Online Insurer Fabric Launches Life Coverage for New York ParentsOnline Insurer Fabric Launches Life Coverage for New York Parents
Brooklyn-based Fabric Insurance Agency promises new parents accidental death coverage in two minutes.
May 23, 2017
By Suzanne Barlyn
May 23 (Reuters) - Fabric, a web-based insurance agency thatpromises new parents accidental death coverage in two minutes,opened for business in New York on Tuesday following the state'sapproval of its key product, the company said.
The New York launch pushes the Brooklyn-based FabricInsurance Agency, LLC, which also sells term-life coverage, intothe life insurance industry's second-largest U.S. market.
Life insurers, which often sell health insurance andannuities as well, collected $48 billion in premiums in New Yorkduring 2015, second only to California, where they collected $64billion, according to the American Council of Life Insurers, aWashington-based trade group.
Fabric, whose policies are issued by Vantis Life InsuranceCompany, a Pennsylvania-based unit of Penn Mutual Life InsuranceCo, is among a wave of tech-driven insurance startupsthat are trying to upend the often lengthy, traditional processfor buying insurance policies.
"It's a big problem in a massive industry that hasn't seenany innovation in decades," said Fabric Chief Executive Officerand co-founder Adam Erlebacher.
The startups, known as "fintech" or "insurtech" ventures,typically leverage technology, such as cloud data storage orsmartphones, to provide cheap and easy-to-access services suchas loans, insurance, payments, money transfers and stocktrading.
Lemonade Inc, another fintech company that promises rentersand homeowners insurance in as little as 90 seconds and paymentof claims in 3 minutes, on May 9 won approval from Californiaregulators to sell policies in the state.
Fabric, now operating in 38 states and Washington, D.C.,promises parents two-minute approval for accidental deathcoverage, which it says is the biggest risk for individualsbetween ages 25 to 44. Premiums start at $6 per month for a$100,000 policy.
Customers can then upgrade to a 20-year term life insurancepolicy, which they apply for online and schedule medicaltesting.
Fabric's investors include Bessemer Venture Partners, BoxGroup and Maveron, according to its website.
The idea for Fabric as Erlebacher bought his first lifeinsurance policy when his son was two, after procrastinating, asmany parents do, he said.
Erlebacher, a former executive for Simple, a digital bankand BBVA unit, filled in an online form and completedpaperwork with an agent, who pushed additional products, hesaid.
The coverage became valid ten weeks later, Erlebacher said.(Reporting by Suzanne Barlyn, editing by G Crosse)
