InsurTech

Insurtech Bestow to acquire Centurion in push to become a national carrier

Company, which says policy sales are up 450% year over year, is buying Centurion from Wells Fargo

Digital life insurance platform Bestow has entered into a definitive agreement to acquire Iowa-based Centurion Life Insurance Company — a deal that would push the insurtech to become a nationally licensed carrier. 

Currently, Dallas-based Bestow is a licensed carrier in Texas, while Centurion is licensed in 47 states and the District of Columbia. The deal would support Bestow’s mission to “make life insurance accessible to everyone,” said Melbourne O’Banion, co-founder and CEO of Bestow.

The company would not disclose the financial terms of the deal, but O’Banion said in an email to FinLedger that Bestow hopes to have regulatory approval for the acquisition sometime in the first quarter of 2021. Bestow is purchasing Centurion – which was founded in 1956 – from Wells Fargo. If the acquisition is completed, it will accelerate Bestow’s process “of establishing a national presence as a carrier,” he said. 

“By comparison, if we didn’t go the acquisition route and had to approach this on a state-by-state basis, it would likely take Bestow 3 or 4 years to become a national carrier because of the seasoning requirements,” he wrote via email. “With a national presence, Bestow can reach and serve as many customers as possible with our unique, entirely digital approach to term life insurance.”

Navigating the COVID-19 pandemic has been a whirlwind for everyone, but O’Banion said that the company has seen more demand for life insurance products because of the pandemic since people are looking for ways to financially protect their loved ones. 

Going forward, O’Banion said the next step is for Bestow to become a challenger carrier, which will provide it “with the independence and autonomy to continue driving innovation on behalf of the customer  — which can be a challenge for startups operating solely as an agency,” he said in the email. 

Some context

Recently, Bestow launched its Protect API and policy sales are up more than 450 percent year over year, according to the company. Founded in 2016, Bestow launched its platform three years ago to help people secure “affordable” term life insurance coverage. The application process “can take as little as 5 minutes,” and does not require a medical exam, the company claims. 

Bestow is growing via a variety of distribution channels, including working with fintechs such as Acorns, Chime, Stash and other banks and finance apps, O’Banion said. Recently, Bestow partnered with Tomorrow, which helps users apply and buy life insurance through its app. 

“We see a unique opportunity to partner with neobanks, robo advisors, and other fintechs to directly bring life insurance to our target customer and within a service they already know and trust,” O’Banion said in an email to FinLedger. “We look forward to announcing more partners soon.”

Earlier this year, Bestow raised $50 million in a Series B fundraising led by Valar Ventures, which is backed by Peter Thiel, Crunchbase News reported. The company completed the financing in February, bringing its total raised financing since it started up to $67.5 million. 

Bestow, which was founded by O’Banion and Jonathan Abelmann, also has an Austin office.

No doubt the insurtech space is a hot one. Just last week, we reported that Metromile was going public via a SPAC in a $1.3 billion deal, and that Hippo had received a $350 million capital investment.

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