Friday, 24 May 2019
BREAKING NEWS

Quiz-Based Life Insurance Company Now Valued at $450 Million – The Wall Street Journal

Health IQ Chief Executive Munjal Shah at the company’s office in San Diego. Photo: Sandy Huffaker for The Wall Street Journal

The maker of an online quiz that prods marathoners and weightlifters about their exercise habits is the latest beneficiary of Silicon Valley’s ardor for the insurance industry.

Behind the quiz is Health IQ Insurance Services Inc. The firm uses information from individuals’ answers to then offer them discounted life insurance if it determines they live healthy lifestyles. On Wednesday, the firm said it raised $55 million in growth capital from a group of investors, bringing its total capital raised to $140 million.

The deal values the six-year-old company led by Chief Executive Munjal Shah at about $450 million, according to people familiar with the matter.

The Mountain View, Calif.-based startup doesn’t offer insurance directly. Instead, it works with insurance carriers to identify runners, cyclists and other health-conscious individuals that it says have lower risks of early death. Applicants who want to save money on term life insurance policies have to pass Health IQ’s online test of health literacy and prove their fitness level.

The company said that it has written around $21 billion in coverage in the past three years.

Other insurance-focused startups are raising big sums from investors, betting that the future of the industry will be more about slick websites and smartphone apps than brigades of sales agents. Venture capitalists poured $1.57 billion into insurance tech in the first quarter, according to research firm CB Insights. That is double the amount they invested in the same period of 2018.

Big checks are being written to unproven companies in nearly every category of the industry. Prolific startup investor SoftBank Group Corp. led a $300 million investment round in April for Lemonade Insurance Co., which sells renters and homeowners policies online. Clover Health Inc., a San Francisco startup that sells Medicare Advantage health-insurance plans to seniors, raised $500 million in January.

Health IQ Insurance Services quizzes health-conscious individuals such as marathoners, cyclists and weightlifters on their exercise habits, and determines whether to offer discounted life insurance. Photo: Paul Rutherford/Reuters

Health IQ’s investors include specialists in both insurance and software, such as the technology-investing arm of Aquiline Capital Partners and venture-capital firms Greenspring Associates and Andreessen Horowitz.

Aquiline is run by Jeff Greenberg, a longtime insurance executive and the son of former American International Group Inc. CEO Maurice R. “Hank” Greenberg.

Write to Peter Rudegeair at [email protected] and Leslie Scism at [email protected]

Share Your Thoughts

Would you take up running or cycling if it meant you could save money on life insurance? Join the conversation below.

Source: https://www.wsj.com/articles/quiz-based-life-insurance-company-now-valued-at-450-million-11557313201

« »