A California company that organizes life insurance programs aimed at people in niche underwriting markets has raised $55 million in funding from a group of investors led by Greenspring Associates.
The company Hi.Q Inc., operates as Health IQ Insurance Services Inc.
Health IQ uses quizzes and other methods to identify applicants who may be better risks for life insurance and disability insurance than ordinary life insurers might think.
The company looks for people who are engaging in activities associated with good health, such as running and swimming, and for people with chronic diabetes, such as diabetes, who are doing a good job of managing their conditions.
The Screening Process
To screen people with diabetes, for example, Health IQ requires prospects to start by passing a general Health IQ quiz and a Diabetic IQ quiz.
The company also requires a prospect with diabetes to track physical activity with an app; to provide a race completion time from a race website; to attend a regular fitness class; or to verify having a healthy lifestyle some other way.
Before issuing a policy, the company also puts an applicant with diabetes through a standard underwriting process, and requires the applicant to go through a screening exam.
What Health IQ Is
Health IQ works with carriers such as Ameritas, Protective Life and SBLI to help the applicants who meet its underwriting standards get discounted rates.
From the perspective of the life insurers, Health IQ is a managing general agent that shares in some of the underwriting risk, through use of a captive reinsurer. The Health IQ captive reinsurer has agreed to make payments to the direct writers if mortality losses turn out to be higher than expected.
The company says it has helped its clients get $21 billion coverage, and that the amount of coverage it has arranged has tripled since 2017.
Health IQ was founded in 2013 and has its headquarters in Mountain View, California.
The company announced receiving earlier rounds of funding in 2014, 2016 and 2017, according to Crunchbase Inc.
In 2017, for example, the company said it had raised $34.6 million.
Health IQ says it has raised a total of $139.5 million.
TriplePoint Venture Growth BDC Corp. of Menlo Park, California, said in a recent quarterly report filed with the U.S. Securities and Exchange Commission that it has provided $13 million in preferred stock financing for Health IQ, at an interest rate of 11%, with a maturity date in June 2023.
Venture Lending & Leasing VII Inc. of Portola Valley, California, said in an SEC filing that it has provided $2.2 million in financing, with a senior secured position, with an interest rate of 11%. The maturity date for one round of financing came in June 2018, and the maturity date for a second round of financing is in May 2020.
The list of investors in the latest round of financing includes a fund affiliated with Aquiline Capital Partners, Hanwha Asset Management and Andreessen Horowitz.
Aquiline has also been funding Simplicity Group Holdings, a company that has been acquiring many senior products distributors.
What Max Chee Says
The Health IQ funding round announcement includes a statement from Max Chee, an Aquiline partner who runs Aquiline’s Aquiline Technology Growth fund.
“What drew us to Health IQ was its data advantage,” Chee said in the statement.
Chee said Health IQ is using science and data to more accurately price insurance, through a “precision insurance” strategy.
“We believe the next generation of insurance will be this form of accurate pricing,” Chee said.
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