When Kate Terry left her position as a senior vice president at Liberty Mutual Insurance, it was because she thought the industry was "missing the way the world was changing."
Take it from someone who's spent a dozen years in the insurance business.
Terry's goal, upon leaving Liberty Mutual, was to build an insurance product for the modern economy. So when her now-co-founder Jay Grayson, another Liberty Mutual executive who'd left the company, asked if she wanted to start an insurtech company, she knew she was onto something.
"[Grayson] had seen the same things I had," Terry said. "We saw that the industry was not serving modern consumers, and we wanted to change that."
The duo's solution: Surround Insurance, a startup whose business model lies in a monthly subscription. The product, a starter pack of property and casualty insurance covering renter's insurance, auto insurance and liability insurance for freelance professionals, is built for young professionals between the ages of 22 and 26 on the threshold of a new career. The insurance bundle costs $60 a month.
Now a member of Harvard's latest Launch Lab X cohort, Surround Insurance's ultimate goal is to simplify the process of buying insurance by offering exactly one product. Terry, given her industry experience, is confident her startup has no direct competitors.
“We’re offering just one product to start with, which includes driving coverage, biking and as a pedestrian, renter's insurance and freelance liability," Terry said. “Think of it like insurance buffet versus a la carte.”
Terry and Grayson's long-term goal is to build completely personalized insurance. For now, the two-year-old upstart asks its potential customers how they “live their life” and tailor subscriptions accordingly.
The startup’s sales strategy makes it clear that Surround Insurance is led by insurance veterans. In this case, it's insurance first, tech second.
“Most of insurtech is led by tech folks,” Terry said. “We are taking a different approach and selling through independent agents.”
This may be a smart approach: Independent agents are the largest and most preferred channel for consumers, writing 35.5 percent of all personal property and casualty premiums. And a key portion of Surround Insurance’s audience—parents—tend to trust independent agents, Terry said.
The company is backed by a seed round of $1.5 million, raised from retired insurance executives and West Coast insurtech investors like Sure Ventures and Plug and Play, along with institutional investors. Surround Insurance plans to launch its product in Massachusetts in April. The initial rollout will provide basic coverage with add-ons like disability insurance, pet insurance and travel insurance.
In the succeeding 12 months, it plans to expand to 10 states with big metropolitan hubs. The startup has a full-time staff of five based out of Harvard's Launch Lab X, along with six contractors.
