The Boost Team

When it comes to insurance, there are two major regulatory types: admitted and non-admitted.  Admitted insurance refers to insurance products that have been licensed by the Division of Insurance (DOI) in the state where they are being sold and are subject to state regulations. In addition to meeting state standards on things like price, coverage, and packaging, admitted insurance products offer additional protection to their end buyers - if the carrier fails, the state will pay a certain amount of its outstanding claims. Non-admitted insurance, on the other hand, refers to products that are not licensed or approved by the state DOI, and do not have the same financial protections from the state. There can be many benefits to offering non-admitted insurance products, but because they aren’t regulated by the state, there are unique responsibilities that agents, brokers, and insurance have to keep in mind. In this blog, we will break down 3 important areas where non-admitted insurance products differ from admitted insurance products, and explain the implications for agents and brokers.  By nature, non-admitted insurance products exist to cover hard-to-place risks that most admitted products won’t cover — whether that be insuring a barrier island home that is frequently at risk of flooding or covering Beyoncé’s voice in the event of injury.  To sell non-admitted policies that cover these unpredictable, difficult-to-price, high-risk situations, regulations require an agent or broker to first get several declinations from separate admitted insurance carriers. The exact number can vary by state, but the standard is typically three declinations.   A declination is a written refusal of an admitted insurance carrier to issue an insurance policy. To get one, the agent or broker will have to fill out an application or written request for coverage to each insurer, and then wait for the insurers to return documents that decline each request. This process ensures that the agent or broker has done their due diligence in attempting to place the risk in the admitted market, and that they understand and accept responsibility for offering a non-admitted policy. This process of getting three declinations often has to be done for every policy sold. Going back to our examples: say an agent goes through the usual process to find an insurance policy for their client’s island home: they make inquiries to three carriers for admitted products, are declined three times, and eventually place the risk with a non-admitted product. If their client’s next-door neighbor then calls and asks the agent to find them a policy as well, the agent would generally have to once again try for three different admitted products before moving on to the non-admitted market.  There can be state-specific nuances to the compliance requirements regarding declinations. In some states, there may be exceptions to the declination rule if no equivalent product exists in the admitted market. For example, crypto wallet insurance is a first-of-its-kind insurance offering, and only currently exists as a non-admitted product. In some states, this means the agent or broker selling it can be absolved of having to do the due diligence of getting three declinations from admitted carriers.  Some states also allow for getting the declinations once, and then using it for all similar risks going forward. In that case, the agent in our above example wouldn’t need to get three new declinations for the neighbor’s house - the risk would be similar enough that they could use the declinations they had already received as justification for placing their client with a non-admitted product. Every agent and broker needs an insurance license to sell insurance products, and most will need more than one. Insurance is licensed at the state level, so a license is required for each state you intend to sell in. There are also different types of licenses required for selling admitted and non-admitted products.  Here are the four types of licenses an agency will need to sell non-admitted insurance products. Current agents and brokers will already have the first two license types but may need two additional license types to start selling non-admitted products. The basic license required for selling insurance is known as a “producer” or “agent” license. This is obtained by completing a pre-licensing course and passing the required tests in a particular state which allows an individual to sell insurance in that state.  An agency or brokerage will also have to attain an “entity” or “agency” license. This license allows a company (rather than an individual) to sell insurance within the resident state.  Selling non-admitted insurance products requires an additional non-admitted license. In most states, the non-admitted license will have an entirely separate license number from the individual license.  Finally, selling non-admitted insurance products requires a surplus lines license. While non-admitted products don’t have to go through the intense approval processes with the DOI, the companies that create these products do need to submit articles of incorporation, a list of officers, and various financial and company information to the surplus lines office, which is run and regulated by the state. Any agents or brokers who wish to sell non-admitted insurance policies also need to be licensed by this office.   Both admitted and non-admitted insurance products are subject to taxes in the states where they are being sold. While every state has its own taxes and fees, there are some standard differences between how admitted and non-admitted insurance products are handled across the board. The major differences boil down to how and by whom taxes and premiums are calculated and collected.  For admitted insurance products, taxes and fees are generally included in the premium, and are calculated and remitted by the insurance carrier. The broker or agent selling the product doesn’t usually need to concern themselves with taxes for these products, since those are the carrier’s responsibility.  Non-admitted insurance, on the other hand, is not so simple. For these types of insurance products, the premium calculations are handled by the insurance carrier, and the taxes and fees are calculated separately by the broker or agent. The broker or agent is then responsible for collecting those taxes and passing the money on to the appropriate state government(s). The process goes something like this: The insurance carrier determines the premium amount and sends that information to the agency or brokerage, along with the policy documentation and a state disclosure form declaring that the non-admitted product complies with state regulations. From there, a broker or agent has to calculate Excess and Surplus lines (E&S) tax on top of the premium and any surplus lines fees. Many agents and brokers also add an administrative fee for non-admitted products to help offset the greater administration costs. Once the total amount is calculated, it can be shared with the policyholder.  Once a policyholder makes their payment, the broker or agent will have to send the premium payment to the carrier, remit the taxes to the state, send fees to the surplus lines office, and take the administrative fees for themselves. For this process, agents and brokers typically use a state-specific surplus lines agent management system (AMS) to file the product, policy, policy number, effective date, expiration date, line of business, E&S carrier, and the premium amount. The AMS will also calculate and reconcile the taxes, and then that state will send them a bill at the end of the month, quarter, or year (depending on which state they are selling in) to settle the remaining taxes. In short, non-admitted billing is much more operationally burdensome for brokers and agents to support versus admitted, which is why adding on an additional administrative fee is very common.  Non-admitted insurance products are an important part of the insurance market and can help provide vital protection for hard-to-place risks. Being equipped, informed, and licensed to sell these products can open up lucrative new lines of business for agents, brokers, and insurtechs. If you want to learn more about selling non-admitted insurance or getting your insurance licenses through Boost’s licensing-as-a-service, contact us.

