US insurer State Auto Labs and RV1 Ventures have jointly launched a US$25mn Corporate Venture Fund to find startups focusing on advanced analytics, new distribution models and operational efficiencies (such as blockchain). Through this collaboration with Rev1 Ventures, State Auto Labs connects InsurTechs and Fintech startups with capital, IT resources and insurance industry experts.
This partnership between State Auto Labs and RV1 Ventures is yet another example of a legacy insurer turning to a dedicated expertise in the technology industry, in this case; venture investing.
The four investment verticals of this partnership are:
- Technologies that connect, collect and communicate with people, vehicles, offices and homes (i.e. IoT and wearables).
- Data-driven innovations that improve insurers ability to cross sell usage based policies through location data and decision-making (i.e., machine learning and artificial intelligence).
- Distribution models that enhance both traditional and emerging distribution channels and elevate customer service tools.
- Products and operational solutions that address the changing needs of consumers while also enabling entry into new markets (i.e.the sharing economy and new products in the cyber and clean energy realm).
“The insurance industry is in the midst of an enormous transformation and is poised for a bigger disruption over the next five years than it’s undergone over the past 50 years,” said a statement from Kim Garland, Senior Vice President of commercial lines and MD of State Auto Labs.
Ultimately, this partnership between State Auto Labs and RV1 Ventures is another example of a legacy insurer turning to a dedicated expertise within the technology industry, in this case; venture capital. Although partnering with VC firms helps legacy insurers to identify the best InsurTechs, relying too heavily on external parties for innovation can foster complacency within organisations. To know more about how and what they are doing you can refer to our Insights on Venturing and InsurTech.
