The days of the pushy life insurance brokers who view people as walking dollar signs is over. While most life insurance searches begin online, more than 90% of policies are secured through an in-person interaction with a broker. Recognizing this inefficiency, Black Bear Life is an independent insurance company that develops, underwrites, and services its own policies; all online. In less than ten minutes, people can secure dynamic and competitive life insurance policies with a few clicks, fueled by the company’s proprietary technology. All customers need to do is answer seventeen questions and they are on their way to securing coverage; no health exam or blood test. The Brooklyn-based company is also dedicated to giving back; 4% of company revenue is donated to families that are financially struggling due to the loss of a loved one who lacked proper life insurance coverage.
AlleyWatch interviewed insurance industry veteran founders Brett Smith and Tim Stoner to learn more about the company’s inspiration, traction, and future plans to build next-generation life insurance.
Tell us about the product or service that Black Bear Life offers.
Black Bear Life is a next-generation insurance company that is re-engineering the life insurance experience to better serve consumers and their communities. Our underwriting model allows customers to obtain term life insurance policies in minutes without the need for blood tests or medical exams. We are a cloud-based company that uses analytics, third-party data sources, and the latest SaaS solutions to provide an 85% overhead cost reduction over legacy life insurance companies.
How is Black Bear Life different?
Currently, all startups in the life insurance space are platforms with direct ties to legacy companies for their products, underwriting, and infrastructure.
Since Black Bear Life is an independent life insurance company, we can develop, underwrite, service, and instantly issue 100% of our policies online, reducing the time to issue from an average of 2 months to less than 10 minutes. We believe that it’s important for technology to improve the customer experience, but this shouldn’t cause policyholders to sacrifice benefits. This was the premise for our business model.
Since Black Bear Life is an independent life insurance company, we can develop, underwrite, service, and instantly issue 100% of our policies online, reducing the time to issue from an average of 2 months to less than 10 minutes. We believe that it’s important for technology to improve the customer experience, but this shouldn’t cause policyholders to sacrifice benefits. This was the premise for our business model.
We developed mutable products so policyholders can easily amend their coverage in the future, so it stays current with life’s event changes. Over the past 300 years, the life insurance industry has shown us that people have and will continue to use – and prefer- a licensed professional for guidance during this process. Black Bear Life will be the only life insurance startup that offers products through established brokerage channels, which is where over 90% of all policies are sold today.
We are also community-focused and dedicated to giving back. That’s why 4% of our revenue is donated, on behalf of our policyholders, to create awareness and support families that are in financial crisis due to loss of a loved one who did not possess proper life insurance protection.
What market does Black Bear Life target and how big is it?
We protect families during their most vulnerable time – which is the working years. We offer affordable solutions and provide the maximum benefit to working families by exclusively focusing on insurance protection through the age of 70.
The total addressable market for term life insurance is over $140B in annual renewable premiums. We offer dynamic products not only for new policyholders but also to compete with the 280 million existing policies that currently exist in this market place. For the first time, consumers will be able to shop for their life insurance as they do for car insurance, making sure they are getting the appropriate coverage at the best rate within 10 minutes.
What is the business model?
Even though most people start their search for life insurance online, over 90% of all policies are sold through brokerage channels and independent agents. Black Bear Life will be the only life insurance startup allowed to distribute products through brokerage channels, which significantly reduces our cost of acquisition and delivers a door-opening product for licensed professionals.
What inspired the start of Black Bear Life?
After spending a combined 40+ years in many facets of the life insurance industry, we believed that the time is now to update the industry that has been decades behind in technology, innovation, and has historically had the worst customer experience. This led to several conversations and research into different practices, ideas, and innovations that could be implemented to create the next generation life insurance company.
What are some startups that you respect in the insurtech space?
Lemonade – they have proven that creating a new insurance company based on new technologies and forward-thinking is the best way to move the insurance industry into the future and better serve our communities.
Atidot – they have a creative approach to using the data, actuarial sciences and social media to improve pricing, risk analysis, and consumer behavior for clients and prospects.
What are the milestones that you plan to achieve within six months?
We plan on completing our app development, cloud infrastructure, and product filings with the state regulators so we can go live Q4 2019.
What is the one piece of startup advice that you never got?
We must do the uncomfortable things well to achieve the improbable, and the most crucial part of any vision, is execution.
If you could be put in touch with anyone in the New York Community who would it be and why?
Daniel Schreiber – CEO & Founder of Lemonade Insurance. We feel like we share a similar vision that he implemented with Lemonade: transforming the industry from the ground up by creating next-generation insurance companies that focus on the customer and positive social change for our communities.
Why did you launch in New York?
New York State has a notoriously thorough department of insurance which has set the diamond standard for regulation, so rolling out in NY can make approval from other states much easier.
New York City is the center of the financial world, so it makes it much easier to find and connect to top-level talent and investors.
What’s your favorite restaurant in the city?
Keene’s: A little over a year ago, this was where the idea for Black Bear Life came to fruition, and it doesn’t hurt that they have the best steak in NYC.
