Branch, an insurtech startup focused on bundling digital home and auto insurance, is eying national expansion through 2021 after nailing down $24 million in new financing. The managing general agent (MGA) also plans to add a reciprocal exchange to its business plan.
While the Ohio-based company began life as an MGA, it will shortly convert to a reciprocal insurance exchange – Branch Insurance Exchange – initially in the states where it currently operates – Arizona, Illinois, Missouri, Ohio and Texas.
Steve Lekas, a former Allstate and Esurance executive, is a co-founder and CEO. He described a reciprocal exchange as an insurance association made up of its members. Branch will serve as a manager “that facilitates the community’s funds and enables the membership to insure one another.”
Lekas described the approach as “an esoteric model,” though he noted there are some well known reciprocal exchanges including PURE, Farmers and Erie Insurance.
Greycroft and HSCM Bermuda co-led the Series A funding round. Returning investors American Family Ventures and Revolution’s Rise of the Rest Seed Fund also participated, along with new investors SignalFire, SCOR Global P&C, Elefund, Foundation Capital, and individuals from Stone Point Capital.
Lekas and tech entrepreneur Joe Emison launched Branch in 2018. Branch insurance is underwritten by General Security National Insurance Co.
Bundling and Binding
The company bills itself as having “revolutionized the experience of bundling home and auto insurance” with a streamlined process that takes seconds to complete, by asking clients for just their name and address. Branch explains its technology as integrating data to the point where a traditional application and quote estimate are no longer needed. Its system is designed to give clients an instant purchasable price rather than just an estimate. The company said its technology can be integrated into home financing and car-buying websites, adding that customers complete their purchase without having to dig up additional information to apply or wait for a quote.
Ian Sigalow, co-founder and a partner at Greycroft, said in prepared remarks that Branch’s instant-bind capability “has never been possible before.”
Beyond its basic cover, Branch has incentive programs such as My Community Discount, where customers invite friends to check out Branch, and then get a $25 Amazon eGift Card once they request a price. Both customers and their friends earn discounts on their insurance as long as they’re customers.
There’s also Community Pledge, which involves an app. Customers ask other Branch customers to pledge that they believe they would not commit insurance fraud, and then both can earn discounts between 1 percent and 5 percent as long as they’re both customers.
Branch has also launched the non-profit SafetyNext, which is designed to help qualifying customers who have suffered home or auto loss and don’t have enough of insurance to fully cover the damage.
Source: Branch
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