See the 8-page pitch deck Counterpart, a startup disrupting commercial insurance with data science, used to raise a $30 million Series B
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- Insurtech is a fast-growing segment that raked in $15.4 billion of funding globally last year.
- Counterpart is a commercial insurtech that uses data science to more accurately measure risk.
- The startup raised a $30 million Series B on Tuesday.
There’s been no shortage of funds flowing into insurance-technology companies over the past few years.
Private-market funding to insurtechs soared to $15.4 billion in 2021, a 90% increase compared to 2020. Some of the most well-known consumer insurtech names — from Oscar (which focuses on health insurance) to Metromile (which focuses on auto) — launched on the public markets last year, only to fall over time or be acquired as investors questioned the sustainability of their business models.
In the commercial arena, however, the head of one insurtech company thinks there is still room to grow — especially for those catering to small businesses operating in an entirely new, pandemic-defined environment.
“The bigger opportunity is in commercial lines,” Tanner Hackett, the CEO of management liability insurer Counterpart, told Insider.
“Everywhere I poke, I’m like, ‘Oh my goodness, we’re still in 1.0, and all the other businesses I’ve built were on version three.’ Insurance is still in 1.0, still managing from spreadsheets and PDFs,” added Hackett, who also previously co-founded Button, which focuses on mobile marketing.
Founded in 2019, Counterpart partners with brokers to offer directors and officers, employment practices, and fiduciary coverage for private companies with less than 250 employees and $250 million in annual revenues.
Directors and officers insurance covers the executives of a company should they be sued as a result of their management decisions. Employment practices insurance, meanwhile, covers companies should they be sued by current, former, or potential staff over employment-related issues. Fiduciary insurance covers companies in their role in managing employee benefit plans.
In 2020, the market for commercial insurance in the US totaled some $314 billion, according to the Insurance Information Institute. Counterpart’s competitors include insurance giants like Chubb, Travelers, and Liberty Mutual as well as other tech-oriented players like Next Insurance. According to S&P Global, meanwhile, direct premiums written worldwide for directors and officers insurance alone totaled $10.8 billion in 2020.
On Tuesday, Counterpart announced it raised a $30 million Series B round led by Vy Capital, with participation from existing investors including Valor Equity Partners and Felicis Ventures.
According to Hackett, Counterpart’s underwriters are more accurately “risk engineers,” a role that underscores the startup’s data-oriented, tech-driven approach to pricing insurance that has become the norm among insurtech firms.
“That means abstracting thousands of different data points that we’re collecting about this business, taking these breadcrumbs and structuring them such that we can then build complex data-science models on top of these very broad data sets,” Hackett said.
The core engine of the company is an algorithm that ingests data to interpret company risks and find the insurance coverage that best fits the customer’s needs.
Hackett declined to disclose a valuation for Counterpart, but said that the new capital will help grow Counterpart’s team from 28 employees to roughly 75 by year-end. This February, Hackett added, the startup brought on Ali Penny, a former head of recruiting programs at Yext, as head of people.