tl;dr: we’re building a new type of insurance and a platform to support it so that people can better enjoy life’s adventures.
“Insurance? Really?”
My friends and family were in a weird state of bemusement when I told them about my new venture. It seemed like I was taking a conventional turn in what has, to date, been a fairly unconventional path.
But, I’m not forsaking my jeans and t-shirts for blazers and slacks — not yet. Instead, I’m joined by an intrepid team that’s building an insurance business designed to get outside, be portable, and support our customers’ passions for adventure.
We started from our own experiences as backpackers, cyclists, paddlers, climbers, and snowboarders (to name a few). Each of us has a story or a scar from an adventure that’s gone sideways. As we listened to friends over the past few years, a common thread began to emerge; it’s suddenly really expensive to have an accident!
The Problem
Last fall, I was on my way home to Richmond from California. Since RIC has somewhat anemic routes when it comes to flights, I was sitting in the brewpub in the Minneapolis-St.Paul airport killing time with a beer and a burger. I struck up a conversation with my bar neighbors.
We started talking about beer, and I learned that one of my new friends was in the process of starting a brewery with her husband in Idaho. We talked a bit more, and it turned out that they met while downhill skiing — our people!
Since starting on the brewery project, they’ve left their jobs and have now switched to marketplace health insurance with a high deductible. They’ve also stopped skiing. As she put it, one accident would wipe out their ability to fund their brewery.
As a high deductible plan holder myself, this looming financial burden is real, and for the past couple years, every trail run, bike ride, and hike left me with a heavy feeling in the pit of my stomach.
It turned out that we weren’t alone. In our customer research, our team asked if respondents knew how much they would owe out of pocket for a trip to the ER. No matter what they said (only about a third knew), the answer to the follow up question, “How do you feel about that?” was nearly 100% negative.
Fear, uncertainty, doubt (FUD) stemming from serious out of pocket expenses can make you question your ability, distract you from performance, or even prevent you from engaging in an activity in the first place, and what kind of a life is that? NOT A FUN ONE!
Digging In
Don’t care about research? Skip this section.
Further research revealed that there are a few contributing factors driving up the costs of an accident. First, the overall cost of healthcare is going up, and it has been for some time (deductibles are up 63% since 2011 according to the Kaiser Family Foundation). Second, the Affordable Care Act’s individual mandate caused a reshuffling of how health insurers address the market. Third, the changing nature of work is shifting our relationship with employer-provided benefits.
These underlying factors combine, and the output is that more people are covered by high deductible and high copay insurance plans. According to a study by Zane Benefits, the average individual deductible is now over $4,000, meaning that an unexpected accident could really put a dent in your wallet, savings account, or credit card, and in some cases, it could spark a serious debt cycle.
What We’re Doing About It
To address the problem, we’re creating a new type of insurance coverage, episodic accident insurance.
Episodic means that you can buy it for whatever period you like. For example, if you’re competing in an adventure race, you can buy just a day, or if you’ve got your season lift tickets, you can buy coverage for all of ski season.
The accident coverage piece of what we’re creating provides simple, first-dollar benefits if you get hurt and have to go to the ER, hospital, or urgent care. Benefits are paid directly to you, the policyholder, so you can pay deductibles and co-pays, or you can use our the benefits to cover other expenses.
To be able to efficiently sell episodic coverage, we’ve had to re-engineer the insurance agency technology stack. The short version of this is that we’re building all of our interactions as APIs, and we’re creating chat systems for support, so you can communicate with us through your favorite messaging platforms.
Our goal is to provide coverage and an experience that is as fast and light as your favorite outdoor gear.
Expanding Our Offerings
Beyond our accident product, we believe that there are additional types of insurance that make sense for active, outdoorsy types. While this portion of what we do will evolve over time, we’re beginning with a term life insurance offering.
If accident insurance is one end of the spectrum, term life is the somewhat morbid, but no less necessary other end of that spectrum. Our team has sourced a term life product from Assurity Life, which we like for many reasons, but a few of the highlights are that Assurity is a B-Corp with a focus on sustainability, the insurance policy is easily converted from term life to other permanent life products as your life evolves, and they offer a number of options to customize their coverage (these are state by state).
As we grow, we’ll offer more products, so if you have something that you want to see from us, just drop us a note!
Building Something Bigger
Our mission is to enable people to have more adventures. In my life, getting outside, exploring, and sometimes pushing my limits has allowed me to better understand who I am.
The Buddy team all have their own versions of this experience, so we are building our business to reach beyond insurance. To start, we will use 10% of what we make to support outdoor causes in three areas–environmental protection, education, and access.
Environmental protection is designed to keep our natural resources preserved for generations to come. Education will enlighten us with new activities, destinations, and cultures. Access, perhaps the most important, gives populations with little or no current access to or representation in the outdoors a platform to share in the benefits of nature.
What’s Next?
We’re currently testing out programs with select partners to make sure that everything is running smoothly before launch. As we begin to scale up, we’ll be reaching out to folks on our email list both to notify you that we’re opening up the doors and to get your thoughts on how we can build a better insurance company.
In the meantime, go play outside!
