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Founded in 2016 by Karim Jamal and Mark Morissette, both hailing from industry titans like Aviva and Real Matters (which debuted in one of the TSX’s largest tech IPOs), Foxquilt to date has been focused on delivering personalized, efficient solutions for businesses in their search to obtain the right (and economical) insurance coverage from leading carriers and access group purchasing power.
Foxquilt is primed to become a full-service insurance provider in the Canadian and American markets this year. The team has been busy building up their sophisticated platform, innovating technology (including proprietary small business products), and new distribution channels (direct-to-consumer, B2B integrations, and open APIs with select international partners), which they will be launching in the first quarter of 2021 on their own paper across Canada. This means that Foxquilt will have the underwriting authority to price, bind, and issue business insurance policies.
“We pride ourselves in being a technology company first,” Jamal, Foxquilt’s CFO, said about the company’s primary focus. That technological focus is catapulting Foxquilt’s business model in a digital world.
While Foxquilt’s online model predates COVID-19, the pandemic’s disrupting effects have given them a strong foothold in the market as more Canadians are adapting to e-commerce. “We have been able to capitalize on the new and emerging entrants looking to buy insurance for the first time,” he said. Where the COVID-19 pandemic has squeezed, pummelled, and transformed other commercial enterprises, it has helped expedite Foxquilt’s growth plans.
This new paradigm has resulted in changes radically shifting consumer needs and habits, and accelerating the need for many to adopt digital solutions to survive.
Foxquilt’s unique underwriting platform and micro-service architecture help customers find the most suitable coverage at competitive prices by leveraging AI, smart data, and behavioral science to discern the nature of each client’s business and efficiently underwriting its risks. It is this personalized, tailored service that sets the InsurTech company apart from Canada’s legacy insurance big-wigs. Their main products are general liability and professional liability business insurance.
There is a shortage of direct-to-consumer distribution among Canadian InsurTech companies comparable to Foxquilt — and none that are creating their own products (rather, selling off-the-shelf products), according to Jamal. That dearth is what prompted him and Foxquilt CEO Morissette to enter the InsurTech space as a digital broker in the first place. They launched Foxquilt after their experience at Aviva and Real Matters revealed to them that none of the big brokers had products that could be efficiently embedded across insurance platforms to ensure adequate business coverage.
“That was our first light bulb moment. We were aware that the InsurTech scene was bubbling up in 2016. But there was nothing really innovative in the marketplace. It was just aggregators digitizing insurance. Our need at that point was a specific product we could embed that would be insurance as a service. We were taken aback that no one in the marketplace even responded to our ask,” Jamal described.
Their second light bulb moment was precipitated by the proliferation of businesses that don’t fall within traditional SIC codes (Standard Industrial Classification, a system for classifying the industries that companies belong to) and the rise of the gig economy, according to him.
“There are new types of businesses popping up daily that we don’t even have a definition for,” Jamal said. “And people are no longer doing just one gig. They’re managing multiple jobs. We’re seeing clients where they spend four hours a day as a baker baking from home, two hours as a yoga teacher, and the other two hours they drive for Uber. This gig worker would need multiple insurance policies. Why can’t we combine those into one that encompasses all of their operations?”
However, the traditional insurers largely haven’t caught up to the gig economy’s fluid and flexible model of work and its new risk iterations, trailing InsurTechs in serving this growing segment of workers.
There is a gap in the market for all these new businesses that do not fall within outdated definitions of a “business.”
“Internationally there are very big carriers that have caught on and are looking for new InsurTechs that are going to do different things in the distribution space,” Jamal said. Foxquilt has partnered with one such international carrier to help them scale its growth nationally and beyond.
1. Straightforward Distribution
Firstly, Foxquilt’s straightforward distribution: “Let’s say you’re running your own business. It’s actually not easy to obtain insurance. You have to go through a broker, present them with all your information, and then they go to market with your information and come back days or weeks later with several quotes. It’s a broken value chain,” Jamal said.
2. Self-service Platform
2. Secondly, Foxquilt has a self-service platform that doesn’t require entrepreneurs having to call in during “regular” business hours. If a business needs to renew their insurance on a Friday night or requires changes on the fly — for example, to increase their coverage limits or update a mailing address — they can do so with several clicks of buttons through Foxquilt and even have the new certificate of insurance sent to a client directly. “This is huge benefit for those who may not have the time during the nine to five when the brokers are open,” he said.
3. More Personalized, Discerning Pricing
Additionally, their platform allows for more personalized, discerning pricing (instead of a one-size-tries-to-fit-all products across commercial lines) that better meets the needs of micro- and small businesses. Jamal explained: “Many of these legacy insurance companies lump in contractors together: for example, lumping in an electrician with a plumber, roofer, and excavator. All of these are considered contractors to an Aviva. But the overall pool dictates the pricing. Within that set of business, someone like a roofer is way more unprofitable than an electrician, but the roofer is skewing the pricing up for the electrician. What our platform does is discern is what is profitable and what is not. We treat electricians like electricians. That allows the customer to win.”
Foxquilt’s next stop is Canada’s southern neighbour, with a heavily regulated, more competitive, but staggeringly larger market size. Despite there being stark differences in terms of geography and risk compared to Canada, Jamal expects a more or less seamless transition to the U.S. in early spring. The team’s plan is to grow into a global company, launching in multiple markets beyond the borders of North America. They have 30-strong staff and are looking to expand to an additional 40 employees by the end of 2021.
