Ladder Financial Inc. has been doing a gut rehab of the life insurance sales and underwriting process.
The Menlo Park, California, insurance distributor is selling a term life insurance policy it designed, through the web, in 45 states and the District of Columbia.
Although LadderLife company has only 37 employees, it can issue fully, but quickly, underwritten policies while the applicants are sitting in front of their computers, with coverage limits ranging from $100,000 to as high as $8 million.
The company’s Ladder Insurance Services L.L.C. unit acts as both an insurance producer and as an insurance third-party administrator. LadderLife has arranged for Fidelity Security Life Insurance Company to write the insurance, and for Hannover Life Reassurance Company of America to serve as the reinsurer.
Canaan Partners and other venture capital firms invested $14 million in LadderLife.
LadderLife turned on its website, in California, in January 2017. It generated about $100 million in term life sales in its first 100 days of operation. A few weeks ago, RRE Ventures and Thomvest Ventures helped provide $30 million in additional capital.
Two of LadderLife’s four founders, Jamie Hale and Jeff Merkel, traveled to ThinkAdvisor Life/Health’s offices earlier this month to talk about the company.
Hale, who has a bachelor’s degree from Bowdoin College and his master’s degree in business from Harvard, spent nine years working at the Robert M. Bass family office before leaving to launch his own investment firm.
Merkel, another LadderLife founder, has a bachelor’s degree in math from Taylor University and a master’s degree in business from Stanford. Merkel started out as a management consultant. Before he helped start LadderLife, he was the director of global Android partnerships at an older startup: Google.
Here are five things Hale and Merkel talked about during their TALH interview.
1. Speed matters.
Some life insurers say their new, accelerated underwriting processes can cut the time needed to buy a life insurance policy to a few weeks, or, maybe, a few days.
Hale and Merkel rolled their eyes at the thought of making a customer wait several days to get a policy. “The conversion headwind is just massive,” Hale said.
Some older baby boomers may still go to the bank tellers to deposit checks.
Typical LadderLife site users “don’t even go to the bank branch to deposit their checks,” Hale said.
2. The silos are real.
Organizers of many other insurance technology efforts have said that one obstacle has been insurers’ silos, or divisions between different business departments.