Dealing in the world of venture capitalists doesn’t naturally prepare InsurTech leaders for the challenge of dealing with insurance regulators, an InsurTech executive said recently, explaining one of the struggles of setting up a licensed carrier.
Executive SummaryAt industry conferences and in publications like Carrier Management, the question of whether InsurTechs should set themselves up as full-stack carriers or MGAs is a much-debated topic. But for InsurTechs that have already decided that full-stack carrier is the way to go, another decision looms on the horizon: What's the best way to get there—buying a shell company with licenses or starting from scratch to acquire licenses state by state? Here, Vouch Co-Founder Travis Hedge offers a view on that question and advice to other InsurTech executives considering the licensed carrier route.
“That’s my first piece of advice to any founder: Insurance regulators don’t really operate like venture capitalists. Being the 22-year-old is not a badge of honor really in that category,” said Travis Hedge, co-founder of Vouch, an InsurTech that targets the innovation economy—high-growth private technology and life science startups—with commercial and management liability insurance offerings.
During a recent interview with Carrier Management, Hedge and Sam Hodges, another co-founder, described the InsurTech’s journey from operating as a managing general underwriter to an authorized insurance carrier in the state of Illinois. At CM’s urging, Hedge offered advice for other founders considering similar paths, starting with the need to have experienced colleagues on board their organizations.