For both cybersecurity service providers and insurtechs that focus on commercial clients, adding a cyber insurance product can build significant recurring revenue for your business, and deepen your relationships with your current customers. Creating a new insurance product, however, is much more complex than a new piece of software or a physical gadget. Building an insurance program from scratch is a yearslong endeavor that requires a significant amount of capital and specialized expertise. A much faster path to market is to white-label an existing cyber insurance product, and offer it to your customers. In this article we’ll go over the process of getting to market with a white-label cyber insurance product, and the advantages of this route vs. building a new product yourself. A white-labeled product is produced by a particular company, then sold by other companies under their own brand. This is common with physical goods, particularly products sold as part of a certain store’s brand.  For example, Costco offers a broad variety of goods under their Kirkland Signature label, ranging from jeans to potato chips. However, Costco doesn’t own and operate the factories and logistics chains necessary for producing hundreds of diverse items. Instead, they source products from other businesses that do manufacture those goods, and then sell them in-store under the Kirkland Signature branding.  The same principle applies to white-label insurance. Insurance-as-a-service providers such as Boost have already invested the time and resources to build new insurance products, which other businesses can then offer under their own branding. This allows businesses to get to market with a new insurance offering at a much lower time and cost requirement than would be required to build a new product themselves. Once your company decides to offer white-labeled cyber insurance, there are a few steps to go through in order to get to market. The first step is choosing the insurance provider whose products you want to white-label. This could be an insurance-as-a-service provider like Boost, or possibly a traditional insurer.  When selecting a partner, make sure to ask about two things: what they allow for white-labeling, and whether the product can be customized. Some insurers allow for their products to be resold, but not re-branded; others offer products as-is and don’t allow changing things like the coverage configurations. Be sure that your partner can deliver on what your business needs (and expects). You know your customers best - what they need, and what they don’t. Assuming your partner allows customization, the second step is to configure your cyber insurance product so that it’s right for your audience.  There may be some coverages that are particularly important to your customers, and others that aren’t relevant to their particular business needs. In general, the more an insurance product covers, the more expensive it is. You can ensure the best value for your customers by building an insurance package that includes all the protections that they need from cyber insurance, with nothing that they don’t. If your business is an insurtech, you’ve already got this covered. If your company is new to insurance, however, you’ll need to get an insurance license to gain the full benefits of offering cyber insurance. There are multiple types of insurance licenses, and the exact requirements vary from state to state. Since insurance in the U.S. is regulated at the state level, you’ll also need a license from each state you intend to sell insurance in. However, this is less difficult than it sounds. With support from a good partner, the process can be very straightforward and relatively painless. After you’ve settled on a partner and product, you’ll need to connect your partner’s system to your digital experience to offer the product to your customer. When you work with Boost, this means leveraging our API to build an integration between your website or app and Boost’s policy administration system.  If you’re not familiar, a policy administration system (PAS) is the system of record for every transaction related to an insurance policy. For digital insurance, the PAS is the technological underpinning that allows customers to buy and manage their policies online. Different PAS have different capabilities, and some are better able to support digital insurance workflows than others. This is another area where it pays to get detailed with your partner, so there are no surprises when it comes time to deploy. Once the integration is complete, you’re ready to start connecting your customers with cyber insurance. Your customers’ purchase experience can vary depending on your partner’s capabilities and business policies.  Here’s how it works with Boost: your customers will be able to buy your white-labeled cyber insurance directly from your existing website or app, under your own brand. The customer can manage every part of their policy lifecycle digitally, from quote to purchase to modifications, with no offline manual processes. The cyber insurance product will be branded as your company’s product, all the way down to the logo on the policy documents. There are several upsides to offering a white-labeled cyber insurance product instead of building an entirely new cyber product just for your business to sell. The benefits include lower costs, faster time to market, and easier, more scalable operations. Building a new insurance program requires significant financial investment, particularly when it comes to expertise. Insurance is complex, and successfully creating a new product requires actuaries, underwriters, insurance regulatory attorneys, and more. Then there’s the tech side - if you want to offer your product digitally, you’ll need a PAS capable of supporting all of the necessary insurance operations. This means considerable development work, even starting with an “off the shelf” PAS.  All in all, the costs of building a new insurance program from scratch typically run into the millions of dollars. White-label products have already gone through the development process, and are ready to sell digitally. While there are still development costs required to connect your partner’s PAS to your digital experience, those expenses are usually a fraction of what it would cost to create an entirely new cyber product and the digital infrastructure to sell it. While exact timing can vary, it’s safe to expect a timeline of at least three years between starting the process of creating a new insurance product, and being able to sell your first policy. There are many steps involved in building an insurance program from scratch, and some of them - like convincing a carrier to back your product - can be very difficult to accomplish for new entrants to the insurance market. Since white-label cyber insurance products are already built and ready to sell, the go-to-market timeline for offering these products is dramatically shorter. You’ll just need to sign with your partner and then build the necessary integrations, a timeline of weeks or months instead of years. Insurance programs are constrained by their capacity - the maximum amount of value a program can insure, as determined by the total amount of capital available to cover its losses. Once a program has sold as many policies as its capacity can support, it can’t sell any more until more capacity becomes available.  Acquiring more capacity for an insurance program requires complex negotiations with licensed insurance or reinsurance carriers, which can take a long time. With white-label cyber insurance products, your partner will have already secured the capacity needed to sell your product, and built a network of relationships with capacity providers to ensure their programs can continue to scale.   Launching your insurance offering is only the beginning. The program will need to be managed on an ongoing basis. This includes responsibilities like ensuring that it remains compliant with all relevant state regulations, maintaining and continuing development of the technology required to sell digital insurance, and managing claims from your customers (which are legally required to be handled by licensed professionals).  Building your own cyber insurance product means that you’re responsible for these ongoing operational needs, and you’ll need to hire in-house resources to manage these them. If you choose to white-label, however, then your partner will be the one to manage these ongoing program requirements. This represents significant opex savings, and allows non-insurance companies to avoid a costly distraction from their core value and offerings. Cyber insurance is a big revenue opportunity for insurtechs and cybersecurity companies alike. White-label cyber insurance allows businesses to tap into that opportunity, with significantly lower barriers-to-entry than building a whole new cyber insurance product themselves. Thinking about adding cyber insurance to your offerings? Our free ebook has everything you need to know. Download The Comprehensive Guide to Offering SMB Cyber Insurance today, or get in touch with our experts to learn more.

