A Q&A With Boston-based Insurtech Quilt And Its Quest For Radical Simplicity In Insurance

In our continuing effort to profile the insurtech start-ups in and around Boston, our next interview is with the online insurance platform Quilt.

Agency Checklists had the opportunity to chat with Blair Baldwin, one of the four co-founders and present CEO of Quilt to find out more about Quilt’s business model  and why it is considered one of the area’s most promising insurtech start-ups.

Blair, thank you for taking the time to talk to us. Could you tell us what exactly is “Quilt” and how did it get its start?

The four co-founders of Quilt came together with the idea of a family of Quilt-branded insurance products specifically targeted at younger customers, the millennial demographic, if you will.

We spent a lot of time researching that audience and developed a product road map that fits the key gaps in their needs and lives…and so what we are doing with Quilt is we are creating online-only products. Everything we offer is self-serve and mobile first mirroring how our audience lives their lives.

All of our products can be bought from your phone but without actually talking to an agent.

So simplicity is key for Quilt then?

A strict guiding principle is radical simplicity. Our products are as simplified as possible and easy to use and understand.

Could you tell us more about Quilt and its co-founders?

Quilt really started a little over a year ago as a mix of four co-founders coming together, partially from the world of insurance and also from the world of online marketing.

Prior to Quilt, I was the CMO over at Goji, one of the large, online auto-insurance agencies.

Our second co-founder is Hal Schwartz, who also comes from Goji. He was the general counsel at Goji and was also the general counsel for a large healthcare startup called Best Doctors prior to Goji. He has also was a partner at a big, global law firm before that. We felt, being in insurance, that actually having a full-time in house general counsel is really pretty important.

The third co-founder is a guy by the name of Lee Hower, who is a partner at Nextview Ventures, one of the really successful seed venture firms here in Boston. Lee comes from a background in financial services. He was one of the early PayPal employees and is also has extensive expertise in scaling and building really successful online businesses. After Paypal, he became one of the co-founders of LinkedIn.

The fourth co-founder is Jim Fini. Jim founded a company called Enservio about 10 years ago. Based in Needham, Enservio is a large, claims management, big data platform that services  large carriers.

Are you from Boston? Is that how you started here?

I’m originally from New York but I moved to Boston for college. I went to Harvard both for undergrad and for business school and really have loved it. I have stayed here ever since so I’ve now been living here, I guess, 17 years.

I accidentally fell into the world of insurance … Something I mentioned is I worked in a variety of roles, consulting, digital marketing and digital products design. I ended up doing what started off as a small consulting project for Goji, who previously was Consumers United. I just thought the business was so interesting that I joined full-time. We had built their data science team and ended up running their product marketing and data teams as a CMO. That’s what got me into the world of insurance.

And you saw the possibilities within the insurance industry?

Yes. Everybody who touches insurance, especially with a digital perspective, sees that the possibilities are huge because people really do live their lives online right now and increasingly on their phone. There is a disconnect between that and how insurance products are bought and used. That disconnect just brings so much opportunity and possibility.

So what is the actual workflow of the start-up right now?

In terms of how we work, right now we are an agency that is doing, I would say, an expanded set of activities. More than what a typical agency would do. By that I mean, we are working with our carrier partners on product design. We are also collecting payments. Quilt customers use their credit card for a monthly recurring payment that Quilt collects and then passes along to our partners. We’re handling activities that typically the agency wouldn’t handle such as most of the claims work on the renter’s side. That’s us in a nutshell: mobile-first, millennial focused suite of Quilt branded products.

Have you launched yet? What markets is Quilt presently offering products in?

We started with renter’s insurance in Florida. That launched late summer and we will be increasing our state footprint for renter’s insurance pretty quickly. We should be actually up and running in late Q1. As for life insurance, we are currently selling in 6 states. It’s Florida, Texas, South Carolina, Colorado, Virginia, and Alabama. Starting with Q2, we’ll be quickly expanding nationally with that product line.

