CEO Schimek: Bolttech is now largest embedded industry player

Bolttech is the industry’s largest embedded player, quoting some $50bn in premium annually, according to CEO Rob Schimek, who added that the insurtech would look to expand geographically based on client demand and is eyeing accretive M&A opportunities.

The Bolttech co-founder and former AIG executive made those comments in an interview with The Insurer TV on the sidelines of this week’s Insurtech Insights USA Conference at the Javits Center in New York.

The company offers white-labelled embedded insurance products from numerous major carriers and distributes its products via large corporates across seven industry verticals, operating with what Schimek calls a “B2B2C” model.

As an example, Schimek said the insurtech “loves” working with telecommunications firms.

“We can help any kind of distribution partner – telcos as examples – who are not insurance players, who have an opportunity to provide a protection product to the end consumer, but they don't have the expertise,” he commented.

“Or they don't have the licences or they don't have the technology to make it happen,” he added.

“And we can do all of that. So we can really turn any kind of partner into a distribution channel for insurance and protection products if they have a customer base that's looking for that.”

Currently targeting seven industry verticals

In addition to telecoms, Bolttech currently serves original equipment manufacturers like Apple and Samsung, along with the real estate industry and financial institutions, while Schimek also said that the insurtech “loves” the mobility segment.

“We work with some of the world's largest providers or manufacturers of automobiles. And at the same time as that automobile is rolling off the line, and they're offering to sell it, what a great time to offer to protect it,” he noted.

“We know our space. We focus on specific verticals. There are many – we could choose probably 100 verticals, but for us, [it’s] seven today, maybe we'll expand it to be 14 one day, but we want to be great at the seven that we're focused on,” Schimek explained.

Following an explosion of embedded insurance strategies in recent years, he described Bolttech as the leading industry player in the space – which he said has a total addressable market in the trillions of dollars.

“While we're a private company [and] we don't disclose the details of our revenue, let's say I'm highly confident that the revenue of our company is well ahead of the revenue of anyone who is in our peer group,” he explained.

“In those ways, we're a leader, but the truth is, we do learn from the others [pursuing embedded strategies], and we hope that they will continue to follow our lead and all of us together,” he said, describing the embedded market as “a huge pie”.

“We don't need to be trying to focus on stealing one another's business. Let's focus on how we actually enable this entire business to succeed. That's our dream,” he said.

Significant runway

Bolttech’s CEO said that the firm has significant runway in both the geographies and industry verticals that it serves and that its growth potential is “partner-led”, where success with a partner in one geography begets success in others.

“We're not here just to plant a flag in every geography and say, ‘Hey, we're here. We're doing it in all these geographies’, but instead, what we're trying to do is be partner-led,” he explained.

“So what we do is a great job for a partner in one country [and] if they have business in another country, they ask us, ‘Could you do the same thing for us in this next geography?’ We love that.

“We go on a customer-led journey, where we find customers, or distribution partners, who have lots of customers – thousands of customers, hundreds of thousands of customers, millions of customers – and then, what we do is we enable their ability to get these products to the market,” he explained.

“And so we spend our time focusing on expanding the number of distribution partners that we have, and focusing on providing more and more access to the balance sheet risk-taking partners as we possibly can,” he added.

Schimek borrowed the oft-misquoted line from Field of Dreams of “build it and they will come” to explain that Bolttech does the opposite, instead building out products that are specifically driven by client demand.

“We never say ‘I'm going to build it in a geography and then the customers will come’. It's 100 percent partner-led. And so, for us, this is very much around selecting what kind of partners we are looking for,” he noted.

M&A opportunities

Bolttech had the largest ever insurtech Series A and B funding rounds, with Schimek describing the capital the firm has raised as “the fuel that makes the rocket ship go”, while saying that its next funding round would be dictated by market conditions and inorganic opportunities.

Schimek said Bolttech is trying to navigate its pace of growth with its level of operating costs, and that for a period of time last year the firm was profitable on an Ebitda basis.

“The reason that we were able to raise … is because we recognised the balance between needing to grow fast, but being able to hit the brakes and make those tricky turns to hit profitability targets,” he said.

“Time will prove whether we're able to sustain that, and whether we're able to hit those other [profitability metrics]” like cash flow break-even and bottom-line profitability, he commented.

“But I'd say, I'd bet on us, not against us, if I were sitting in someone else's shoes.”

Schimek highlighted Bolttech’s acquisition last October of Poland-based Digital Care as the largest M&A deal in its history, flagging the complementary nature of their operations as the type of M&A the insurtech would consider.

“And they're in a really powerful, strategic location for us, in Eastern Europe,” he explained.

“It's neat, because it shows we were able to raise capital, and we were able to deploy capital, and I think people will pretty quickly see, not only did [we] deploy capital, but [we] turned it into a really successful part of the future growth of the engine,” he commented.

Schimek said that Bolttech “found a way” to integrate Digital Care rather than “have it off to the side as a hobby”.

“So we love that and we'll continue to be on the prowl if those kinds of opportunities exist. But we're very selective. We don't want to do an acquisition that's not accretive to our investors,” he explained.

Schimek said that Bolttech is looking for “tough-to-find” deals that will be profitable and not burn cash, which means that the firm sees a fairly narrow list of acquisition targets.

“We're not interested in buying just anyone for any reason: we have a very specific set of criteria. But that's a great example of how we've already deployed a big chunk of capital that we raised just in our Series B,” he commented.

Watch the full interview with Bolttech’s co-founder and CEO Rob Schimek to hear more about: