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The Rise Of Insurtechs Doesn’t Have To Be A Disruption Story

Illustration of piles of gold coins to represent money

By Colin Nabity

In the world of venture capitalism, you’d be hard pressed to find a sector with more buzz than insurtech.

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Investors have put at least $6 billion into U.S. insurance and insurtech-focused startups this year, according to Crunchbase data from late last month, already surpassing 2020’s total by 32 percent. 

In Q2 alone, there were 162 insurtech funding deals totaling more than $4.8 billion in investments. Count my company Breeze, an insurtech simplifying how we buy and sell disability insurance and critical illness insurance, as one of them.

Colin Nabity, CEO and co-founder of Breeze

With so much capital pouring into insurtechs, the industry narrative has naturally become one of disruption and competition: Insurtechs versus the legacy insurance industry.

And while insurance is indeed an industry ripe for disruption and technological advancements, stiff competition doesn’t always have to be the case.

There are opportunities for young insurtechs to instead collaborate with the old guard of insurance to grow the industry and make it an easier place for the modern consumer.

We’re doing it here at Breeze in a few ways that could possibly be implemented by other insurtechs out there.

Work with carriers to provide a D2C market

Historically, insurance carriers have had a difficult time creating a direct-to-consumer market. They’ve had to rely on independent agents and brokers to distribute their products to consumers.

Most insurtechs are online companies with websites that reach consumers directly. They have also created underwriting technology that makes the application process digital and easy. By tapping into existing data sources, eligible applicants can also skip the in-person medical exam that has traditionally been required.

There’s a great opportunity for carriers to leverage the technology and online platforms from insurtechs to sell their products in a D2C marketplace they have historically lacked.

At Breeze, we’re currently working with legacy carriers like Assurity and Principal to offer their products on our website, and it’s a strategy that other insurtechs could explore as well.

Work with smaller insurance shops

Outside of carriers selling their insurance products directly to consumers, a large chunk of insurance business is produced by an army of independent insurance agents and brokers.

Similar to the carriers though, agents and brokers also have a hard time selling insurance products outside of their own professional and personal network; they’ve relied on an inefficient, archaic process.

Just as insurtechs could be working with traditional carriers directly, they should also explore business opportunities with independent insurance agents and brokers.

The former benefits from more business while the latter also benefits from more business brought in by a new, online vertical.

Very recently, Breeze launched its agent portal, which allows independent insurance agents to use its technology to offer income-protection products to clients.


Finally, insurtechs can collaborate with the legacy insurance industry through investment.

While insurance carriers do not lack financial resources, a lot of early insurtechs do.

By looking for investments from traditional insurance carriers, insurtechs can not only fund their businesses but also benefit from the highly relevant and rich experience these carriers have.

The money helps, but the advice might be even more important.

As part of our Series A round at Breeze, we received funding from Northwestern Mutual Future Ventures, the venture capital arm of legacy carrier Northwestern Mutual.

It’s an exciting time to be an insurtech with the insurance industry changing so rapidly. But to maximize on the possibilities that come with change, insurtechs might sometimes be best suited to work with the legacy insurance business, not against it.

Colin Nabity is the CEO and co-founder of Breeze, an insurtech with a specific focus on income protection through products like disability insurance and critical illness insurance.

Illustration: Li-Anne Dias

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