Today we have some very exciting news to share: Boost has partnered with Canopius US Insurance Holdings, Inc. a subsidiary of global specialty (re)insurer Canopius Group. As part of this partnership, Canopius will provide us with long-term, dedicated risk capacity to back our insurance programs - and they’ve also made a strategic investment in Boost. First, let’s talk about the capacity portion.   As part of Boost’s insurance infrastructure-as-a-service platform, we’ve assembled a panel of diverse reinsurance partners to provide capacity for the insurance products we offer. This allows us to offer new and unique insurance programs for our customers to white-label - every program includes built-in capacity so they can seamlessly scale as their business grows.  With Canopius as a partner, we’ll be able to accelerate our new offerings and build out even more innovative new insurance programs. For our customers, this translates into more opportunities to cost-effectively expand their business with new insurance lines, with programs ultimately backed by one of the biggest names in reinsurance. For Canopius and our other reinsurance partners, the Boost platform connects their risk capital with high-growth insurance programs and modern distribution channels. This allows them to more efficiently deploy their capital across a diverse portfolio of programs relative to traditional one-off program business. It’s a win-win for Boost, our customers, and our risk capital partners. While our partnership announcement is exciting enough, we are also excited to share that Canopius punctuated their commitment by making  a direct strategic investment in Boost, as part of a broader financing round that included a number of new and returning investors including RRE Ventures, Fin Capital, and IA Capital Group. The additional funding will allow us to add a number of powerful new features to our technology stack, and we can’t wait to get started. Stay tuned for more news to come, and thanks for coming along on this journey with us. Learn more about how Boost works with reinsurers, insurtechs, MGAs, brokers and agents, and embedded insurance platforms.  

In the world of insurance, there are two kinds of products: admitted and non-admitted. Simply put, admitted insurance products are those that are approved and regulated by the state, and non-admitted insurance products are those that are not—but this explanation can raise more questions than it answers.   In this blog, we break down the major differences between admitted vs. non-admitted insurance products and answer some commonly asked consumer questions.  An admitted insurance product has been licensed and approved by the Division of Insurance (DOI) in the state where it’s being sold. Each state’s DOI has requirements for everything from how much carriers can charge to what kind of coverages are offered to how the carriers communicate with customers. The process of getting a product admitted through this office—or even making changes to a product that has already been admitted—is lengthy and complicated for carriers. But in return, the carrier and its customers get some financial protection from the state.  As a consumer, you can be sure that if a product is labeled as “admitted,” it has gone through all the necessary scrutiny of its policy requirements, language, and rates, and it meets your state’s DOI regulations.  If your carrier “goes under,” you will have an additional, state-funded safety net wherein debts can be paid by the state up to a certain amount.  On the other hand, non-admitted insurance products are those that have not been licensed and approved by a DOI. These insurance products fall outside of the standard market for that particular state and, therefore, don’t meet its requirements.  When a product falls outside of the standard market, it doesn’t mean that it’s covering an illegitimate risk or that insurance wouldn’t be helpful protection. It simply means that it’s a risk the state doesn’t want to cover. If an insurance carrier wants to sell that product anyway, they can—they would just need to sell it on a non-admitted basis. Being non-admitted allows these products to operate outside of DOI regulations and restrictions. This makes them much more flexible in what they can cover, but they also don’t receive the same financial protections from the state.  Examples of non-admitted products include parental leave insurance or crypto wallet insurance. They don’t fall into the standard market insurance category that products like health insurance, home insurance, car insurance, or pet health insurance do, but they still offer important protection that people are willing to pay for.  This is an understandable and common misconception. When people hear that non-admitted insurance products aren’t licensed or regulated by the state, they might think that non-admitted products are entirely unregulated or even illegal. But this isn’t the case.  Non-admitted products are legitimate insurance products that undergo their own forms of approval before going to market. While they don’t have to go through the intense approval processes with the DOI, the companies that create these products do need to submit articles of incorporation, a list of officers, and various financial and company information to the surplus lines office, which is run and regulated by the state. Additional state guardrails for non-admitted products include taxes and licensing. All non-admitted products are subject to being taxed by the state and all agents who sell these products need to be licensed brokers in the state where they conduct business.  In short, the state is definitely involved with non-admitted products, but the regulation of these products is significantly less intensive when compared to those of admitted products.  Because admitted products are “approved by the state” and non-admitted products are not, you might assume that admitted products are always the more responsible choice as a consumer-—but that isn’t always the case. There are many reasons why choosing a non-admitted insurance product could provide better protection than an admitted one.  First, the distinction between admitted vs. non-admitted is largely administrative and doesn’t say much about the overall quality of the product or the stability of the carrier offering it. You might be in the market for home insurance, and there are both admitted and non-admitted options available, but the coverage of the admitted product doesn’t meet your needs.  This is an especially common problem for people who live in areas with frequent natural disasters like fires or hurricanes: their risk is often outside of what an admitted product is built to cover, and so they may not qualify for the level of protection they need. In some cases, if your home is deemed too high-risk, you might even not be able to buy an admitted policy at all. Since non-admitted products are more flexible in what they can cover, you may be able to buy a policy that provides more robust protection from natural disasters (though it will likely cost more than an admitted product might). Second, there are situations where you could benefit from insurance, but no admitted products exist to provide it. In these situations, non-admitted insurance products are the only option. For example, cryptocurrency is an increasingly popular market for consumers, but there are currently no admitted crypto wallet insurance products available. This can be a serious problem for crypto wallet holders because there are billions of dollars in cryptocurrency being held in online custody. Additionally, crypto theft and large-profile hacks are increasingly common, but less than 1% of consumer assets are insured. There are some options for crypto institutions to have insurance, but even in those cases, it does not provide explicit protection for individuals. In the event of a hack, consumers can lose all or a portion of their holdings with no guarantee from the crypto institution that they will be reimbursed. The only way for an individual consumer to protect their cryptocurrency holdings would be through non-admitted crypto wallet insurance.   