Bestow CEO Talks Booming Insurtech Business, Transformative Centurion Acquisition

Earlier this month, digital life insurance platform Bestow took a big step in expanding its carrier business nationwide by acquiring Centurion Life Insurance Company from Wells Fargo & Co WFC.

Prior to the deal, Dallas-based Bestow was a licensed carrier in the state of Texas and third-party administrator in 49 states.

The Centurion acquisition will be a transformative event for the company, co-founder and CEO Melbourne O’Banion recently told Benzinga. 

“We knew that to really scale life insurance in a meaningful way that we needed to have autonomy as our own carrier and into product development and distribution and pricing and so on,” O’Banion said.

Related Link: Analysts React To Rocket Companies Q3 Earnings: 'Differentiated Tech-Driven Platform'

Bestow had been looking for a national carrier to purchase with licensing in most states, the CEO said — so the company could expand without having to go through the tedious process of applying for licenses on a state-by-state basis.

Since Centurion was already licensed in 47 states and the District of Columbia, it was the perfect fit, he said. 

Making Insurance Accessible: O’Banion said Bestow’s mission is to make life insurance accessible to everyone and streamline the application and approval process using the company’s technology. Bestow’s approach to life insurance is similar to the approach Rocket Companies Inc RKT took in streamlining the mortgage application process. Rocket went public in August at a valuation of around $36 billion.

“I think there’s a lot of similarities between us and Rocket in the sense that there is a traditional process that is high-friction, a lot of manual processes that take an inordinate amount of time, and Rocket Mortgage brought software and technology to bear to try to expedite that process for the consumer and really appeal to the digital consumer of today. That is very similar to what we’ve done,” O’Banion said.

Customers have been able to reduce a process that takes up to six weeks and brought it down to an "immediate yes-or-no decision,” he said. 

More than 80% of Bestow's customers purchase a policy on the same day they apply, many within just five minutes.

Expanding The Market: Because of its tech- and mobile-centric approach, Bestow has a younger customer base than most legacy insurance providers, with a median customer age of 39.

O’Banion told Benzinga that Bestow is expanding the life insurance market rather than competing with other companies for market share.

See also: Cyber Insurance

“Over 85% of our applicants are actually first-time life insurance purchasers, so we’re not getting a lot of churn and trying to find people who are covered elsewhere. We’re actually expanding and opening the market to these customers who have demand but just haven’t purchased a policy yet,” he said.

Bestow has reported more than a 450% year-over-year increase in policy sales so far in 2020.

O’Banion said he is expecting the acquisition of Centurion to close sometime in early 2021.