SafetyNet, a Madison, Wisconsin-based insurance tech startup, is hoping to solve a problem that plagues nearly half of all Americans.
“A Fed[eral Reserve] report said that almost half of Americans can’t afford to pay a $400 surprise expense,” said Mark Greene, Director of Innovation at SafetyNet. “Other stats say more than half of Americans don’t have $1000 in their savings account. There’s something we can do about this.”
The team at SafetyNet talked to thousands of people across the country and asked them about their financial security to find out how they get through hardships when it comes to money. They used that survey data to craft an insurance product that they felt people would actually want.
“Our first iteration is an insurance product that covers job loss and disability and it does it in a way that is unlike anything that’s in the market right now,” said Greene.
But how is this different from a traditional insurance policy?
“What we developed is something that offers an immediate infusion of cash if somebody loses their job or is disabled and unable to work for 30 days,” said Greene. “We pay [policyholders] upon notification of their injury or them being laid off work. Our promise is to pay within 48 hours.”
Greene said other insurance products tend to be slow, only paying disability if the claimant has been out of work for 6 months. Other policies are usually offered through an employer and are lost when a job is lost. SafetyNet policies are sold directly to consumers online with low premiums ranging from $5 to $30 a month.
“That pays someone between $1500 and $9000 in a lump sum payment. The consumers choose that,” said Greene. “In talking to people all across the country, they didn’t really feel that they had any options to cover them. […] We’re letting the consumers chose the benefits they need based on their situation.”
Right now SafetyNet is focused on enhancing their insurance product, but their larger focus is on solving America’s income security problem at large with products to help with things like savings accounts, credit, rent and student loans.
“We’re thinking bigger about what the needs are and how we get to the root cause of some of these problems,” said Greene. “We’re an innovation lab at heart. We’re trying to innovate and create solutions for people as they need them.”
Every Tuesday SafetyNet’s staff spends a full day talking to consumers. They bring in potential and current customers and ask them for input on the insurance plan, then put the feedback to use.
“We change the product based on their needs,” said Greene. “That’s our philosophy, meeting the needs of consumers and meeting the consumer where they are. Consumers are driving the way that we build and design this product.”
SafetyNet started at the end of 2015 when the company entered the data gathering process and launched their first product in mid-2016. SafetyNet itself may be young, but they’re positioned under CUNA Mutual Group allowing them to take advantage of the company’s experience in the market.
Greene said they’re disrupting their own industry with a startup mentality.
“We’re capitalized by CUNA Mutual […] so we have a stable backing and a stable background,” said Greene. “While we’re thinking and operating like a startup, we have the data, the expertise and the regulatory relationships of a large company.”
Currently, SafetyNet is available in Wisconsin and Iowa. Greene said they’re looking to expand into 4 more states by the end of the year and hopefully all 50 states within 5 to 10 years.
“What’s important for us now is learning about what the consumer needs. That’s more important to us than selling a ton of policies,” said Greene. “What we really want to do is make sure that we’re laser focused on those solutions and finding out if this product is meeting consumers’ needs.”
Christine McGuigan is the Associate Editor of Silicon Prairie News.