$100m insurtech fund wants to work with insurers not against

A $100m venture capital fund focussed soley on insurance and insurtech has been launched with the aim of partnering the start-ups to insurer needs.

Eos Venture Partners is raising its fund EVP I from reinsurers, insurers and brokers, who are looking to benefit from a close strategic partnership with Eos to drive their innovation strategy. Eos is targeting a first close at $50m and a second close at $100m. The fund would be capped at $150m.

So far two limited partners have already put money down – a global insurer committing $20m to the fund, and a European insurer committing $10m.

Sam Evans, one of three general partners at Eos, says talks are being finalised for a further $40m investment to be confirmed in the next six to eight weeks, with further potential investments highlighted through other insurers. Eos are looking for an optimum number of 10 limited partners to work with on their innovative solution needs.

Evans said: “Insurers are conservative in their thought process and it can take a long time for them to get their heads around a new business model and implementing it within the constraints of a traditional insurance model can be very slow and challenging.

“We’ve faced similar challenges with getting insurers on board, but what’s positive is that we have observed this dynamic starting to change. Insurers that were previously just paying lip service to innovation now realise that that’s not sustainable. This isn’t a trend or passing fad, this is significant. New technology is having a major impact on how business is being done and will be done moving forward. It’s not sustainable to sit on the sidelines anymore and I think we are certainly seeing an increase in pace, awareness and understanding of insurtech certainly among the big carriers that we are talking to.”

Eos will use the fund to invest in 12-15 areas of insurance, where insurtech start-ups could offer improved ways of working. Multiple start-ups could receive the investment and support that Eos are offering as part of each area, with Evans saying the company takes a holistic approach to finding the best solution to each theme.

Eos formed in 2016 has offices in London and the US and has already made eight insurtech investments. Evans describes the group as “hands-on investors” who have helped the start-ups build commercial relations, which has in turn led to further investment.

The firm was inspired by the burst in growth taking place in the insurtech sector over the last few years, and Evans says he, alongside his fellow general partners Jonathan Kalman and Carl-Georg Bauer-Schlichtegroll, carefully choose which insurtech enterprises to invest in through a thesis-driven approach based on the potential for profit pools to migrate and further innovation over the next 3-5 years.

The three partners all have significant insurance experience, and Evans added: “We’ve looked around and rather than be reactive to the market we’ve taken a proactive approach. We are looking to go deep into a small number of verticals where we have an understanding of the issues, challenges, priorities and problems and then we go into the market to find the solution.”