Insurtech Next Insurance Raises Funds to Expand Small Business Coverage
Next Insurance in July 2018 raised $83 million in new financing, money it said will fuel its continued U.S. expansion as a full-service digital insurance carrier focused on the small business market.
A California-based startup, Next Insurance debuted in 2016 as a digital insurance agency for small to midsize businesses. The new financing will allow Next to add more lines of insurance. The firm changed its agency status in May 2018 and is now a licensed insurance carrier in Delaware, Oklahoma, Arizona, North Carolina, Texas, New Mexico, Maryland and Utah, with plans to expand to all 50 U.S. states.
At this time, it provides professional liability, general liability, and commercial auto insurance to small businesses in the beauty, fitness, photo & video, contractors, daycare, cleaning, and therapy sector. Employee benefits do not seem to be on their radar screen at this time.
Next Insurance has raised $131 million, including this new financing, funded by American Express Ventures, Munich Re and Nationwide, as well as Markel. It is based in Palo Alto, California, and in Israel, where most job openings are as of mid-July 2018 (13 vs. 4 in California).
Large Hurdles Ahead For Disrupting Carriers
“Our goal is to become the one-stop shop for all small business insurance needs, no matter where they are,” CEO and co-founder Guy Goldstein said in prepared remarks.
Next Insurance is among a number of new property/casualty startups such as Lemonade, Root and Metromile, all of which are pledging to disrupt the industry with greater ease, efficiency, broader use of technology and better costs. Those companies all had combined ratios well above 100 in 2017; they are still in business acquisition mode and will need at some point to either reprice or clean up their portfolio of policies. What then happens to their sales momentum and to their reputations as disrupters is an open question.