Life insurance startup Ethos raises $202M at $2B valuation

In April, I was told that Ethos Life was raising at a $2 billion valuation with $77 million in premium run rate. Now, according to Crunchbase, the life insurance intermediary closed a $202 million Series D round led by General Catalyst with participation from Accel, GV, and Sequoia Capital. This round brings the company’s total funding to $308 million.

Founded in 2016, the company (a team of 150-plus) offers term life and whole life products, sells directly to consumers, and works with agents; despite previously raising concerns around the “ubiquitous practice” of employing commissioned insurance agents, as it can mean that agents are incentivized to make a sale and not to find the policy that is right for the individual. But to say that Ethos “works with” agents is an understatement. The company did a one-eighty to now support agents in various ways. Ethos regularly hosts webinars around lead generation and telesales, it has an Agent Council, and it provides scripts to help agents sell better over the phone. Here are some tips by a member of Ethos Agent Council, which were shared with agents:

  1. Tone, Pace, Energy, Close. He has these four words on his desktop monitor.
  2. Always make one recommendation. Like a doctor, take the client’s symptoms and prescribe the correct solution.
  3. ____ is the expert here. He asks the questions, not the other way around.
  4. When you find the right policy for a client, you are firm and aggressive with the close. Stand for the beneficiary, pretend you’re the bene and the client is about to die without buying this policy.

As of October 2020, it had appointed close to 200 agents and its Facebook group for agents currently has 1k members. Ethos also secured a partnership with Brokers Alliance, a distributor of financial and insurance products for financial professionals, and most recently it announced a partnership with Appalachian. Other affinity partnerships include a personal lines insurance aggregator and a personal lines/commercial lines wholesaler.

In comparison, according to a source, Bestow anticipated to end 2020 with around 35k policies in force. It also recently secured a partnership with Lemonade.

Finally, other players in the space include Ladder and Dayforward.