When David McFarland, founder of API-based commercial insurance startup Coterie, pitched to student investors at the Refinery Ventures Student VC competition last month, he shared how that the impetus for creating the startup was simple: He loves insurance.
Launched in September of this year by McFarland and COO Kevin Mackey, the startup was guided by McFarland's noted passion — and, notably, McFarland's observation of industry pain points.
Specifically, insurance companies' use of agent networks to sell and manage policies.
Although he believes agents are important and crucial, “for certain types of coverage and certain types of insurance it might not be necessary to have the agents there," McFarland said.
A better way? “We think that these triggering events are probably the most ideal places to attach insurance, and that’s what we’re doing."
McFarland explained that these "triggering events" were those that brought insurance to the forefront of potential customers' mind — as most people, he argued, aren't thinking about policies until they need them (like when they rent a new building or take a job that requires coverage, etc.). This stays true even though "a lot of companies spend a lot of money trying to make you care about insurance,” added.
Coterie works like this: Customers gives the company their information online when they need the coverage, and they receive it instantly. Coterie also sends this policy data to the entity that got the consumer thinking about coverage in the first place (landlords, bosses, etc.). This differers from the typical agent process that usually involves a phone call and waiting a week or so for coverage.
Coterie's system instead "enables us to sell insurance at these various points of relevance much more easily,” he said. The company's description echoes this: "We work through the tools you already use to make buying, changing, and renewing insurance easy, saving you time and money."
Since coming to the Queen City, the Coterie team was able to raise $1.1 million from local angel investors.
McFarland, who came to Cincinnati after helping grow a Chicago insurance startup to $15 million in annual revenue, said the Coterie team is happy to be based here. Especially, he added, since Cincinnati is huge in the insurance world, where the startup is among the likes of Western and Southern, Great American Insurance and American Modern.