What about Massachusetts?

We are cautiously optimistic that we’ll be able to launch in Mass. in late March… We’re pretty close. As for life insurance, it will go live in Massachusetts in late spring.

How are you getting yourself noticed? How are you marketing to consumers?

It’s all digital. It varies a little bit by channel. For renter’s insurance, we’re heavily focused on traditional digital channels like paid search, the lead-generation channels, mainly because the lifetime value is fairly low for renter’s customers. It limits the types of marketing you can do. We’re much more creative when it comes to life insurance. It’s where you’ll feel a lot of our action in terms of Facebook and other social media. We’re also starting to do some experimental marketing in other channels.

How has the response been thus far?

It’s very, very early days still…We only launched our life insurance product just recently.

Who are you writing through?

For renter’s insurance in Florida, it’s Security First, which is, I would say, a large, regional carrier. I believe they are the 3rd largest homeowner’s carrier in Florida. As for the life insurance product line, I really can’t talk about who’s underwriting it. Although it is visible on the site, it just hasn’t been publicly announced.

So what is your vision for the company as of today?

The vision has really become a one-stop shop for our target audience and cover all of their insurance needs. That’s way out there because that would include basically all lines except for health insurance. Near term, we want to cover the products offerings we’ve identified as the lowest adoption but highest need. That’s how we landed on our road map, which is also to say why something like auto isn’t on our list because it’s high usage, high adoption. In general, we are explicitly going after non-consumers of insurance and selling non-consumers on their first suite of insurance products.

A lot of Agency Checklists’ readers happen to be agents and agency company people. What are your thoughts about independent agents? Do you feel like they should be replaced completely or do you think there’s enough room for everyone?

It’s a great question. The way I look at the world there is absolutely a place for traditional insurance agents. There are many products that are really complicated and situations that are complicated and so they really need an in-depth, expert, consultative process to help them work through all the nuances and to get the right policy.

For us at Quilt, one of the reasons we are targeting a younger audience is that their needs and their lives tend to be pretty simple. Young people don’t have very many assets, if any, and they have really, really simple needs and because of that they should have simple products. Also their premiums tend to be very low in almost every type of insurance. What that means is, as a segment, they are a little bit misaligned, in my view at least, with traditional insurance agents.

If you take a product line like renter’s insurance, the premiums are so low that it almost doesn’t make sense for a traditional agent to sell that product line on a stand-alone basis. If it is bundled with auto, then it may make sense. In a way, we are filling a gap in both the economics and the user experience that do not really make sense for traditional agents.

Actually life insurance is another good example. If you’re young, the premiums you’re going to pay are also very small, especially if you’re buying a term life insurance policy. The incentive for agents to sell that and to market to young people is actually not really there. There’s almost an incentive misalignment, which is why the audience has never really been aggressively marketed to. I see us as filling a gap in the market versus replacing traditional agents.

And is Quilt licensed as an agency?

We are. Then we have a few other licenses as appropriate. So for renters, as I think I mentioned, we are doing some claims work so we have licensed adjusters on the team. We are licensed in all the states that where we are selling.  Also, all of Quilt’s employees, even though literally none of them are insurance agents and even though they come from various backgrounds in technology and digital marketing, are all now licensed so that they understand the products and can actually talk to customers.

It seems like you really have a clear picture going forward and that you have found a niche.

Totally unique. There is not anybody else that is really doing what we are doing. We are definitely not a comparison site, which is where you see a lot the startups, where they’re just showing estimated rates and then you get passed off to a call center.

Our vision is we’re creating our own branded products. Even the actual application we filed, is as consistent as possible. So instead of seeing it’s just a standard application, we’ve actually filed, at least in Florida … because that’s where we’re currently offering renter’s insurance … our own branded application. It’s on our carrier’s paper but it’s in our fonts and color palettes so the customer experience is as consistent as possible from purchase, payments and claims.