XL Catlin’s venture fund, XL Innovate, committed $4 million in first-round financing to Stonestep, a property/casualty insurtech startup looking to streamline how microinsurance is sold in emerging markets.
The Series A funding is designed to help Stonestep grow in the Asian market, starting in Myanmar. As well, the investment allows Stonestep to access XL Catlin’s experienced and insurance capacity.
“For most people around the world, life is extremely risky: if people lose their home, they’re not checking into a hotel. If they have an accident, there’s no ambulance. Stonestep’s unique insurance platform can cover such risks for emerging consumers, and XL Innovate’s investment will help us implement this solution, beginning in Asia, Stonestep founder and CEO Brandon Matthews said in prepared remarks. “Microinsurance as a service is a sustainable business model that can catalyze economic growth for all levels of society.”
Matthews has previous insurance experience in emerging markets, having worked with AIG and Zurich to build large operations in Latin America, according to the funding announcement.
As part of the investment, XL Innovate director Sarah Street will join Stonestep’s board of directors.
XL Catlin is also a founding member of Blue Marble Microinsurance, a consortium of insurers and reinsurers designed to create a market for microinsurance (insurance coverage with low premiums and low caps/coverage) to the underserved and emerging middle class in developing countries. The consortium also includes AIG, Aspen, Hamilton Insurance Group, TransRe, Old Mutual, Zurich, Marsh & McLennan and Guy Carpenter, according to Blue Marble’s web site.
Stonestep said its “microinsurance as a service” technology platform is built to allow basic insurance products to be sold through different corporations such as mobile network operators, retailers and financial service providers, and use their distribution systems to sell insurance affordably.
The idea is that piggybacking on existing companies’ distribution systems could reduce infrastructure costs and allow for the sale of insurance services to geographically remote areas, connecting with customers that would not necessarily be reached through traditional means.
Stonestep said its system includes apps that help distribute policies and administer claims, and that its platform provides services to help customers resolve their needs quickly and directly, “reducing the frictional costs associated with traditional insurance.” Smartphones, microfinance and digital crypto-contacts would be some of the technologies to help make this happen.
“We are excited to collaborate with [Stonestep] as they accelerate the growth of this business in Asia,” Street said in a prepared statement.
Source: XL Innovate
A version of this article first appeared in Insurance Journal’s sister publication, Carrier Management.
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