TheNextRoundUp Venture Capital Blog Features Black Bear Life

Life Insurance Made Easy I with Black Bear Life Co-Founders

While many InsurTech companies have recently

emerged to make the industry more efficient, the life

insurance experience still leaves the stakeholders asking

themselves, “what’s changed?” Brett Smith and Tim

Stoner, veterans of the industry with a combined 40+

years of experience, decided it no longer needs to be the

case.

The co-founders decided to start Brooklyn-based Black

Bear Life in February of 2018 and plan to officially

launch by Q1 of 2020. Black Bear Life is an “actual

insurance company” not a company that sells insurance

products of legacy carriers like the current startups.

Black Bear Life believes that creating a company from

the ground up was the only way to renovate this archaic

industry because the fragmented solutions we are

seeing today are not the answer. They are a cloud-based

company that is implementing the best of breed SaaS,

big data, AI, and predictive analytic solutions to improve

the business model and most importantly, the customer

experience. Black Bear Life offers an intuitive customer

experience where they answer as few as 17 questions

and purchase a policy within 10 minutes.

I had the pleasure of speaking with Black Bear Life cofounders,

Brett Smith and Tim Stoner, on what they’re

working on:

Q: What is the inspiration for starting Black Bear Life?

Brett: After experiencing and seeing many of the

shortfalls that have plagued the industry for decades, it

was obvious this industry needed someone to integrate

technology and innovation to improve the business. In a

recent industry study, McKinsey said it best, “The

opportunity is great for an innovator to establish the next

generation life insurance company”. They go on to state

that “the winners will be those that move decisively” and

that there is a ‘winner-takes-all’ effect where the vast

majority of the profits from innovation could be gathered

by one player.

Q: In your own words, what does Black Bear Life offer?

Brett: Black Bear Life is the only insurance company that

is built with proven technologies from the ground up,

issuing 100% of our policies in as little as 10 minutes.

Typically, it takes 8 weeks to get a policy issued, and

requires blood tests and medical exams – it’s an

unpleasant and arduous process. We are a cloud-based

company that uses analytics, third-party data sources,

predictive risk modeling and the latest SaaS solutions to

provide over 85% overhead cost reduction over legacy

life insurance companies.

Q: What differentiates Black Bear Life from other

InsurTech startups?

Tim: The three main benefits we have are:

1. We are the only company that is built to immediately

issue 100% of our policies.

2. We are the only startup who is engineered to distribute

both direct to consumer and through broker channels.

Recent studies have shown that the number one thing

consumers look for when they are buying life insurance is

understanding the process through the guidance of a

licensed professional, because it's an area they don't

understand, and they want to make sure they obtain the

correct coverage. We will be concentrating on

distributing our products through broker channels where

over 90% of all policies are sold today.

3. Currently, the startups in this space are sales and

marketing companies, not life insurance carriers, so they

are unable to implement any real innovations

themselves. Black Bear Life is a Life Insurance Carrier,

designing and underwriting our own products. Because

we have everything automated with new technologies,

we’re very agile and able to maximize operational

efficiencies. Our underwriting process alone yields us a

95% cost savings and we carry similar saving through

every part of the business.

Q: What is the market opportunity?

Tim: The term life insurance market has 4.1 million new

policies issued every year, which translates to $1.2 trillion

annually of new coverage. The total addressable market

is $140 billion dollars annually in renewable premiums.

There is also a $12 trillion coverage gap consisting of

people who are lacking coverage and those who are

under-insured.

Q: How is your technology different than other

InsurTech companies out there?

Tim: A good analogy of what we’re doing is how Apple

built the iPhone. Apple doesn’t manufacture all the

individual pieces like the chip and the screen – they

purchase these parts from the best manufacturers – and

then design it and put together a superior product. We

believe the insurance industry would benefit by operating

in this fashion. Creating a next-gen company with the

best solutions, suppliers, and specialists to create

superior products that are delivered with an intuitive

customer experience.

Q: How are you able to make a decision on life insurance

so quickly, when on average it takes 8 weeks?

Brett: Our secret sauce is our predictive risk modeling.

Our customers start by answering 17 questions and we

simultaneously access third party data sources to build

an individual risk profile. This allows us to be the industry

leader by having a single pricing for each policy. Typically,

policies are priced before and after they go through the

risk modeling. This results in most cases having their

price significantly increased over the initially quoted price.

Q: What is your go-to-market strategy?

Tim: We have the ability to market to D2C but our focus

will be distributing through broker channels and

independent agent networks where 90% of all policies are

sold.

Q: What are you currently working on achieving in the

next 6 months?

Brett: We are working on relationships with national

brokerages and getting licensed in 50 states. The

infrastructure is ready to go!

Q: What is your fundraising status?

Tim: We are currently self-funded and are in the process

of raising a Seed/Series A. It’s important for us to find the

right strategic partners who understand the market

opportunity and share our vision.