So, it is fair to say I was interested in hearing what he had to say. I am always excited to meet founders with deep knowledge and long term experience in, and a passion for, their industry. Yes, passion for life insurance, which Brett seemed to have in abundance. His thorough understanding of the challenges faced by the life insurance industry, combined with his dedication to find a solution that benefits customers, agents, and insurers alike was evident and it meant that we could happily tick the founder box.
Our second investment criteria, that a product or service should solve a real problem, took little to demonstrate to me after my own frustrations in acquiring my own life cover.
It is no news to anyone following the royal commission into financial services that the life insurance industry is subject to complex regulations and opaque underwriting processes that lead to inefficiencies and costs that make writing these policies to those most in need uneconomical.
As I experienced firsthand, traditional methods of policy creation involve manual assessments, paper-based compliance documentation, and lengthy application procedures. These barriers often deter potential policyholders, not to mention advisers, resulting in a significant portion of the population remaining uninsured, contributing to the estimated trillion dollar underinsurance issue in Australia. I must admit I was close to becoming part of this statistic as a result of sheer frustration during my own life insurance journey.
Leveraging their experience and knowledge of the life insurance landscape, Brett and his team at Lifebid, together with senior industry advisers, have built a solution that streamlines the policy issuing process while ensuring that the needs of clients, advisers, and insurance companies are met. The Lifebid platform, a first of its kind, is a comprehensive solution that saves up to 90% of the costs of issuing a life insurance policy, improving accessibility and affordability of cover for everyone. Adding the fact that they have already secured strategic investment from industry experts means box number two was confidently ticked.
The third requirement for us in any investment is market-fit. Can LifeBid sell their platform, and if so, who would the buyers be, and what will they be prepared to pay? For us, this validation was straightforward, as LifeBid created their platform together with the industry.
They set up a senior advisory board early on in the project with representatives from most of the insurance companies, licensees, and financial advisers. They have meticulously followed advice and used feedback to perfect the platform. They have also road tested their MVP (minimum viable product) with industry, which resulted in a waitlist of 2,000 advisers, many licensees and most insurance companies, all keen to start using the system.
Finally, at Stride, we look for scalability in any business. Whilst LifeBid’s Australian business is expected to be large enough for it to become a billion dollar company, their platform can be tailored for life insurance in other countries. Furthermore, LifeBid is perfectly placed to develop their solution into a client-facing consumer app.
There are other reasons we have picked LifeBid from the hundred or so companies we have reviewed in the last five months. Firstly, they are genuine in their intent to make the world a better place through facilitating cover for those who need it most.
Among the most underserved groups in terms of life insurance coverage are those most in need; young families with a single income. These families face the greatest risk should the sole income earner lose their job, become injured or die unexpectedly. However, due to the costs, complexities of the industry and application processes, and lack of awareness, they are often not protected, facing financial burden when they and/or their loved ones need support the most. LifeBid’s founders are passionate about making life, income, and disability coverage accessible to everyone.
Finally, it is easy to get caught in the next wave of exciting technology companies. One day it’s crypto, then AI, or quantum computing. However, for every Amazon there is one (or ten) pets.com that went bankrupt shortly after its much hyped IPO. We love that the LifeBid team is innovating in an underserved industry many would consider boring. Warren Buffett followed the philosophy of ‘boring is beautiful’ when it comes to investing in industries providing products that most people should have over most of their lifetime. Life insurance is certainly one of those boring but beautiful sectors.
For further information including Expressions of Interest please click here.