Hudson Structured invests in Embroker’s $100m Series C

Hudson Structured Capital Management Ltd., investing in insurance and reinsurance as HSCM Bermuda, has participated alongside venture investors in a $100 million Series C fund raise for Embroker, a digital business insurance platform.

Alongside investing in insurance-linked securities (ILS) and reinsurance more broadly, Hudson Structured invests in insurtech (insurance technology) companies as one of the range of ways it derives insurance and reinsurance-linked returns for its investors, from across the full range of market access points.

Embroker announced today a Series C capital raise amounting to $100 million, which it said was led by FTV Capital with additional investment from HSCM Bermuda and Gaingels and follow on from Tola Capital, Canaan Partners, Bee Partners, and MassMutual Ventures.

The fresh capital raise will be used by Embroker to expand into a full-stack insurtech, with the company planning to build its own insurance carrier.

“For Embroker to truly forge a new approach to business insurance, we need to reimagine and rebuild every part of the process,” explained Matt Miller, Embroker CEO. “Even as some of the surface-level elements of insurance have become increasingly customized and digitized, the underlying legacy systems and antiquated processes endemic to this industry are needlessly complex and require a substantial overhaul. This investment round will help us make business insurance a more streamlined and radically simple experience by accelerating our progress in building  many of these systems from the ground up.”

Embroker said that its business surpassed $20 million in gross written premium for the first quarter of 2021 and achieved over 100% retention of clients.

The company also plans to further invest in its Embroker Access, part of the company’s platform that allows retail and wholesale brokers to offer Embroker’s digital insurance products to customers.

“Embroker has proven that we can focus on a specific business segment, such as tech startups or legal services, and apply a modern approach to risk management and deliver significant value to these customers. U.S.-based venture-backed startups alone are estimated to be collectively paying upwards of $1 billion or more in premiums every year, and we’re helping them not only save money but better protect their businesses,” added Miller. “Our mission is to replicate this approach to other business segments that have been historically under-serviced by the larger insurance companies and apply advanced technology to make policies more tailored, less expensive, and easier to purchase.”

Embroker applies a data-driven underwriting model to enable it to better assess risk, to create policies and premiums that protect companies against that risk.

With plans for its own carrier and further investment in its connectivity with brokers and MGA’s, Embroker is working to make the market chain more efficient, while ensuring it can own and retain more of the premium where appropriate.

Of course it will also require access to efficient reinsurance capital at the same time, so it’s not too surprising to see an ILS and reinsurance focused investment manager that also allocates to insurtech investment opportunities (Hudson Structured) participating in the round.