State Automobile Mutual Insurance Co. is rolling out a $25 million venture fund designed to back innovative P/C industry ideas and startups, but there’s a twist.
The project is launching through the Ohio insurer’s State Auto Labs innovation arm in collaboration with Rev1 Ventures, an Ohio-based firm focused on connecting startups with corporate innovation teams.
Rev1 bills itself on its website as a combination startup accelerator and venture capital fund. State Auto Labs debuted last November.
State Auto terms its deal with Rev1 as a “unique collaboration.” It describes the arrangement as one that will connect InsurTech and FinTech startups with capital, along with technology and insurance industry experts. Investment priorities include the Internet of Things, wearables and other related technologies; data-driven innovations that will help improve analytics and decision-making; technology that will help boost both traditional and emerging distribution channels; and products that can anticipate changing needs of insurance customers and also help tap into new markets.
The goal is to develop technology that State Auto will both use on its own or spin off into other companies, Rev1 CEO Tom Walker told Carrier Management via email statement.
Insurers are increasingly creating venture capital arms or investing directly in new technology that can help modernize or benefit their industry for both personal and business customers. They include Nationwide, Starr Companies, Berkshire Hathaway, Chubb, Hiscox, Liberty Mutual and Munich Re, among others.
State Auto said it has jumped into its new project with Rev1 in an effort to plan ahead for the industrywide technology transformation to come.
“This next progression will come from both inside and outside of the insurance industry,” Garland said in prepared remarks. “The insurance companies that will be successful in the future are those that leverage innovations from a variety of sources.”
Tom Walker, CEO of Rev1 Ventures, said the fund with State Auto is very much with an eye on the future.
“This is a critical time for the insurance industry, and we recognize that there is a better way to support the development of innovations that will fuel business success for startups and deliver cutting-edge technologies” for companies,” Walker said in a prepared statement. “This fund demonstrates Rev1’s commitment to finding new ways to identify and grow transformative technologies that are changing industries.”
State Auto collaborated with Rev 1 because it views itself more as “insurance people” and not investors, with the deal enabling it to “win in both spaces,” Garland told Carrier Management in an email statement.
Source: State Auto, Rev1 Ventures