LEAP Launches InsurTech Platform
Effort designed to stimulate innovation in the insurance industry
The Lansing Economic Area Partnership (LEAP), Delta Dental and Farm Bureau Insurance launched a new program, PROTO InsurTech, to inspire and stimulate innovation and entrepreneurship in the insurance industry. This is the first and only startup accelerator program in Michigan focused on insurance tech and digital transformation of the industry, according to LEAP.
“The PROTO InsurTech program will provide startup companies with up to $60,000 in exchange for a small equity stake in the company,” said Tony Willis, president of PROTO Accelerator.
The four-month program features critical business development, product design and development, consulting, business plan development, marketing, branding, legal and accounting support, and mentoring and guidance from experts.
“The idea for PROTO InsurTech evolved as we were looking to expand venture capital (VC) funding opportunities in the region,” Willis said. “Within the VC realm, Fintech/InsurTech represents 30 percent of deal flow. With this in mind, we wondered how one of our major regional economic pillars, the insurance industry, viewed the InsurTech subgroup and their willingness to engage. So, we reached out to our local insurance companies to start a conversation about how to leverage this opportunity in our region.”
After exploratory conversations with local insurance companies about building InsurTech programs, many parties were interested in the idea.
Partnering with Delta Dental and Farm Bureau Insurance was a calculated fit for the new program, since both are headquartered in Lansing. The two companies are members of LEAP, and Willis described both as extremely dedicated to the region.
“Both companies have a strong commitment to the Lansing region and are invested in its long-term success,” Willis said. “They both share a passion for innovation and understand the need for greater collaboration among insurance companies, embracing the idea that the better the insurance industry does in Michigan, the better Michigan does as a whole.”
With Michigan becoming known as an insurance hub, and Lansing at the center of that sector, the location for the innovative entrepreneurial program is not only fitting, but it is also expanding.
“Lansing is home to eight insurance company headquarters ranging from regional to global in scale that are collectively responsible for over $30 billion in annual premiums/revenue,” Willis said. “But this market segment is not just large, its employment has grown 23 percent, nearly 10 times the national average, over just the past five years.
According to data on the LEAP website, Lansing’s fifth-largest employer, by number of employees, was Auto-Owners Insurance Group at 3,700 employees. Jackson National Life Insurance Co. ranked ninth with 2,400 employees. Other top employers include state government, education, health care and manufacturing.
Despite the prime location, the availability of a program like InsurTech was not previously seen in the Lansing region. PROTO is a subsidiary based in Lansing’s REO Town neighborhood, growing entrepreneurial ecosystems in the tri-county area.
“We’ve never had a detailed program that focuses on a specific industry, offers investment capital, has a curriculum to enhance business development and is backed by industry leaders,” Willis said.
Farm Bureau Insurance CEO Don Simon said mentorship opportunities that PROTO Accelerator facilitates is the main reason the company jumped on board early.
“Talent is the most valuable asset at Farm Bureau, and a program such as PROTO InsurTech provides our staff opportunities to engage with products and startups that they would likely not experience elsewhere,” Simon said.
So far, the program has seen a diverse group of over 20 applicants, according to Willis. Two-thirds of the applicants come from international companies representing IoT (Internet of Things), AI (artificial intelligence), gamification (using game techniques and elements), telematics (a method used to collect information about your driving habits) and more.
Once selected, up to two teams will be chosen for the 2019 cohort, which runs from March to July, receiving up to $60,000 for full-time work on their startup.