The Next Big Thing: Insurtech Metromile To Go Public Via SPAC, Expand Licensing Business

Metromile, an insurance-focused fintech powered by data science and machine learning, on Tuesday, formally announced its intent to go public.

As part of the development, Benzinga chatted with Metromile communications director Rick Chen.

About Metromile: Founded in 2011, Metromile caters to non-traditional car owners, such as those that use transportation services like Uber Technologies Inc. UBER and Lyft Inc. LYFT. The company’s pay-per-mile auto insurance leverages big data and intelligent systems to tailor rates to driver behavior, resulting in lower premiums.

Additionally, the company licenses out its core fraud, underwriting, and AI technology to help insurers automate and digitize their processes.

“At our core, we’re a data science company, and so we’re able to just be more agile and help other insurers kind of see that light,” Chen said.

What Happened: In partnership with INSU Acquisition Corp. II INAQ, a SPAC sponsored by the insurance-focused Cohen & Company Inc. COHN, Metromile announced it will become a publicly listed company that would trade on the Nasdaq exchange under ticker “MLE”.

Lead investors include shareholder Mark Cuban, as well as Social Capital, led by Chamath Palihapitiya, which tweeted earlier that the insurtech is disrupting car insurance.

Why It Matters: The development comes at a time when consumers are looking for cheaper ways to save on auto insurance, and incumbent providers look to streamline.

After last month’s launch of Ride Along, an app that allows users to monitor driving behavior and see how much they can save at no cost, as well as a partnership with Ford Motor Company F, Turo and Uber, Metromile saw its conversion rates increase, a testament to the efficacy of behavior-based insurance.

“Ride along is an app that lets people try before they buy,” Chen said. “Since launching, we’ve seen the app convert 20% of users into customers.”

Chen credits Metromile’s commitment to transparency and data-driven feedback for follow-through on its tech-focused growth initiatives. The road to success as an insurtech wasn’t easy, however; the firm was a first-mover, literally inventing the term before it became mainstream.

“Our focus is on technology,” Chen noted in reference to the firm’s growth through multiple acts. “The first act was basically the thesis of insurtech, which didn’t exist as a category … another was building the financial and insurance engine.”

See also: How to Invest in SPACs 

Going forward, the firm looks to scale across the rest of the United States by the end of 2022, as well as add partnerships, grow its licensing division, and invest further into innovation.

“We are building a profitable insurance company,” Chen said in a discussion on helping bring the industry into the future. “All these insurance companies, their typical six-month rate and actuary tables look backwards. We’re able to look forward and say if we’re pay-per-mile, we can be pretty adaptive to almost real-time risk.”