Buying commercial insurance is still too hard.
Business owners applying for insurance find themselves spending time filling out paper forms, going back and forth with their brokers over email, and waiting days or weeks to get quotes.
Small businesses purchase more than $100B worth of insurance each year in the United States. To understand why such a massive industry moves so slowly, it’s helpful to look more closely at how commercial insurance gets sold.
In 2020, only 4% of that $100B of small commercial insurance was sold directly, which means that 96% of it was purchased through a broker. A broker’s job is to get businesses appropriate coverage at the lowest available price. In practice, brokers collect information about a business and then send that information to underwriters at multiple insurance carriers to find the best options. Investment in insurance technology has grown rapidly over the last several years, including an estimated 47% global increase in 2021. Much of that investment has been funneled into building better tools for each link in the insurance distribution value chain: customers, brokers, and carriers.
Unfortunately, those tools live in silos. As a result, they don’t talk to each other.
So despite billions of dollars of investment in newer tools…the process ends up back on email, without much improvement for the businesses buying insurance or the brokers operating on their behalf.
Brokers sell multiple insurance products — General Liability, Workers’ Compensation, Cyber, etc. — and connect to multiple insurance carriers for each product. In order to quote each of these products online, they need to build an integration between their solution and each carrier’s system.
So why can’t broker and carrier systems talk with each other? Doing a single one of these integrations requires months of lead time, lots of engineering effort, and insurance expertise. But in order to serve the full range of their customers, this number quickly jumps to dozens or even hundreds. And given that each carrier has its own technology with its own quirks, it’s easy to see how building and maintaining all of these integrations becomes a full time job for a team of engineers.
More often than not, it doesn’t happen at all. Back to email I guess 🤷♂.️
At Herald, we’re building tools so that developers can connect to the insurance ecosystem in minutes, not months. Our customers quote and bind insurance from multiple carriers through a single API.
Brokers using our infrastructure can dramatically expand the number of lines of business and carriers they access digitally (while freeing up their engineers to work on higher priority items). And carriers who connect with Herald have access to a vast network of digital distribution partners at the flip of a switch. And most importantly, brokers and carriers are able to deliver delightful insurance buying experiences to the businesses they serve. Everybody wins!
We’ve partnered with top-tier venture capital firms along with experts in insurance and technology. Our $8m seed round was led by Lightspeed Venture Partners, with participation from Underscore and Afore Capital. Also joining are a group of experts including Garrett Koehn (President, CRC), Rotem Iram (Co-Founder and CEO, At-Bay), Roman Itskovich (Co-Founder and Chief Risk Officer, At-Bay), Stuart Winchester (Founder & CEO, Marble), Julianna Lamb (Co-Founder & CTO, Stytch), Bennett Carroccio (Co-founder & CEO, Canal), and Charley Ma (General Manager, Alloy) among others.
Prior to launching Herald, my co-founder Duncan and I built and distributed an API for selling cyber insurance at At-Bay, where we witnessed the challenges in digitizing the insurance value chain first hand. Our CTO, Jacob Barnett, built workflows for purchasing life insurance at Haven Life where he witnessed and solved the same problems in a related domain.
We’re grateful to work with an amazing team with deep experience in insurance (Kin, Haven Life) and financial services (APIture, Morgan Stanley) that has powered our growth to date. Our remote-enabled team is currently split between Boston, New York, and Austin and we are eager to hire people who are excited to help us build an industry-transforming company.
This round of funding will allow us to accelerate our carrier integrations, add lines of business, build out our product capabilities, and to reach additional brokerages and insurance technology companies who need a better way to connect with the insurance ecosystem.
As we grow, we aim to become the default infrastructure that powers insurance online, from the initial quote, through purchase, to managing the policy throughout its lifecycle. We’re excited to pursue our vision with the support of our investors, team, families, friends, and customers. We couldn’t ask for a better community.
If you are interested in learning more about Herald, visit our website or feel free to email us at hello@heraldapi.com.
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