HSCM leads funding in workers comp insurtech

Hudson Structured Capital Management (HSCM) has led the first funding round for Insurate, a data science-based workers’ compensation underwriter for high-hazard small and mid-market companies.

HSCM, which does its re/insurance business as HSCM Bermuda, was joined in the $4.5 million seed funding by Foundation Capital, Revolution’s Rise of the Rest Seed Fund, Clocktower Technology Ventures, Sure Ventures, and several angel investors. They included independent agents and buyers of workers compensation.

Insurate uses proprietary data to develop its back-tested Safe-Tier Index (STI), identifying safe businesses to help pricing insurance. Its solutions are offered in partnership with Key Risk (a Berkley Company), Encova, and several other work comp insurers. Average policy savings to date have been 24% without applying maximum allowable credits, according to the company.

“Many small industrial businesses take safety seriously, but they are penalized up to 95% in the pricing of work comp based on perceptions that their work is dangerous,” said Joe McIlhon, CEO of Insurate. “We are bringing data intelligence to discern safe from unsafe, which we combine with human intelligence, to bring fair pricing to safety-conscious industrial companies in the $22B high-risk segment of the statutory work comp market.”

Adrian Jones, Partner at HSCM Ventures, joins Insurate’s board of directors. He said: “The Insurate team is reimagining a large but difficult segment of workers’ compensation using proprietary data and marketing channels.

“Workers’ compensation insurance is often priced with backwards-looking experience modifiers, which are not statistically credible for companies with few employees in hazardous segments. Insurate has built partnerships with large insurers, data sources, and marketing channels to benefit businesses that take worker safety seriously.”