Next Insurance has raised $83 million in new financing, money it said will fuel its continued U.S. expansion as a full-service digital insurance carrier focused on the small business market.
Nationwide Insurance and Munich Re participated in the Series B round, along with American Express Ventures, Ribbit Capital, TLV Ventures and Zeev Ventures. Redpoint Ventures led the financing; Managing Director Elliot Geidt will join the Next Insurance board.
Combined with the new financing, Next Insurance has raised $131 million since its launch two years ago. A previous round of funding also included American Express Ventures, Munich Re and Nationwide, as well as Markel.
Next Insurance said the new financing will help it, in part, add additional lines of insurance. The California-based startup debuted in 2016 as a digital insurance agency for small to midsize businesses. But in May of this year, it had ditched its agency status to become a licensed insurance carrier, beginning with Delaware. Since then, it has become a licensed carrier in Oklahoma, Arizona, North Carolina, Texas, New Mexico, Maryland and Utah, and the company said it is rapidly expanding to all 50 states.
The agency-turned-carrier touts its approach as a way to boost innovation in the small business insurance market through on-demand coverage and use of artificial intelligence and machine learning for underwriting. The company also promises plain policy language, customized coverage, and claims will be paid within 48 hours.
“Our goal is to become the one-stop shop for all small business insurance needs, no matter where they are,” CEO and co-founder Guy Goldstein said in prepared remarks.
In 2017, Next launched a chatbot that enables personal trainers to quote and buy liability insurance via Facebook Messenger.
“Our relations with Markel and Munich Re are very strong, and as a carrier, we will continue to work closely with them. They are more critical than ever before to our future success,” CEO Goldstein said in may in discussing the switch to carrier status.
Next Insurance is among a number of new property/casualty startups such as Lemonade, Root and Metromile, all of which are pledging to disrupt the industry with greater ease, efficiency, broader use of technology and better costs. Those companies all had combined ratios well above 100 last year, however. With that in mind, Goldstein told Carrier Management back in May that Next Insurance had taken steps to provide for stable, positive growth.
“We are building a sustainable company that’s focused on long-term success,” Goldstein told Carrier Management. “We know that in order to do that, we have to maintain our target loss ratio. That’s why we are investing in our rating and underwriting and using data science in innovative ways that have never been done before in the small business insurance market.”
- Small Businesses Can Manage, Cancel Own Policies with Next Insurance Portal
- Startup Next Insurance Raises $29 Million from Insurers, Other Investors
Carrier Management Member-Only Content:
- Bigger and Redder: A Look at Q1 ’18 for Lemonade, Other InsurTech Carriers
- Dispatches From InsurTech Survival Island: Five Takeaways From Statutory Financials (Part 1)
- Dispatches from InsurTech Survival Island: Five Takeaways From Statutory Financials (Part 2)
- Dispatches From InsurTech Survival Island: Five Takeaways From Statutory Financials (Part 3)
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