The distinction between admitted insurance products vs. non-admitted insurance products has an abundance of implications for insurance carriers, agents, and brokers, but the biggest impact that this difference has on consumers boils down to pricing and coverage options. Because states aren’t able to set rates for non-admitted insurance, non-admitted policies usually cost more than comparable admitted insurance. Additionally, as a consumer, you may not get the same kinds of tax breaks as you could with an admitted product. However, one of the reasons non-admitted product costs often run higher is that they can have more robust options for protection and coverage than admitted products do.   For example, if the state were to set a rate on accident & illness pet insurance and tell carriers they can’t raise rates on policies above a certain threshold, this would impact policies significantly. The state might also have more stringent rules that could impact your eligibility for coverage, such as age restrictions, breed restrictions, pre-existing condition restrictions, etc. For carriers to affordably meet the state’s requirements, they would have to limit the actual benefits of the coverage.  A more affordable, admitted product might not be able to include certain protections, or might exclude certain pets entirely based on eligibility. A non-admitted product would cost more to buy, but would also have the flexibility to offer more coverage to more people. While an admitted product will be a good choice for many consumers, non-admitted options are important for the subset of people who aren’t a good match for what admitted products can offer. The biggest benefit for admitted products is that they are backed by the state’s guaranty fund in the event of a carrier’s insolvency. Insolvency is when a carrier is unable to pay its debts—maybe the carrier underwrote too much risk, or a global event caused customers to max out the carrier’s borrowing capacity. Insolvency is relatively rare, but it does happen occasionally, and the effects are different depending on the kind of product. When this happens to carriers with admitted insurance products, the state will pay the carrier’s claims up to a certain amount.  This can give consumers peace of mind because it ensures that costs won’t come back around to them. You could confidently pay your monthly premium on your admitted insurance policy knowing that if your carrier can’t cover the cost of your claims, the state will.   On the other hand, if a carrier were to become insolvent, any of their non-admitted products would not be protected by the state. For consumers in this situation, the financial losses that should have been covered by your insurance policy will most likely come back to you, and you could be tied up in legal disputes during the liquidation of the carrier.  As a consumer of insurance, it is always important to do your research on your carrier and understand your insurance policy. You can check sources like A.M. Best Ratings—or other similar rating agencies—that can help you make sure a potential insurer is financially solid and worthy of your trust.  Knowing the difference between an admitted vs. non-admitted insurance product can help you to make a more informed decision, ensure that you are getting the biggest bang for your buck in terms of coverage, and help you know what to expect if your insurance carrier “goes under.” After reading our breakdown of admitted vs. non-admitted insurance questions, we hope you’re feeling more comfortable with the topic.  Boost makes it easy for anyone to understand the world of insurance or to get started offering embedded insurance themselves. Contact us to learn more.

Offering embedded pet insurance is a great way for companies that already serve pet owners to bring in an ongoing source of revenue. But just like every other product out there, marketing and advertising are key contributors to your overall sales. If you’re new to the industry, here are six pet insurance marketing tips to keep in mind when selling pet insurance. Because pet insurance is still relatively new in the US, some of your customers may not even be aware that it’s an option. So how do you convert them?  From industry experience, we know that customers are most likely to sign up for insurance when it’s offered as a complement to their existing pet purchase. If you can make them this offer at the point of sale as an add-on to what they’re already buying, you are much more likely to win that additional revenue (and turn a one-time customer into an ongoing one). Your existing relationship with your customers can help you make the right insurance offer at the right time. From their purchase records, you probably already know what kind of pet(s) your customer has, and how much they tend to spend on pet expenses.  Leverage that data in your pet insurance marketing strategy. A customer who regularly buys vitamins and specialty food for their pet might be interested in a wellness package. A customer with several pets might be interested in a multi-pet discount offer.  Additionally, you likely have a database of prospects that you’ve identified as your target audience, but who haven’t purchased with you yet. Since you’re already actively marketing to this group, you can add your pet insurance offer into the mix and the additional value may help nudge them over the conversion line. Insurance is complicated, and sometimes consumers miss out on the coverages they need because the details are confusing or buried in legalese. As a trusted source for information about their pet, your brand is in a great position to break it down for them.  In your pet insurance marketing, offer detailed explanations of how your pet insurance works, and what is or isn’t included, in clear, natural language that your customers can easily understand. Avoid confusing your customers with jargon or complicated legal statements, and don’t try to hide details in small print. Everything in your pet insurance advertising should be understandable by the average consumer, and any information about what is or is not included needs to be easily visible. One of the most powerful sales tools you can get is a real-life story about how your customer’s pet insurance made a difference for them. Consider reaching out to insurance customers who save on big bills, and see if they’d be willing to share their stories so you can leverage these in your pet insurance marketing.  When sharing testimonials for insurance, there are a few things to keep in mind: This sounds like a marketing no-brainer, but this is particularly important for insurance advertising. If a state insurance commissioner finds your ads to be misleading or deceptive, you could be hit with fines and other enforcement actions, so it is always advised to be transparent when selling white-label pet insurance.  If you use any statistics in your insurance ads, you’ll need to cite where that information came from. It pays to go the extra mile for good, credible sources - a great statistic isn’t so great if you have to attribute it to “koolstats4u.biz” in your ad. It’s a good idea to make sure that nothing related to insurance goes live without first passing a compliance review. If you use external marketing agencies for things like paid search ads, set up a review process to ensure that all insurance-related copy is vetted by your team before going live, including for A/B tests and similar experiments. If your company offers pet-related products or services, selling pet insurance is a great option and it is so easy to do with Boost. If you’re just getting started with pet health insurance, our team is here to help. Get in touch with us today.

