Life insurance isn’t as popular as it once was, despite the fact that a majority of people consider it to be important. Over 80% of consumers agreed in a recent survey that people need a life insurance policy, yet just 62% say they have one themselves. In fact, only 44% of U.S. households held individual life insurance as of 2010 — a 50-year low — compared with the 72% of Americans who owned life insurance in 1960.
A New York- and Hartford, Connecticut-based startup hopes to reverse the trend with a novel service that rewards policyholders for making smart lifestyle choices. Dubbed Sproutt Insurance, it’s the brainchild of insurance tech company Akitbo CEO Yoav Shaham, who nearly two years ago set out to blend analytics and health insights with AI to match people with life insurance providers.
Sproutt officially launched today with $12 million in series A funding, which was furnished by State of Mind Ventures, Moneta Capital, and Guardian Life. Shaham says it’ll fund product research and development and the further growth of the firm’s workforce.
“For decades life insurance providers have mainly sought to punish negative lifestyle choices such as smoking when calculating pricing. As crazy as it sounds, until now the industry has almost never even tried to reward people for being healthy; for being active, eating and sleeping well, or living a balanced life,” he explained.
To this end, Sproutt instructs new customers complete a 15-minute questionnaire about themselves and their daily habits, the answers to which inform a quality of life index that’s used to identify best-fit policies. This index is designed to take into account a range of factors, but it’s built upon five core wellness pillars: movement and physical activity, sleep, emotional health, nutrition, and balance (e.g., in work and life).
Shaham calls it GAIA, or Guided Artificial Intelligence Assessment. In practice, applicants who score the highest tend to get at least 150 minutes of weekly moderate physical activity, sleep and wake up at consistent times, have strong familial relationships and friendships, own a pet, eat natural foods and limit their sugary drink intake, and make time for personal care and leisure. “Sproutt ensures that people who make positive lifestyle choices that improves their longevity are supported and rewarded with the best policies, and that they adopt these good behaviors, as it means that we all will have increasingly less expenses,” he said.
Sproutt is an insurance broker, and like most brokers, it collects a commission from the carriers to which it refers customers. (In an effort to tamp down on bias, the state-licensed advisors who curate policies for Sproutt receive the same share from all insurance providers.) It’s not affiliated with any life insurance companies, and it continuously reviews and rates products and only shares personal information with insurers at application time.
“Breathing new life and positivity into an old industry has been both a challenge and a privilege. Sproutt believes life insurance is critical, because it protects that which is most dear to us: our families. This is why life should be celebrated,” said Assaf Henkin, president of Sproutt. “We saw how to use data and AI for good to benefit consumers and disrupt an industry that has failed to modernize. Sproutt provides people with a high-quality experience and guides them to the life insurance they deserve, many times the same day they apply.”
Sproutt isn’t the only AI-forward firm in the $532.7 million global insurance tech market that’s attracted deep-pocketed investors, it’s worth noting. Ethos, a company that’s using predictive analytics and big data to issue life insurance policies, raised $60 million in August 2019. And Health IQ, which collects data to let health-conscious people save upwards of $1,238 a year on their life insurance premiums, nabbed $55 million in May.