Columbus fintech unicorn Branch Insurance is now certified as a B Corp for its mission to restore insurance as a "force for communal good."
That means the for-profit company demonstrates a commitment to promoting community and member interests, and alters its governance structure for accountability to all stakeholders, not just shareholders. Its VC investors have been "aligned with our vision since we first started Branch," according to an announcement on the company website.
"Insurance companies like to promise they’ll be responsible with the money they collect, only to spend that money elsewhere or pad their own profits," the announcement said. "This isn’t some one-time pledge or badge for our website. It’s a ongoing commitment that gets recertified every three years, so we can make sure we’re continuously improving and doing right by all the communities we serve."
B Lab, the organization that oversees the B Corporation program, granted the certification back in October, but did not update its online directory to include Branch until this month, a spokesman said.
Branch Insurance, the DBA of Branch Financial Inc., scored 82 on the organization's scale – a minimum of 80 is required for certification. The score measures a company's standards for social and environmental performance, public transparency, accountability and more. There are nearly 6,000 B Corps worldwide.
The latest Columbus unicorn was valued at $1 billion in June with a $147 million private equity round that was the largest in Central Ohio for the year.
Branch sold its first policies and moved to Columbus in 2019. Co-founder and CEO Steve Lekas has said that while it sets premiums high enough to cover costs, the goal since inception has been to lower those costs so consumers still save.
Premiums have been rising throughout the industry, while U.S. median incomes declined since the onset of the pandemic. Middle-income households are spending almost 5% of income on home and auto coverage, Branch has said. Its policies average about 20% savings on auto and up to 35% on home coverage.
The startup uses technology to streamline administration, while avoiding expensive ad campaigns. It works with mortgage lenders, auto dealers and home security services to present bundled home and auto quotes at the time people are actively shopping for insurance.
"We cut out the unnecessary costs that major corporations baked in over the last hundred-something years," the company said in its statement.
The pool of member premiums is meant to cover claims, while Branch takes a flat 5% management fee.
Other Central Ohio B Corps include Jeni's Splendid Ice Creams, Crazy Richard's Peanut Butter Co., New Reach Community Consulting and Rebel Financial.