In this blog, we’ll cover what D&O insurance is, why it’s necessary for businesses, and how the  D&O insurance needs for startups differ from more established companies.  Directors and Officers Insurance (D&O) is a type of liability insurance that focuses on protecting a company’s senior management from lawsuits related to carrying out their roles at the business. This can include lawsuits against the company itself, or against individual executives (“directors and officers”). These suits might be filed by employees, vendors, shareholders, or other third parties. If a lawsuit is filed naming one or more directors and officers, a D&O policy ensures that the cost of resolving the suit does not endanger their personal assets. D&O insurance is often included as part of startup management liability insurance packages, but can also be available as a standalone coverage. While specific policy details may vary, D&O insurance typically covers the costs related to resolving the lawsuit. This can include anything from legal fees for defending against the suit to penalties or settlement payments if the suit is lost or settled out of court.   Some of the most common lawsuits covered by D&O relate to: Some common exclusions in D&O policies include: This list is not exhaustive, and there can be variation in what individual products do or do not cover. If a business is large enough to have a management team, then D&O insurance is a must-have. There are two big reasons for this: risk reduction, and raising money. The first reason is pretty self-evident: buying insurance for a specific risk reduces the chances that the risk will negatively impact the business. In this case, the risk is that a person or business entity might file a lawsuit alleging misdeeds by the management team. Even if the lawsuit were ultimately found to be groundless, defending themselves in court could still cause the targeted person or company to rack up significant legal bills. A D&O insurance policy can recover any losses resulting from a covered lawsuit. The second reason relates especially to businesses looking to raise capital: many investors require a company to have D&O insurance before they’re willing to provide financial backing. Investors want assurance that their funds will be used to grow the business (and their potential returns), not be burned up in possible legal costs. Additionally, investors may require it for their own protection. It’s common for an investor to join the portfolio company’s board, and without D&O insurance their assets could then be at risk in a lawsuit against the company. Just like more established businesses, startup businesses need to have  D&O insurance (especially as they prepare to fundraise). However, traditional D&O underwriting guidelines can make it difficult for startups to get the necessary coverage . The biggest obstacle? How traditional D&O products evaluate risk. D&O products designed for large, established companies tend to assess a business’s risk based on factors like historical revenue, balance sheet quality, number of employees, and how long the company has been in business. This is a problem for startups, which are generally small, recently established, and may not have any revenue yet. Under traditional underwriting guidelines, startups are often flagged as high-risk, making coverage very expensive (if they’re even offered coverage at all). This can lead to startup companies being priced out of D&O policies, or needing to go to the non-admitted market to purchase coverage.  While the high-risk assessment might make sense for the kind of company it was designed around - if a company were in business for ten years with hundreds of employees and little to no revenue, it would certainly raise questions about its management - it ignores that startups are a different kind of entity. For young companies still building their products and business, a small team of recent hires and no revenue doesn’t mean the organization is poorly run; it just means it’s new. Startups need D&O insurance products that provide the coverage they need, at a price they can afford. This means products that assess risk differently than traditional D&O aimed at established companies. For example, at Boost we tackled this problem by building a risk assessment algorithm that considers a startup company’s institutional backing. When a VC firm is considering whether to back a startup, the firm has access to a huge amount of information related to the startup’s business and practices - and generally goes through it with a fine-toothed comb.  If a startup is included in a top-tier investor’s portfolio, then it’s reasonable to conclude that the startup has a viable business proposition, access to funds and mentorship from the VC management, has a larger potential to succeed - all things that make their risk profile acceptable in a D&O portfolio. This alternate assessment allows us to offer startups significantly lower rates for D&O and similar coverages than traditional insurance products. For businesses that provide commercial insurance, offering D&O insurance geared at startups can be a strong growth opportunity. Providing insurance specially tailored to startups’ needs allows you to build relationships with early-stage businesses that can grow as they do. For example, while a startup might start with D&O, as their business grows they’ll soon need a combined management liability product that includes D&O along with Employment Practices Liability (EPL), Fiduciary Plan Liability, and cyber liability coverages, which will protect the directors, officers, managers and the entity from governance, finance, benefits and management activities. As your startup customers mature into growth-stage companies, their insurance needs are likely to increase even further. Having a business relationship in place positions you for future upsell and cross-sell opportunities. Ready to add startup D&O insurance to your lineup? Get in touch today to get started.

From accidents to theft to lawsuits, there are plenty of scenarios that could result in unexpected costs for a small to medium business (SMB). Insurance is a vital tool for SMBs to protect themselves and their employees from potentially serious financial losses.  However, with so many kinds of SMB insurance products on the market, it’s not always clear which types a certain business may need. In this blog, we will outline four useful insurance products and explain which kinds of companies would most benefit from having them.  With 98% of businesses having an online presence, and many businesses storing sensitive customer and company data in internet-accessible databases, cyber insurance has never been more relevant or necessary. As the world becomes even more digital, the volume, sophistication, and frequency of cybercrime are rising, and the need for cyber protection is growing in equal measure.  When a company experiences an attack on its digital property, the cost can be devastating. In 2021, the average cost of a data breach hit $4.24M, and on average, it takes a minimum of two years for SMBs to pay off the cost of a data breach. Commercial cyber insurance is a product that helps businesses financially protect themselves from the risk of cybercrime. Similar to any other insurance product, companies can save themselves from exorbitant expenses in the event of a cyber attack by making regular premium payments. A cyber insurance policy typically covers expenses such as:  Even more comprehensive policies might reimburse a business if its money is stolen in a fraudulent transaction. One example would be if a company’s email is hacked, and the scammer uses it to initiate a fraudulent bank transfer. Other policies can include coverage for hardware replacement if computers were permanently damaged, higher ransom payments to regain control of systems or data after a ransomware attack, or reimbursement if a scammer tricks the business into sending money. Any company with an online presence can and should have some form of cyber insurance. If a company has a website where it conducts business—making transactions, storing information, or communicating with customers—or if it uses a cloud storage system to house critical information, that company would benefit from cyber insurance. Large corporations tend to be more appealing targets for cybercriminals because criminals can make more money per hack. However, SMBs are also frequently attacked, which can be far more detrimental for those companies. Because SMBs don’t have as much expendable income as larger corporations, the loss can have deeper, longer-lasting financial repercussions.   