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The
New York launch pushes the Brooklyn-based Fabric Insurance
Agency, LLC, which also sells term-life coverage, into the life
insurance industry's second-largest U.S. market.
Life insurers, which often sell health insurance and annuities
as well, collected $48 billion in premiums in New York during
2015, second only to California, where they collected $64
billion, according to the American Council of Life Insurers, a
Washington-based trade group.
Fabric, whose policies are issued by Vantis Life Insurance
Company, a Pennsylvania-based unit of Penn Mutual Life Insurance
Co [PMLIC.UL], is among a wave of tech-driven insurance startups
that are trying to upend the often lengthy, traditional process
for buying insurance policies.
"It's a big problem in a massive industry that hasn't seen any
innovation in decades," said Fabric Chief Executive Officer and
co-founder Adam Erlebacher.
The startups, known as "fintech" or "insurtech" ventures,
typically leverage technology, such as cloud data storage or
smartphones, to provide cheap and easy-to-access services such
as loans, insurance, payments, money transfers and stock
trading.
Lemonade Inc, another fintech company that promises renters and
homeowners insurance in as little as 90 seconds and payment of
claims in 3 minutes, on May 9 won approval from California
regulators to sell policies in the state.
Fabric, now operating in 38 states and Washington, D.C.,
promises parents two-minute approval for accidental death
coverage, which it says is the biggest risk for individuals
between ages 25 to 44. Premiums start at $6 per month for a
$100,000 policy.
Customers can then upgrade to a 20-year term life insurance
policy, which they apply for online and schedule medical
testing.
Fabric's investors include Bessemer Venture Partners, Box Group
and Maveron, according to its website.
The idea for Fabric as Erlebacher bought his first life
insurance policy when his son was two, after procrastinating, as
many parents do, he said. Erlebacher, a former executive for
Simple, a digital bank and BBVA unit, filled in an online form
and completed paperwork with an agent, who pushed additional
products, he said.
The coverage became valid ten weeks later, Erlebacher said.
(Reporting by Suzanne Barlyn, editing by G Crosse)
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