The Future of Insurance Podcast – Ian White, Former Co-Founder & CEO, Koffie Financial

The Future of Insurance Podcast – Ian White

Co-Founder & Former CEO, Koffie Financial

Season 6, Episode 8, July 23, 2024

Guest Bio

Ian is the co-founder and CEO of Koffie Financial, a finsurtech platform purpose-built for the trucking and transportation industry. With insurance at its core, Koffie’s instant and transparent financial services empower truckers with the modern tools and technology necessary to drive efficiency and safety. He is an entrepreneurial leader at the intersection of data, enterprise markets and geospatial analysis.

Previously Ian served as founder/CEO of Urban Mapping, a web-based mapping platform he sold to Pitney Bowes in 2015. Customers included Tableau Software, Google, Microsoft, Apple, Facebook, Kayak, IAC, CoStar Group.

He has also served in a senior role at a startup that acted as outsourced research for the financial services industry, focusing on alternative data to generate alpha for hedge funds.

Highlights from the Show

Ian has been a serial entrepreneur, including working in the mapping space and how powerful the meta data about locations, and how critical it is to have accuracy in the data
He went on to work on catastrophe exposures, with a specific focus on how geology impacts earthquake losses, which gave him more exposure to managing risk and the impact of loss
He was drawn to insurance after a stint offering data to hedge funds because it wasn’t as ‘I win, you lose’ as hedge funds where insurers doing worse means they’re helping others
Koffie was founded initially to look at the difference in trucking equipment, and how that impacts losses
- Trucking insurance does not factor vehicle details into the rate, which seemed so hard to believe, so Ian wanted to resolve that, and found that vehicle details lead to a 4x lift in risk performance
- Because there was no ability in existing Trucking insurance products or rating models to act on this data, they realized they needed to start an MGA to offer insurance themselves
They found that midsize and large risks were self-insuring and forming captives because insurers weren’t meeting their needs, but small trucking firms (under 100 tractors) can’t afford to do that, so Koffie focused on the smaller-end of the market
After a year and half, they got capacity in place, required telematics for insureds (first dedicated equipment, and later with an iPhone app)
- They had fully-subsidized telematics, a fleet-safety team, and data monitoring to catch riskier behavior while it was happening rather than just at renewal
- Their telematics data was built into police reports so there wouldn’t be the risk that the plaintiff’s bar would tell whatever story they want about what happened
- They started to move Claims in-house
While this was all positive, the business ultimately didn’t survive, and was sold to Acrisure in early 2024
Ian learned first hand something he calls the “InsurTech Paradox”
- Venture backing mandates that you grow at very high rates (100-200% or higher)
- In underwriting, the faster you grow, the worse your results are
- These two things are at odds, so if you grow fast enough for your investors, your capacity providers will be concerned and stop backing you; if you grow slow enough for your capacity, your investors will be concerned and stop backing you
- Koffie was growing at 30-40%, intentionally, which was not enough for their investors
- Vestoo collapsed at the same time, making capacity providers unsettled
- All of this came together to create a cash crunch with a fund raising effort that wasn’t moving fast enough to save them, so they sold company assets to Acrisure
Ian thinks, while we’ll see a return of funding, it won’t return to the situation where there are huge checks being written
He also wonders about whether insurance should be incenting better behavior, even if it means the business that’s insured doesn’t work that day
- For example, paying trucking companies not to try to drive in the midst of an ice storm, even though it means goods won’t be delivered (or not on time), but huge accidents and the societal losses that comes with them could be avoided

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This episode is brought to you by The Future of Insurance book series, part of the Future of Insurance thought leadership series (future-of-insurance.com) from Bryan Falchuk.