Insurtech MGA auto companies choose the right size

“The lesson from insurtech 1.0, as we say, is that massive growth over anything else doesn’t do you any good in the long run,” Koffie co-founder and CEO Ian White (pictured) explained. “We are big believers in good writing.”

This method is attracting the attention of investors. Launched in 2019 with a focus on the business and transportation sector, Koffie has attracted three rounds of funding, including a Series A that was announced on July 19. The Anthemis Group led the new round, which also includes existing investors Lerer Hippeau Ventures and Plug and Play. Activities. Several new investors joined the round including CP Overture, Breakout Capital, Two Lanterns Venture Partners and “a select group of angel investors.”

The company does business in Tennessee, New Jersey and Illinois and currently employs approximately 30 people. The funding supports plans to expand to 10 states by the end of 2022, strengthen existing operations and hire more people.

Koffie’s target customers include the US trucking fleet, many of which are independent trucks or small businesses with one or fewer vehicles. The company’s MGA business was launched about a year ago, and Koffie now insures more than 1,000 vehicles, the company said.

Insurtech in many ways

Koffie uses real-time data and machine learning models to evaluate cars and drivers.

This translates into a number of processes that are faster and more detailed than the industry standard.

While older insurers in the area can take six to 10 weeks to get a quote, Koffie can log in in seven minutes and produce a quote in less than a day, White said.

The company is also looking for telematics and exterior cameras, and its customers are 100% compliant, he said, as a prerequisite for availability.

“If an insurer likes the Koffie program but for some reason doesn’t want the cameras, that’s not good enough,” White said. “This is moving forward in risk selection and pricing and underwriting, because we learn a lot about insurance.”

Koffie also adds several writing features that look at drivers and devices in more detail.

“We’re looking at about 300 things about the car, from … where it’s been used. We look at accidents, inspections, machinery – is it a day cab, sleepers, etc…,” White said.

There is also a customer review of upcoming technology, such as if the car has electronic cruise control, collision avoidance or other advanced driver control systems.

“This allows us in our model to know that the best decile of traffic is four times safer than the worst decile of traffic,” White explained.

In other words, data is a rich part of the underwriting equation.

“We use data all the time, from risk selection to real-time control,” White said.

Working with partners, Koffie focuses on finding out how to use insurance and equipment. That could lead, in part, to a unique price based on the technology being used, White said.

Agents needed; immediate benefits

As part of a new wave of insurtechs, which White refers to as “insurtech 2.0,” the goal is to continue to grow efficiently and rely on other insurtech businesses that were previously hidden.

“We are thinking of writing a premium [for] complex insurance policies that require expertise and technology-supported relationships, [with] very low investment costs through a subsidiary,” said White. “Going direct, that’s great…but there’s a lot more that brokers offer. Working closely with agents to make them successful is important. “

Although Koffie is not yet profitable, White said the company will get there in the next two years. The company plans to get there through new products and other domestic strategies.

“We’re going to have to do a lot better to achieve that,” White said. “So far, we’ve won this.”