Two insurtech managing general agencies plan to merge in an effort to tap into embedded insurance demand for travel and other e-commerce businesses.
Seeto, which focuses on helping e-businesses build embedded coverage, said it will merge with Pattern, a startup coming out of stealth mode that’s designed to offer parametric and traditional insurance cover as embedded insurance.
The new joint company will be called Pattern, with a business model centered around helping businesses generate new revenue streams and boost customer satisfaction through tailored insurance products.
Since merger plans were announced, the companies have jointly raised $25 million in funding, including a recent seed round of $10 million for Pattern. The joint company is backed by Kamet Ventures, the venture builder where Setoo was incubated, Comcast Ventures, MS&AD Ventures, Foundation Capital, FinTLV, TechAviv Founder Partners, Kli Capital, Abstract Ventures, and others.
They hope to close on the merger near the end of August. At that point, AXA, Spinnaker Insurance Co., Wakam and others will provide Pattern’s insurance backing.
Setoo operates as an insurance managing general agency in the European Union and United Kingdom. Pattern is in the process of finalizing becoming an MGA in the United States. The joint company will operate both in the EU and U.S.
Goal of Merging
Pattern will offer a one-stop-shop for embedded insurance products for businesses using real-time underwriting data.
“We believe that offering frictionless access to personalized insurance, tightly coupled with the core product, experience or service sold, is key to increasing consumer confidence and transaction volumes,” Meitav Harpaz, CEO and founder of Pattern Insurance Services, said.
Coverages will include both parametric and traditional insurance products. Pattern allows businesses to protect shoppers from unexpected changes to plans, inclement weather, utility outage or surcharge, shipping delays and other risks.
Noam Shapira, who co-founded and is also the co-CEO of Setoo together with Eyal Gluska, said the merger makes particular sense after the pandemic.
“Following the COVID pandemic, global markets were severely altered, and consumer concerns of unprotected risks grew even bigger,”said Shapira, claiming that its customers are seeing accelerated recovery ahead of the rest of the market.
Assaf Wand, Hippo’s CEO, is a Pattern board member.
This is an edited version of a report originally published by CarrierManagement.com.
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