Lemonade’s recently launched life insurance offering is powered by Bestow’s Protect API, the insurtech companies recently announced.
Bestow’s Protect API product lets customers be underwritten in “real-time,” and find out if they’re approved, according to a press release. Bestow, which operates a digital life insurance platform, uses third-party data to figure out eligibility and pricing and removes the need for a medical exam, the company says.
Lemonade is a New York-based insurance carrier that uses artificial intelligence and behavioral economics to offer renters, homeowners and pet health insurance and now offers life insurance as well. The company announced ambitions of entering the life insurance market in November, and reiterated those plans in January when the company filed paperwork to raise $808 million from a secondary equity offering.
Lemonade has a large customer base and the move will allow Bestow to grow and expand its reach with customers, Dallas-based Bestow’s co-founder and president Jonathan Abelmann said in an interview with FinLedger.
“We have the ability to accelerate [Lemonade’s] entrance into offering life insurance products and protection for their customers,” he said. “It enables us to continue to expand our mission of getting this access democratized across the industry. That means serving Lemonade’s customer base just as we serve our own. There’s really this compounding effect, where I think you’ll see exponential growth as we expand across our traditional borderlines.”
If you’re a technology-first company, Abelmann explained that many traditional incumbents offer a financial product but not necessarily the infrastructure to underwrite and deliver that product in an easy-to-use way for digital customers. So, this Protect API offers the ability to continue that digital experience across a different product type, he said.
“Rather than having to go and rebuild a management team from the life insurance industry, and then the licensure, the products, and the underwriting ‘know how’ — all that can be leveraged to a company like Lemonade through our APIs and through the operations team that we built to power any other platform’s entrance into the life insurance space,” he said.
Despite the trial and tribulations brought on by the COVID-19 pandemic, Bestow experienced some skyrocketing growth in 2020. The company grew its customer base by 400%, raised more than $100 million in funding and 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. The deal is expected to close in the first quarter, Abelmann said, although he did not know which month yet.
In the past year Bestow hired over 70 new team members and its total employee count now sits at about 140. Abelmann said he expects the company to be north of 200 employees by the end of 2021.
Looking ahead, Abelmann said that there’s a lot of exciting growth in its main lines of business, especially in its advisor channel line of business.
The company is looking to partner with more companies, agents and other “top tier” incumbent carriers and Abelmann said he thinks we’ll see a “crystallization of this platform that we’ve built, which is life insurance infrastructure for the internet, and that will grow.”