Why Centana Invested in First Connect
By Sarah Kim | Co-Authors: Candler Rich, Liam Mickelsen
The Insurance Industry Relies Heavily on Independent Agents, but Their Technology Needs an Upgrade
Amid constantly evolving insurance markets, independent agents are fighting an uphill battle to stay ahead and thrive in the face of constant change, from fluctuating carrier appetite to evolving regulatory demands. Despite these challenges, independent insurance agents (IAs) continue to carve out a dominant role in the industry.
IAs place ~63% of all personal and commercial insurance written in the United States, with tens of thousands of IAs that produce hundreds of billions in premiums every year.1 The number of IAs has grown due to the advantages over captive arrangements, including greater freedom to offer products from multiple insurance carriers and greater control over business operations. Additionally, as consumer brand loyalty in insurance continues to decline, the advantages of the independent agent model become even more apparent. However, despite the size and distributional power of this channel, there is significant friction between insurance carriers and IAs, worsened by the dynamic nature of the current ‘hard market.’
In order for agents to write a policy with a carrier, they first must be appointed, which involves administratively burdensome vetting, onboarding, and monitoring processes if done directly by a carrier. As such, carriers typically mandate that an IA write a minimum amount of business in order to be appointed directly. These minimums create significant hurdles for smaller agents, who must secure multiple carrier partnerships to offer diverse products, meet customer needs, and grow their businesses. Even if agents have the necessary appointments at one time, carrier appetites change frequently, and they may find that a partner they relied on for a specific line is no longer writing that type of policy. Meanwhile, it is nearly impossible for agents to stay up to date on the constant emergence of new carriers, MGAs and digital wholesalers. To overcome these dynamics, IAs often turn to aggregators that provide pooled carrier access, but the traditional aggregators that serve the market are not tech-forward in nature.
First Connect Is Shaking Up the Insurance Aggregator Model With Its Tech-Forward Platform
As the premier digital-first aggregator, First Connect provides critical market access for agents and a major distribution channel for carriers while automating burdensome and manual processes throughout an agent’s workflow. First Connect offers a marketplace and knowledge hub called Carrier Store, where agents can find 100+ carriers and MGAs, see the types and locations of businesses they are writing, and view the commissions offered, bringing much-needed transparency to a typically convoluted process. By integrating directly with carriers through APIs, First Connect allows agents to click into carriers and get access from within the platform. The system automatically imports the agent’s information, factoring in vetting questions required by the carriers. This streamlined process allows carriers to offer instant or expedited appointments, condensing what typically takes months into days or even minutes. Beyond the carrier access, First Connect also carefully monitors the quality of business agents are producing to ensure its carrier partners’ loss ratios aren’t adversely affected. First Connect’s Appetite Finder solution deepens the First Connect value proposition by guiding agents to carriers that are open to specific types of business, including hard-to-place risks, enabling them to write policies they might otherwise have turned away. These solutions result in a win-win where both the carriers and agents benefit from the ability to write with the right carrier for the right risk that fits their appetite.
The increasing significance of independent agencies as a distribution channel for carriers in personal and commercial lines underscores the necessity for solutions that enhance market access and quoting capabilities. First Connect is addressing a critical pain point, providing vital market access for independent agents with an elevated digital experience relative to incumbents that allows agents to appoint and place business with carriers in hours instead of months.
Centana’s Experience in the Insurance Ecosystem
Centana has significant expertise in the insurance ecosystem. Prior investments in the space include Gradient AI (predictive analytics for underwriting and claims), Zesty.ai (property risk analytics), and One Inc (insurance payments). Dedicated thematic work covering software tools for brokers and agents has magnified the pain points that independent agents face as well as the inadequacies of legacy offerings. Additionally, we also know from our connectivity with large insurance carriers that they need better technology to engage and manage the critical, but fragmented independent agent channel, further solidifying our conviction in First Connect.
To augment our own expertise, we are also excited to bring Centana Advisory Board Member, Libbie Bock, onto the First Connect Board. Libbie will bring additional insurance operating expertise to the newly independent organization, having previously served as the COO and CFO of Bamboo Insurance, and as the CFO of Kemper’s P&C Group.
What’s Ahead for First Connect
We are excited to partner with Aviad Pinkovezky and the entire First Connect team to support and accelerate the next stage of its growth journey. Aviad led First Connect to strong growth while operating as a business unit under the Hippo umbrella, but we are confident that the additional capital and freedom to operate independently will allow First Connect to reach new heights. This investment will enable First Connect to double down on offering a best-in-class solution connecting their agents and carrier partners.
