I’m a very pleased to announce our investment in Ladder. Ladder is building a new direct to consumer life insurance company and redeeming an otherwise terrible industry. Term life insurance is, in fact, a very good product. That is if you can get someone to sell it to you without trying to upsell/cross-sell you something you don’t want or need. Term life is a huge market — a $138 B annual market in the United States alone. In lending, personal finance management, and payments we’ve seen huge strides forward in terms of customer experience, andat the same time, millennials have made it clear that they are more than happy to purchase financial services online from new providers. Yet, this hasn’t happened in insurance yet. Ladder is here to change that.
Life insurance is sold offline by paper carrying agents (the average age of an agent is 59-years old). These agents are paid 80–100% of the first year premium and thus are heavily incentivized to push high premium products (whole life policies can 20x more expensive than term life policies). The process can take up to 4-weeks, and requires a trip IN REAL LIFE to lab to give blood and urine to fully underwrite a policy.
Ladder changes all of this. Ladder removes the intense high-pressures sales process entirely, and can FULLY underwrite most polices online in minutes by leveraging a multitude of online data-sources. No need to hand over all of your most sensitive information to a total stranger, sit through a tiresome sales pitch, or wait in line in a grimy diagnostics lab to get pricked and prodded. This is a fully underwritten policy, priced very competitively with the market, and backed by the balance sheet of one of the three largest reinsurers in the world. This is big deal, it’s a step change in customer experience that has never been offered before.
I’m lucky to have gotten to know Jamie, Jeff, Laura and Jack over the past year. I could not be more excited to back such a strong team. At Canaan, we’ve had a lot of success leading series A investments in startups that have changed the shape of financial services: LendingClub, Cardlytics, Orchard, RealtyMogul, amongst others. We’re very excited to work with Ladder to redeem the life insurance industry.