Traditional insurers tend to create products that only cater to large corporations both in coverage options and pricing, which has historically left the SMB market significantly underserved and overcharged.  However, the landscape for SMB cyber insurance is changing, and more digital, customizable cyber insurance products are becoming available for a wider variety of businesses.  Running a small business comes with a lot of risk. For example, if a customer were to slip and fall on the floor of a hair salon, they might bring a personal injury lawsuit against the business. If a coffee shop’s espresso machine breaks down, the cost to replace it might be substantial (not to mention lost revenue while the shop couldn’t serve espresso). For an SMB, these kinds of costs can endanger the entire company. It’s far better for companies to err on the side of caution and protect against these risks, and for that, BOP insurance is essential.  BOP insurance exists to protect a company’s assets and operations. By paying a monthly premium, businesses can protect themselves from larger expenses if a covered incident occurs, such as:  BOP insurance policies often have options for additional endorsements such as cyber, that provides basic protection against cyberattacks, or crime in the event of robbery, theft, counterfeit money orders, forgery, or unauthorized credit card use. Depending on what industry the business is in, it could also have industry-specific coverage. For example, a restaurant might add endorsements that would cover losses related to food contamination. A retail store might add an endorsement to cover related costs if one of their products is recalled and must be withdrawn.   Every SMB should have BOP insurance, but what varies is the level of complexity depending on the size of the business. For example, a self-employed freelancer would have different coverage from a medium-sized startup with a hundred employees. The needs of SMBs will be different as well, and the products available to them are unique.  Digital insurtech providers of BOP insurance typically build easier-to-understand products that are made for freelancers and gig economy workers, and can be configured online. These products often aren’t enough for SMBs' needs—they only offer a limited amount of coverage, and often exclude risks that SMBs frequently encounter.  On the other hand, legacy insurance providers of BOP typically build complex products that are too expensive and too complicated to understand without the help and recommendations of a traditional insurance agent. In many cases, the coverages and limits they offer are overkill for SMBs.   Options are more limited for single-location small businesses, but as the insurtech industry expands, more digital-first BOP insurance products are entering the market that cater specifically to the SMB market.  Allegations of employment discrimination, wage disputes, and sexual harassment are only a few of the issues that can spark a lawsuit, and all are expensive to defend against.  In 2022 alone, workplace settlements cost companies nearly $2 billion combined. From big corporations to start-ups, a workplace lawsuit can be a major financial liability. Even if a company has done nothing wrong, the cost of legal defense can endanger the entire business, and cost thousands, if not millions, of dollars.  Management liability insurance is a collection of coverages designed to mitigate the cost of lawsuits against the company—specifically related to upper management. That means that if the company is sued, the insurance may cover legal fees, settlements, and other related costs. The three most common coverages included in management liability insurance all cover a different type of lawsuit:  Some management liability packages may also include non-lawsuit-related coverages, such as a type of crime insurance that covers kidnapping for ransom and other specific crimes against a company’s senior management. Any business with a management or leadership team should have management liability insurance. Companies with a C-suite, board of directors, or strategic investor partners could benefit from the protection that management liability offers. What SMB management liability insurance products are available?  The small to medium businesses that are most likely to need management liability insurance are startups. However, this market often has a difficult time finding a suitable policy.  Because most available management liability insurance products were created for larger companies, these products evaluate the level of risk associated with the business based on things like how long the company has been in business, how many employees they have, and their revenue numbers. Since startups often have little or no revenue and relatively limited business history, these kinds of underwriting factors often lead to startups being flagged as very high risk. When a company is flagged as high-risk, they will either be denied coverage altogether or, if they do get approved, the policy they are offered may be extremely expensive. Many startups simply can’t afford it.  A secondary challenge is how coverages are sold. It can be difficult for startups to understand what coverages they need because most distributors sell D&O, EPL, and Fiduciary coverages as separate products without a clear explanation of how they work together. This can be a barrier for these businesses getting the protection they actually need. However, there are management liability insurance products on the market that cater specifically to startups. These products package the three coverages as a unit so they are easier to understand, and they use alternative datasets to better evaluate startup risks. That being said, it’s important for startups—and companies that cater to startups—to do their research and find a product that fits their business.  Parental leave is the third most requested benefit for US workers, but according to the Bureau of Labor Statistics, only 23% of privately employed U.S. workers had access to paid parental leave benefits in 2021.  In the absence of a national parental leave solution, it’s up to the private sector to find ways to support new parents in the workforce. Some companies offer self-funded paid leave to employees, but for many SMBs, this can be prohibitively expensive.  Parental leave insurance is a business insurance innovation designed to make parental leave affordable specifically for SMBs. The company chooses a package that covers the kind of leave they want to offer their employees, including factors such as what percentage of their employee’s salary to pay during leave, and how long employees can take leave.  Once the policy is customized and purchased, the SMB simply pays the insurance provider a recurring premium based on their selected benefits and employee demographics. When a covered employee takes parental leave, the company files a claim through their insurance provider’s claims process. Then the company will be reimbursed for the cost of paying the employee during the covered leave period, up to the contracted amount.  Every SMB can and should offer parental leave insurance. It is an important benefit for employee acquisition, retention, and overall satisfaction. It’s a solution that mitigates the large, unexpected leave costs that often prevent SMBs from being able to offer this benefit. With a parental leave insurance product, the employer can avoid unexpected costs by paying a regular premium, and they can rest easy knowing their insurance policy will protect them. Boost’s parental leave insurance is a first-of-its-kind product and is currently the only parental leave product on the market. It is specifically designed for SMBs and fills an important gap in the market.  Seeing as there is no national parental leave program or solution, the other options for parental leave include short-term disability, a combination of state-funded parental leave and PTO, and the Family and Medical Leave Act, which legally gives 12 weeks of protected, unpaid parental leave wherein the parent cannot lose their job during that time. However, most people cannot afford to go 12 weeks without pay. In short, parental leave insurance is a great option for SMBs who are looking to provide an equitable solution to their employees.  All businesses need protection against unexpected financial loss, and SMBs are no exception. When something does go wrong, the right insurance products can be a crucial support for SMBs getting back to business as usual. If you cater to small to medium businesses and want to learn more about how you can grow your revenue by offering insurance—including but not limited to cyber, BOP, management liability, and parental leave— contact us, or dive into building your insurance program with Boost Launchpad. 

