USAA plans to snatch up Noblr, an InsurTech digital insurer offering usage-based auto insurance.
The company declined to disclose its purchase price, though the deal is expected to close later in 2021, following regulatory approvals.
USAA, a Texas-based P/C and life insurer focused on members of the U.S. military and their families, said the acquisition will help make it more competitive by modernizing its offerings. The company also cited its financial strength as allowing it to accelerate innovation in this space through acquisitions.
“The acquisition of Noblr, Inc. increases our competitiveness in the marketplace and adds the choice of [usage-based insurance] capability for our members,” Wayne Peacock, USAA President and Chief Executive Officer, said in prepared remarks. “Members will get personalized pricing that fits their risk and usage profile, better control over the cost of their auto policies and an exceptional end-to-end digital experience.”
Plans call for integrating Noblr’s product line into USAA’s own operations. Noblr’s 50 employees will be kept on and continue working with Noblr customers while USAA revs up efforts to offer those same products to its own members. USAA will offer usage-based insurance at a state level over the next three years, beginning in 2021, starting with the eight states where Noblr is currently available and expanding to additional states through the year.
Noblr, which launched in 2017, has not publicized its total venture financing. The insurer’s backers include Hudson Structured Capital Management, White Mountains Insurance Group and SiriusPoint Ld. Third Point Re is also a backer, according to the company’s web site.
Whether or not the Noblr name continues is an open question. A spokesperson explained by email that “USAA will evaluate branding opportunities after the transaction is completed.”
USAA, meanwhile continues its SafePilot, behavior-based insurance program, which the insurer said has grown robustly through 2020. USAA explained that the Noblr program will be separate from SafePilot, though it noted that both share the goal of encouraging safer driving in return for savings. Both programs will be optional for members.
Usage-based insurance products have the promise of a lower premium based on miles driven and behavior behind the wheel, allowing for savings and rewards based on good driving behavior. USAA said this was a coverage element it wanted for its active military members “who are highly mobile and frequently deployed.”
Other insurers have expanded usage-based insurance programs over the years and subsequently released related apps, including Travelers, Liberty Mutual, Nationwide, Plymouth Rock, Progressive and State Farm.
Digital insurer Root is arguably the biggest InsurTech in the space. Launched in 2015, the company’s signature auto insurance policy deploys usage-based insurance to collect telematics data from its app, and then a test drive helps to shape final pricing. The company recently upped its game with its RootReady app, which uses sensors from connected cars (2015 or newer General Motors vehicles to start) to get an instant quote in the Root app without taking the Root test drive. Root, which is not yet profitable, raised $724.4 million in an October 2020 IPO.