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Allianz Steps Up Venture Investments in Insurance Startups

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Allianz Life Insurance set up its venture arm two years ago, as more new startups using breakthrough technology promised to one day transform its industry. Now, after a slow initial period, the insurance giant’s VC investments are picking up steam.

Allianz has invested in six startups so far, half of them in 2018 alone, and all of them promising to upend the business it’s been in for more than a century.

(Related: 5 Lessons From a Hot Life Startup)

Allianz was founded in the 1890s, long before the age of mobile phones and artificial intelligence began to dictate both how insurance and is sold and how it’s bought. The firm set aside $100 million to invest in private companies in the middle of 2016, seeing an opportunity to partner with and perhaps acquire startups.

“When we make an investment we’re looking for early traction, a strong team and good innovation in our industry,” said Emily Reitan, vice president of strategy and business development and head of Allianz’s ventures group. “The pace of investing has really been picking up.” The company has not made an acquisition yet, Reitan said, but the option is on the table.

Allianz isn’t the only one interested in the companies aiming to shake up insurance. According to a recent report from data company CB Insights, nearly $700 million in funding flowed into insurance startups in just the final three months of 2017, up more than 150% compared to the same period the prior year.

Allianz’s latest investment is in a $10 million round, along with Northwestern Mutual Life Insurance Company’s venture arm, in the Palo Alto, California-based company Ladder. The startup uses technology and data to cut the time it takes to buy life insurance to minutes rather than weeks. The firm launched in January of last year and has since expanded to 49 states and D.C.

Ladder co-founder Jamie Hale said the new round of investment is both a vote of confidence in his firm and his belief that “consumers are ready for a modern solution to life insurance.” As of now the company has no plans to move into other insurance categories, which have also seen similar innovations from other startups.

“We are laser-focused on reinventing life insurance from the ground up,” Hale said. If that works, one of the largest life insurance companies will be in on it, too.

— Read Ladder Launches Insurtech Life Insurance Product in California on ThinkAdvisor.

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