Interview Published March 14, 2000|
Don Martin, ePolicy
Torrance-based ePolicy is launching its site today, focused on the online small-business and professional insurance market. The company, which has underwriting agreements with Fireman's Fund, Kemper Group, TIG Specialty Insurance, and Interstate Insurance Group, was founded by Donald E. Martin, former president of The Cal-Surance Companies, and Lou A. Kwiker, former president of Bristol Farms, Wherehouse Entertainment, and Handleman Company.
Donald Martin is the Co-Founder, Chairman, and CEO of ePolicy, and answered a few questions about the venture and where it's going.
BK: What is the background behind ePolicy, and what are you looking to do?
DEM: ePolicy is a B2B Internet company that is creating a new way for small businesses and professionals to purchase insurance. We are the first online company to offer complete end-to-end business insurance services. ePolicy is currently rolling out Professional Liability, Business Owner's Policy and Worker's Compensation insurance nationwide. The product line will eventually span an entire suite of products, with specific variations of each on a state-by-state basis.
ePolicy is different from other dot-coms in that company is approaching the market from the inside out. I founded The CalSurance Companies, Inc., one of the top 50 insurance brokers in the nation, more than 30 years ago. With that foundation, ePolicy enjoys an uncommon, long-standing relationship with powerhouse insurance companies such as Fireman's Fund, Kemper, and many others.
BK: How did you decide to start ePolicy, and how long did it take you to start the company?
DEM: As Lou Kwiker (board member of CalSurance and ePolicy COO) and I looked at the insurance market, we realized that there wasn't a way to service the small business and professionals market using traditional methods. There's an unbalanced cost-benefit ratio making it unprofitable for traditional insurance agents to service this market. At the same time, administrative costs keep the premiums out of reach for many small businesses and professionals.
Together, Lou and I identified and removed obstacles that stood in the way of serving this market and identified systems and services to deliver insurance services online that are superior to those available offline.
We founded the company in June 1999 and we've spent our time building the systems ($20 million investment to date and $50 million by the end of the year), signing agreements with top rated insurance carriers such as Fireman's Fund, TIG, Kemper, and CIC, addressing the compliance issues and policy approval requirements of the industry on a state-by-state basis, and building the product line.
BK: Who is your financial backing, and did you have difficulty finding financing for a vertical e-commerce type site?
DEM: Because of my experience in the insurance industry, I was able to contact the CEO of Fireman's Fund (part of the Allianz Group) and received a $6 million loan, interest free for 3 years. We recently completed Series A funding and received $14 million. Funding was provided by ARCH Venture Partners, Allen & Company, Madrona Investment Group, MGN Opportunity Group and other private investors. We're just starting Series B financing now. Rather than having difficulty finding funding, investors have wanted to invest more money than we've wanted to accept at this particular time.
BK: How is this market different from the more traditional insurance market?
DEM: ePolicy is the Internet solution for traditional insurance carriers. For small businesses and professionals, buying insurance through ePolicy is a superior alternative to using traditional methods. EPolicy is:
Easy: fewer questions, simpler language, little user input, expanding to 24x7x365 access via a Web browser, customer service available by phone/e-mail/live chat.
Fast: entire process takes only 5 to 15 minutes, compared to the days or weeks offline purchases require.
Less Expensive: products are typically significantly less expensive than identical policies purchased through traditional channels.
ePolicy is not just another dot-com. It's the first (and so far the only) company to successfully transfer complete end-to-end small business and professional insurance services to the Web. ePolicy has reinvented the way small businesses and professionals buy and manage their insurance needs.
BK: Thanks for the insight!
Copyright (c) 2001 by Benjamin F. Kuo. All rights reserved.
May not be reprinted without permission.