The Future of Insurance Podcast - Katelyn Johnson, Managing Director, AmFam Ventures (S1E04)

The Future of Insurance Podcast - Katelyn Johnson

Managing Director, American Family Ventures

Season 1, Episode 04, May 18th, 2021

Guest Bio

This episode features Katelyn Johnson, Managing Director, AmFam Ventures Katelyn Johnson is a Managing Director at American Family Ventures, a leader in insurtech venture capital. Katelyn focuses on early stage B2B enterprise solutions in the New York, Boston, and Philadelphia markets. She is an active advocate in the entrepreneurial community, having served as a mentor at TechStars, Harvard Business School, MIT, and MassChallenge. Katelyn is currently serving as Executive Director of the Horn Program VC Council at the University of Delaware. An engineer by training, Katelyn earned a degree in Mechanical Engineering from the University of Delaware and started her career as a medical device engineer before attending Harvard Business School.

Highlights from the Show

AmFam Ventures started in 2012/2013 as a more traditional CVC with a $50m, balance sheet-based fund, with one of their investments being Ring, who was a unicorn
It has evolved since then with their second fund changing from being committed balance sheet funding to a committed pool of capital, with an investment being Bold Penguin, which AmFam recently acquired
Now their third fund includes LPs beyond AmFam with $230m in total funding, which started in 2019
They had seen how they can help AmFam by bringing in new ideas and companies to work with, and benefited from AmFam’s help on assessing and vetting potential investments, and saw value in expanding that to more carriers and lines of business through additional LPs in fund 3
AmFam made decisions early on to give the Ventures team freedom to do what it needs to do regardless of what AmFam itself would find relevant, for example not having to have a contract with part of AmFam to get an investment
Embedded Insurance is a focus for the industry this year, an AFV is putting a lot of focus on Claims
They invest in things that are both core and adjacent to insurance
- Core – brokers, distribution systems
- Adjacent – insurance can use, but it doesn’t have to be only in insurance
An adjacent example is Tire Agent, who sells tires online
- Tires are responsible for a meaningful percent of car accidents, so there’s an insurance tie in here
- But there’s also an opportunity to embed insurance into the sale process
A focus right now is embedded insurance, which AFV was working on in 2015/2016, and what lead to the creation of Clearcover out of AFV
As more InsurTech carriers IPOed, they’re being valued on growth multiple, which is very atypical for insurance
Now there’s a focus on bottomline profitability, so if we can’t control the loss ratio, how can we get leaner on the expense side?