(Image source: Obie website.)
Obie, a new InsurTech distributor, has launched its insurance offering targeting landlords and investment property owners, available in all 50 states. The company boasts an instant quote platform that it says delivers the kind of coverage these small businesses need through what it calls a dramatically improved, data-rich process. Obie, which reports securing insurance for over $3 billion in property during the past year, says it can save landlords 25 to 30 percent off their existing premiums.
The company also disclosed that it had raised $10.7 million in Series A funding to fuel rapid growth. Obie reports that the round was led by global investment firm Battery Ventures (Boston), with General Partner Michael Brown joining Obie’s board of directors. Thomvest Ventures also joined the round, in addition to previous investors Funders Club, MetaProp, and Second Century Ventures.
“The number of small, hobbyist landlords and property investors is growing at an impressive rate, yet nothing exists in this space to provide them with the quality insurance coverage they need to safeguard their investments,” comments Brown. “When we saw what the Obie team had built, we were immediately struck by how their technology didn’t just slap a band-aid on traditional approaches to insurance coverage; it brings intelligence and simplicity to the process to match each policy application to the ideal carrier for respective risk factors. This results in a win for all parties.”
Simple, Affordable, Transparent
Obie’s stated mission is to provide a simple, affordable, and transparent insurance experience for clients and their investment properties, with a particular focus on the 11 million small-to-medium size apartment landlords who own single family rentals and/or larger apartment buildings. Based on their work in real-estate private equity and insurance, Obie co-founders Aaron and Ryan Letzeiser say that they recognized that, despite being the largest class of real estate investors in the U.S., this group is significantly underserved. The reason, according to the founders, is that these investors are too small for larger brokerage houses, while the smaller, independent insurance agencies are generalists with only limited carrier partners that specialize in this type of risk. As a result, landlords get bad pricing and limited coverage, after enduring a lengthy and antiquated application process.
Obie’s remedy for this market segment’s predicament is to offer a consumer-friendly approach in line with contemporary digital expectations. The company says it replaces an opaque, email-based insurance acquisition process—where landlords are forced to fill out PDFs and spreadsheets before waiting more than a week to even receive a quote—with a brief online questionnaire. Landlords and property investors then can get the coverage that fits their specific needs in less than five minutes.
“The impact of insurance premiums on real estate investors’ bottom line and the overall value of the asset is significant, yet the process of securing proper coverage has always been a bit of a black hole,” comments Aaron Letzeiser. “Obie changes this. We built technology that makes securing insurance the least of a landlord’s worries. Now purchasing insurance is quick, easy, and extremely cost efficient, and with Battery’s support we can scale even faster to meet the needs of this growing market.”
How Obie Works
When landlords and property investors come to Obie, the platform walks them through a short series of questions and provides an instant quote that, once accepted, can be immediately underwritten. Obie is able to do this by extracting a few key data points from client responses, which its technology then enriches with dozens of public and privately available data points to eliminate the constant back-and-forth that normally occurs between a real-estate investor and an insurance agent. Obie’s platform analyzes over 50 novel underwriting data points, which include factors such as the proximity of the landlord to the property, as this is often a powerful indicator of proactive and preventative maintenance as well as attentiveness to tenant issues.
Once Obie runs its analysis, the platform uses a proprietary algorithm to match an application to carriers based on the risk-appetite profiles that carriers have at any given point in time. For example, this could include things like writing properties in hurricane zones or excluding those that don’t want to write any policies this quarter for properties built before 1980. By targeting carriers accordingly, Obie is able to deliver the right level of coverage for a dramatically lower cost than other brokerages, which is particularly important for landlords who have been hit by rent uncertainty amid the COVID-19 pandemic.
“I had been using the same brokerage for years, but by managing my portfolio on Obie, I was able to easily request new quotes that saved me more than I ever would have expected on my existing premium– something my old brokerage wasn’t able to do,” comments Doug Hirsh, an Obie customer. “That kind of instant savings substantially increases IRR and cash-on-cash returns. Using Obie has been a no-brainer. I couldn’t be happier with the entire experience and level of coverage.”