Bermuda headquartered ILS fund and investment manager ILS Capital Management has provided a seed round of funding to commercial auto insurance tech startup Pouch, while also agreeing to let the insurtech use its insurance carriers and presumably its reinsurance capital as well.
Pouch has created a customer friendly, simple approach to quoting commercial auto insurance, at the same time rewarding small businesses for safe driving using technology as well.
ILS Capital Management (ILS Capital) already has a more diversified approach to ILS fund management than much of the market, having its own US insurance carriers and writing business across multiple lines of insurance and reinsurance, including specialty classes.
Having seed funded Pouch, ILS Capital is also providing critical infrastructure that will help the insurtech company accelerate its growth and also go to market seeming much larger and better organised.
ILS Capital will give Pouch access to its portfolio of insurance companies to underwrite policies, as well as access to distribution channels, plus operational and development resources and expertise.
This arrangement has saved Pouch significant time and money, prevented delays and trial and error, allowing the insurtech to launch in less than half the time it might have taken to put together this kind of infrastructure on its own.
We assume that by using ILS Capital’s insurers, Pouch is also tapping on the ILS investment manager’s third-party investor backed reinsurance capacity as well.
“This capital and our portfolio gives Pouch the freedom to focus on growing its business and a fast track to market,” Tom Libassi, Co-Founder and Managing Partner at ILS Capital explained. “At the same time, Pouch is led by a team rich with proven experience that expands the knowledge and expertise in our portfolio. It also opens up access to the direct-to-business market and telematics, which are highly complementary to what we do. This investment reflects our confidence in Pouch’s leadership and our shared vision. We have every confidence that Pouch will take the ball and run.”
Pouch gets all the benefits of a midsize insurer from day one through its arrangement with ILS Capital.
It can take a new insurance company 18 months or more to put together everything it needs to launch. Pouch has achieved this in only eight months, thanks to these resources at its disposal from ILS Capital.
“Insurance presents more hurdles to entrepreneurs than just about any other industry. You not only have to raise capital, you also have to find an insurer to write the policies, not to mention all the regulatory approvals,” Steve McKay, Founder and CEO of Pouch said. “ILS Capital has given us everything we need to move as fast as possible to take advantage of the opportunities in commercial auto insurance. They helped us bring to market our fresh approach and rewards for safe driving so that we can immediately help businesses protect some of their most valuable assets.”
This is another great example of an ILS investment fund manager who has created a robust infrastructure for originating, underwriting and servicing insurance risk, backed by efficient reinsurance capital, finding a way to both invest in a high-growth insurtech opportunity, while bringing efficiencies to the deal at the same time.