There are multiple ways to approach and sell embedded insurance, but the most effective approach is white-labeling. Not only is white label insurance the fastest and most cost-effective option, but it also keeps the insurance under your brand, expands your product offerings (and potential customer pool), and creates more points of sale with your customers which leads to higher retention rates. A white-label insurance product is one that’s been developed by one company, then rebranded and sold by other companies. White-label insurance can be used by insurance companies and insurtechs whose primary business is to cross-sell a variety of insurance products, or it can be used by non-insurance companies as an additional stream of income. An easy way to understand the concept of white-labeling is to consider white-labeled products that exist outside of the insurance world. For example, consider the Costco brand: Kirkland Signature. When you see food, paper towels, denim jeans, and various other items sold under the Kirkland Signature logo, you probably don’t think about the fact that they were most likely not produced by Costco itself. In most cases, they were manufactured in various factories by various companies, white-labeled, and then sold under the Kirkland Signature brand. The same can be done with insurance. A white-label, embedded insurance product is one that is completely integrated not only into your website so that your customers don’t have to leave your website in order to make a purchase, but it’s also integrated into your brand. Customers will have no indication that the product was not created by your company.  When it comes to the question of “white-label or build from scratch?” there are several benefits to white-labeling insurance products– namely, it will save you time, labor, and money.  In order to build an insurance product yourself, you would need to get licensed as an insurance agency, fulfill the requirements to become a Managing General Agency (MGA), create your insurance forms, rates, and underwriting guidelines, get a carrier to provide capital backing for your product, be appointed as a producer/agent broker by that insurance carrier, build technology to sell your product through your website, and finally create or outsource claims administration capability. And that is telling a long story short. All in all, you would be looking at a multi-year timeline. Building an insurance product from scratch would not only be lengthy and complex, but it would also be a considerable financial investment with long-term, ongoing expenses and maintenance required. Instead of hiring an internal engineering team, educating yourself on each state’s insurance regulations, requirements, and laws, and navigating the complicated process in-house, you can outsource that labor to a company that has already done that work for you. Without losing any of the benefits of adding an insurance product to your business, you can save yourself time, money, and effort.  Besides building from scratch, you could potentially work with an affinity insurance partner, where you would redirect your customers to the insurance provider’s website to buy the insurance product from them, but there are several downsides to that kind of partnership. First, you wouldn’t have the benefit of a trusted customer experience with your brand. In affinity partnerships, after your customers click through to your provider’s website, you lose ownership over customer relationships or brand management. Additionally, affinity partnerships primarily generate leads for the insurance provider, not for you.  White-labeling insurance can benefit both non-insurance companies who want to start offering embedded insurance, and insurtechs looking to add or expand their offerings. We’ll look at both scenarios below. For a non-insurance company, the benefits of adding white-label insurance to your offerings include increased revenue, greater customer engagement and retention, and competitor differentiation. White-labeled, embedded insurance is a big opportunity for your non-insurance business to build new streams of recurring revenue. In 2021 alone, the insurance market amassed over $700B in gross written premium, and that number is only projected to grow. 60% of consumers are looking to buy insurance from new entrants, which means that there’s never been a better time for companies outside the traditional insurance industry to enter the market. If your business could tap into even just a fraction of the insurance market value, it could lead to significant revenue.  Additionally, insurance premiums are recurring revenue, which creates lifetime customers, rather than one-time purchasers. When your customers purchase insurance through your website, they buy the policy directly from you, you collect the premium payments, and your business profits from the recurring income. And because the transaction will take place on your site or app, you will have full ownership over your customer experience and data, which helps you to better sell to them in the future. Following that train of thought is customer retention and experience. Insurance is a very “sticky” product with an average 84% customer retention rate. An important point to remember with embedded, white-label insurance is that you are not selling to new customers. You would be selling to the same audience with whom you’ve already invested effort and acquisition costs. White-label insurance gives you the opportunity to connect with your customers on a new level.  Let’s say that you own a company that sells goods or services to pet owners, and you are looking for a way to deepen your customer relationships while increasing revenue. You can leverage your existing customer relationships to sell them pet insurance. As a non-insurance company, you would be able to white-label and embed the product directly into your website. Without ever having to leave your website, your customers can add insurance to their existing purchases. Because you have already done the hard work of building a positive, trusting relationship with your customers, the addition of this new, beneficial protection that they know they can trust can only increase their brand loyalty. White-labeling an insurance product is a great way to set your company apart from competitors within your industry and also from competitors in the insurance market.  As a different example, let’s say that you own a company that caters to pet owners and you take the initiative to sell pet insurance alongside your other products. Because pet insurance is still relatively new in the US, some of your customers may not even be aware that it’s an option. By offering it to them, you demonstrate that your company is forward-thinking and ahead of the competition. You can anticipate your customers’ needs and solve legitimate problems that they face as pet owners.  By selling insurance, you will also be entering a new market, which may sound intimidating if you are not familiar with the insurance industry. However, the good news is that you have an edge in that market too. Customers are far more likely to purchase from a company that they are already familiar with and trust than one that they’ve never worked with before. Because you would be selling to customers with whom you already have a relationship, you would have an advantage over traditional insurance providers marketing similar products.  For an insurtech, the benefits of white-labeling insurance include access to insurance capacity, a much faster GTM rate, and the ability to focus on serving your customer instead of reinventing the wheel. If you choose to white-label, you would have access to your partner’s insurance capacity. This is the maximum amount of value that an insurance program can insure, determined by the amount of capital available to cover its losses. Capacity can be difficult for many insurtechs to come by. The most practical option is to partner with an insurer or reinsurer who can provide what they need, but securing those partnerships can be challenging. This is especially true for insurtechs without established connections to insurance carriers. Getting in front of the right people at a carrier company and convincing them to provide the needed capacity can be a years-long process (which often ends in failure). As previously stated, building an insurance product from scratch is a long, complicated process. Partnering with a white-label insurance partner cuts all of that work and extra cost down so that you can get to market faster.  You could also partner with an insurance-as-a-service provider who would provide everything you would need to start offering insurance to their customers from technology to insurance capacity, operational infrastructure, regulatory approvals, and the embedded product itself. Insurance-as-a-service partners make the process even more streamlined and worthwhile. For example, if you were to work with Boost, an insurance-as-a-service company, instead of wading through a multi-year process to build a product yourself, you would experience a full-service partnership and get to market in as little as one month. Customers want convenience. Instead of getting every kind of insurance from a different provider, you can become a one-stop shop for their insurance needs.  An important aspect of customer engagement and retention for insurtechs is the ability to cross-sell. You need a variety of products that complement each other to encourage customers to buy more than one policy. If you work with a white-label insurance provider like Boost, you would have access to a wide variety of already-built products to choose from, so you can choose products that align with your business goals. You can simply select products that would cross-sell well with your existing lineup.   The more products, the more points of sale, and the stickier your customers. By engaging with them through multiple policies, your retention will naturally increase.   You don’t need to reinvent the wheel in order to sell a great insurance product that will appeal to your customers. In fact, it is much faster and more cost-effective not to. Whether you are a non-insurance business or an insurtech looking to expand its product lineup, white-labeling allows you to outsource the difficult, lengthy aspects of building an insurance product so you can focus on what really matters: growing your revenue, increasing engagement and retention, and setting yourself apart. If you want to learn more about growing your revenue with white-labeled insurance through Boost, contact us, or dive into building your insurance program with Boost’s Launchpad.

