon its skill-set, which ushered us towards a reality that nobody could have ever imagined otherwise. Nevertheless, if we look up close for a second, it will become clear how the whole runner was also very much inspired from the way we applied those skills across a real world environment. The latter component was, in fact, what gave the creation a spectrum-wide presence, and consequentially, kickstarted a tech revolution. Of course, this revolution then went on to scale up the human experience through some outright unique avenues, but even after achieving such a monumental feat, technology will somehow continue to produce the right goods. The same has grown increasingly evident over the recent past, and assuming one new insurtech-themed development shakes out just like we envision, it will only make that trend bigger and better moving forward.

Authentic, a turnkey insurance player, has officially introduced a “Captive in a Box” insurance platform, which is designed to help any Vertical SaaS company, franchise, association, etc., launch captive insurance programs for their own members in a matter of weeks. According to certain reports, the stated platform comes decked up with the necessary means to handle all of the logistics of setting up a captive insurance company. But what’s that supposed to mean on a more granular level? Well, for starters, the product will take care of all the legal legwork connected to insurance operations. This includes setting up a domicile from the start, fulfilling the administrative obligations, and plenty more. Next up, we must acknowledge the platform’s underwriting capabilities. Here, Authentic is able to assist you in regards to stuff like filling rates with the relevant regulatory authority and performing actuarial analysis. The stated feature also proves useful when it comes to offering an extensive lowdown on something as critical as pricing. The platform in question further puts a valuable element on the offer by bringing dedicated reinsurance and capital-related facilities. Hold on, we aren’t done yet, considering we still haven’t talked about the platform’s claims management angle, which bears the responsibility to unburden you from the complexities that come on the back of such an operation. As for how it will do the same, the answer is rooted in high-quality customer servicing, alongside other customer-centric features.

“Over the last few years, we’ve seen a lot of software startups becoming FinTech companies by embedding payments and lending products to monetize their customer base,” said Marc Schroder, founder of MGV. “Insurance is the next embedded product, but what makes Authentic a win-win is that software companies, roll-ups, etc., can create a new revenue stream while its members get hyper-tailored insurance policies at a fair price,”

The development provides an interesting follow-up to one NAIC report, which revealed how nearly 90% of Fortune 500 companies utilize captive insurance, a form of “self-insurance.” You see, speaking in the simplest of terms, captive insurance allows an organization to create their own insurance companies rather than buying insurance from a broker or insurance carrier. The incentives for doing so include creating an additional revenue stream for parent companies, tailored insurance coverage, lower insurance premiums, and more. However, despite these clear benefits, only large corporations have utilized captive insurance companies so far due to the cost and complexity of setting one up. Turning our attention to relatively smaller Vertical SaaS companies and franchises, they would have only two ways to monetize insurance. Firstly, they could sell their leads to insurers and receive a one-time lead fee, or if not that, their second option was to partner with an insurance broker or carrier and get a commission on each policy sold. Fortunately, Authentic’s latest brainchild eliminates these limitations, but it does keep what was working before. Basically, while the platform still allows you to earn commission on every policy sold, it also leaves the bigger chunk of underwriting profits with the partner. Furthermore, the process of becoming one such partner is also very easy, considering you just have to insert a line of code into your platform to start selling insurance.

Already boasting a waitlist of customers who wish to use its platform, Authentic is currently focused on Business Owner’s Policy (BOP) coverage, a coverage which it will ideally provide to businesses in the food & beverage, salon & spa, retail, fitness, and professional services’ space.

“Authentic’s ‘captive in a box’ allows them to sidestep the current distribution problems of adverse risk selection that the insurance industry has struggled to overcome,” said Sam Lessin, Managing Partner at Slow Ventures. “Authentic’s partners stand to benefit from sharing data to better assess and price risk, as they are the ones that reap the rewards from more successful programs.”