The challenges of being an entrepreneur and building your own business are difficult enough without adding insurance as an ongoing headache. The hassle includes a long period to get signed up, to the seemingly endless waiting period to get a claim covered, to the inevitable challenge that shows you how wrong a policy was for your business type only long after you’ve been paying for it. The small business market is vast and extremely varied, yet most agents offer only catch-all policies that lack individualized care and don’t cover the issues that matter most. The agent-centered process makes it unresponsive, slow, ineffective and fundamentally lacking in the expertise needed to cater to the unique specificities of each industry.
Next Insurance , a new insurtech startup based in Palo Alto, is bringing a digital approach to redefine the way small businesses are served by their insurance. The idea for Next Insurance was born when three co-founders, Guy Goldstein, Alon Huri and Nissim Tapiro, were faced with the problem of finding a simple and comprehensive insurance for their first startup, Check (eventually sold to intuit for $360 million). Their first-hand experience of spending much time and effort on this process instigated the founding of Next Insurance, which aims to solve these challenges for other businesses.
Guy Goldstein, CEO Next Insurance
“Insurance is supposed to give an entrepreneur peace of mind and confidence so they can focus on building great businesses, but the options available just aren’t geared to making it easy for them,” said Goldstein, Next’s CEO. “We wanted to create policies that are tailor made for each entrepreneur and their specific business. We felt like insurance needed to serve the entrepreneur and not vice versa.”
Next signs up small business owners with an online process that uses artificial intelligence to tailor a policy to any specific business all through one streamlined digital platform. They conduct in-depth research into the needs of each small business area their offering extends to, to ensure that the products are completely relevant for them. They claim that the current insurance climate sees friction between the customer and the insurer, in which the specific needs of the customer are not a top priority. Next aims to bridge this gap, removing the middle-man (the agent) and creating a direct link between the insurance providers and their customers.
This approach to policy-building is highly personalized, whereas traditional insurance lacks any personalization at all. What does Next mean when they say "lacks personalization?" Goldstein laughs at the absurdity that, in their research, one policy for photographers did not cover their equipment when off-premises, where photographers do the majority of their work. “It’s a lack of nuanced and targeted policies like these that are failing business owners when they need it most,” said Goldstein.
Currently, Next is focused on personal trainers, photographers, and contractors, but after raising a $35 million A round, they are ready to expand. “Data is the key, and by creating a direct link between insurance providers and small business owners we are getting instant feedback, enabling us to build better policies,” said Goldstein. “It’s a fundamental paradigm shift, because we’re showing that insurance can be a win/win for the provider and policy holder.”
To date, the company has already shown impressive growth, selling over 5,000 policies already since just the start of the year. By using the digital approach, Goldstein claims that small businesses can be covered with the correct policy within five minutes, as opposed to the weeks it can often take by way of the traditional insurance process.
Thus far, the small business insurance market has only been touched by a few tech companies, including BizInsure and CoverWallet who also offer users the ability to purchase business insurance online. However, according to Goldstein, these companies are only offering comparison shopping for existing insurance policies. In this sense, Next believes that they are the only insurtech company who provides the service from start to finish – from product building, to underwriting, to processing claims.
After raising a hefty $13 million Seed round last year, Next recently announced an even larger $35 million A Round, led by Munich Re/HSB Ventures along with Markel, Nationwide, American Express, and other existing investors. With new policies in the works for more business types, Next Insurance hopes to continue their industry disruption and provide small businesses with the confidence they need to succeed in their business goals.
There are a number of successful insurtech companies who have entered the scene in the last few years, including CoverHound and Embroker , that are seeking to bring online services and a new approach to insuring SMBs. . Although the insurance industry has been slow to adopt change and technological innovation, many of today’s biggest investors in insurtech companies are the household-name insurance companies themselves. Like Next, these insurtech’s are looking to redefine the insurance business and perhaps, eventually, become the biggest players in a modern era of insurance.
Cloud computing is an area we find especially exciting. It has brought enormous change to the world of applications and it would be no exaggeration to say that most of the innovation in IT over the past decade has been enabled, catalyzed, or caused by cloud computing. Currently, we are in the midst of a microservices revolution, one that has, until now, been championed by containers. Through our investment in Aqua Security over a year ago, we have witnessed first hand the rapid growth this market is experiencing, and believe it will continue to proliferate enterprises across the globe. We are now on the cusp of another revolution in cloud infrastructure: the move to serverless computing.