Embedded insurance growing in popularity and interest in the digital insurance space and is a huge revenue growth opportunity. However, for businesses outside of the insurance industry, it’s not always clear what embedded insurance actually means. We’ll go over what embedded insurance is, how it works, and why it matters for your business.  “Embedded insurance” gets its name from being embedded into an existing purchasing experience, allowing customers to buy digital insurance without requiring them to go elsewhere to complete the transaction.  This is part of a growing trend of “embedded finance,” wherein customers are able to buy, sell, access credit, and interact with their bank through the platforms of non-financial companies. If you’ve ever ordered something from an app and paid for it without leaving the app experience, you’ve used embedded finance. Embedded insurance has a similar function and addresses many of the inconveniences that a consumer might face in a more traditional insurance-buying process. Typically, buying traditional insurance includes numerous disjointed, repetitive steps, such as navigating multiple websites, submitting documents multiple times, and even offline components, like calling an agent or faxing in forms.  In contrast, embedded insurance is available to buy when and where the customer needs it - usually when they’re making a related purchase. Rather than having to bounce between separate providers or experiences, embedded insurance allows customers to easily provide their information, get a quote, and receive their policy right from the website or app of the business they’re already transacting with. This ultimately makes the digital insurance purchase process easier for both the business and the customer. If you’ve ever bought a plane ticket online, you have probably been offered a protection plan or travel insurance policy as part of the checkout process. That's an example of a real-life embedded insurance product. Without leaving the airline’s purchase flow, you can buy insurance as part of the same transaction as your tickets. By simply checking a box, the price is added to your total cost, your trip is protected, and you’re sent an email with details on how to file a claim. That’s the convenience of embedded insurance for consumers. Travel insurance is a common example that many people have encountered in their daily lives, but embedded insurance is actually on the rise across a variety of industries, including both B2B and B2C. Regardless of the type of business offering embedded insurance, the process is very similar: the customer is offered a way to seamlessly buy the insurance, at a time they’re likely to be interested.  Here’s another example, for a very different business type. Let’s say John owns a certain amount of cryptocurrency, which he stores in a digital wallet on an exchange. With crypto theft increasing and few protection options available for the average consumer, John is rightfully concerned about the safety of his digital crypto wallet. One day, while John is checking his balance on the exchange website, he gets a pop-up notification about new crypto insurance coverage. He clicks on the pop-up and is taken to a product page within the same exchange website. He fills out a form, makes his first premium payment, and goes back to checking crypto prices.  The whole process takes him less than ten minutes, and now John’s crypto wallet is protected with the coverage that he needs in case of a breach. Meanwhile, the exchange has collected John’s customer data, set up recurring payments, and built a deeper customer relationship.  If you’re looking for ways to increase your revenue and/or deepen your customer relationships, offering embedded insurance as a complement to your existing products or services is a great business opportunity. You may not be selling plane tickets or crypto, but chances are you’re offering something that could be protected by insurance.  If your company caters to pet owners, you could offer white-label pet insurance, and help your customers protect their pets’ health when they’re already making a pet-related purchase. If you manage a cryptocurrency exchange platform, you could offer crypto wallet insurance to help your retail clients enhance the safety of their digital assets. If you provide HR services to SMEs, you could offer parental leave insurance to help your clients affordably offer this highly desirable benefit, while you’re already helping your clients set up their benefits packages. The options are plentiful.   The greatest advantage that embedded insurance offers to your customers is convenience—they can easily get the protection they need for just a slight extra cost, and no extra effort.  The greatest advantage that embedded insurance offers to you is that it works to grow your revenue. By offering your customers a quick, easy, and beneficial product, you can tap into a new stream of revenue. And, by applying your knowledge of your customers’ needs and purchasing behaviors, you can get ahead of their concerns, offer them a valuable solution, and ultimately, increase their brand loyalty. While there are multiple ways to approach embedded insurance, the fast and most cost-effective approach is usually white-labeling insurance products. The concept of “white-labeling” is not unique to embedded insurance. A white-label product is a product or service that is manufactured by one company and then rebranded and sold by other companies.  For example, when you see food items sold with the Trader Joe’s logo on them, those products were most likely not produced by Trader Joe’s. They were white-labeled and then sold under the Trader Joe’s brand.  The reason for white labeling is that it saves the company a lot of work. Instead of Trader Joe’s having to produce every frozen spring roll themselves, own vineyards to source each bottle of wine, and employ all the people involved in manufacturing each product, they outsource that work to companies that specialize in producing those things, then white-label and sell the products that those other companies create for them. With white-label insurance, the same idea applies. It’s theoretically possible for a company to build its own insurance product, but in most cases, it makes more sense to outsource that labor. Developing an insurance product is a complicated, expensive, and lengthy process with different legal requirements in each state. Instead of trying to take that on yourself, you could work with a company like Boost, who’s already done that work for you. If you want to learn more about growing your revenue with white-labeled, embedded insurance through Boost, contact us, or dive into building your insurance program with Boost Launchpad.