Plan title, an insurtech startup that works in the title insurance space, announced this morning that it closed a $ 16 million Series B. The new round was led by Forté Ventures. The startup previously raised a Series A of $ 8.5 million in the final weeks of 2019.
While Blueprint is an insurtech startup and therefore fits the neoinsurance cohort we’ve tracked in recent quarters as various group companies have gone public, it’s something else. Blueprint is different from the Roots and MetroMiles and Hippos that debuted through traditional IPOs or SPACs; it is sold mainly to commercial customers and offers a very different product.
Neoinsurance companies that went public in the last year and a half sell to consumers. Blueprint, by contrast, sells to professional groups looking for a better title insurance experience. That means its customer base is not made up of consumers hoping to cover their primary residence, Blueprint CEO Steve Berneman told TechCrunch in an interview.
That means that the company’s marketing activities are different from those of its peers in the consumer-centric cohort and that its loss profile is very different.
Title insurance, Berneman said, has a claims rate of about 1% to 4%, much lower than auto insurance, for example. This means that your risk profile is different and your price is less flexible; There is less rate of loss than squeezing out underwriting for title insurance, so cost and service delivery are even more important than other varieties of insurance.
According to the CEO, the title insurance market in the United States today is comprised of four companies with around 90% market share. And thanks to the rules that require public prices in many states, there is an alignment in the prices of some of the major players. The result of market concentration and effective price harmonization is that Berneman thinks the $ 18 billion title insurance business should really be a $ 10 billion market.
Our call with Blueprint was the first in which a startup discussed shrinking its market.
But the point is reasonable; If the title insurance is priced wrong and Blueprint is sold to corporate clients, chances are it can offer profitable coverage at a lower than market price and grow rapidly in the process. That appears to be the case, as the startup indicates in a statement that it anticipates revenue growth of 400% in 2021 compared to 2020.
That growth rate explains the Nashville-based company’s most recent round and what we assumed was a sharp rise in its valuation.
As part of the announcement of its financing round, Blueprint also revealed that it has purchased Southwest Land Title Insurance Company, an underwriting company. Berneman said that to shrink the title insurance market through more reasonable prices, your business must be complete – that is, write your own coverage and sell it. Otherwise, margins would trickle down both sides of your trades.
Blueprint, similar to Next Insurance, is an initial bet that selling insurance to business clients will turn out to be a lucrative endeavor. Given that consumer-centric neoinsurance providers have seen Wall Street change its tune on its value, it will be interesting to see this more B2B cohort grow and finally debut.