Meet the insurtech: Dayforward
Dayforward, a digital life insurance company launched in 2021, is transforming the way that customers interact with life insurance through its digital capabilities and addressing the industry’s coverage gap by simplifying and streamlining the process.
Aaron Shapiro, Founder and CEO of Dayforward.
Dayforward
Aaron Shapiro, founder and CEO of Dayforward, saw an opportunity for digital disruption in the life insurance industry. Previously the founder and CEO of Huge, a digital transformation consultancy company that was acquired by the Interpublic Group, Shapiro wanted to continue his work of transforming businesses on a larger scale. After he experienced firsthand the difficulties and often tedious process of purchasing a life insurance policy, Shapiro realized that the industry was lacking in digital innovation, especially in distribution and underwriting.
“We really thought holistically about the entire life insurance business and how to rethink it from the ground up with a much more modern perspective…And so we took the step to become an insurance carrier, which is pretty unique,” Shapiro says. “We’re actually the company that issues the policies and takes on the risk, unlike most insurtech companies that are often brokers or agents, and then they’re really reselling a third party product.”
In addition to the opportunity for digital growth, Shapiro shares that he was also passionate about the societal issues related to life insurance – the JAG Institute reports that in 2020, one in 17 children under 18 years old will lose a parent in the U.S. And according to LIMRA, 129 million Americans have no life insurance coverage at all.
“Most families don’t have adequate financial security. So it causes a very, very big material impact to their finances. If you look at all the stats around families facing financial hardship, in most cases, it’s not because they were bad at managing money,” explains Shapiro. “Often, an adverse action happens like a death in the family, a terrible medical issue that happens, bankruptcy, and all these kinds of catastrophic events. And if you look at life insurance, specifically, only about half of all families have life insurance. So we felt that it was a really big problem to solve if we could just bring a level of simplicity and just smarter, easier coverage.”
To address the issues surrounding life insurance, the Dayforward team built a full technology stack that includes capabilities for all of the insurance process from AI-based underwriting to policy administration. The insurtech also aims to make life insurance coverage more accessible to families by simplifying the coverage options, which eliminates confusion and streamlines the process.
Shapiro explains that individuals that want to buy life insurance often become confused by the types of coverage options and overwhelmed or frustrated by the lengthy process. Dayforward will continue the income of a deceased policyholder to the children of their family as part of the policy.
“[Life insurance] is just a really complicated product, so we felt that we should just make it much, much simpler…” Shapiro says. “So when you buy our policy, there’s no figuring out what kind of policy to buy… And then you can have confidence that, no matter what happens, your income will continue and your family’s standard will stay the same until all your children are adults able to support themselves. So we brought a much simpler version of life insurance that we’ve seen, and it’s really resonated with families.”
The insurtech also makes underwriting more simple – a process that normally takes four to six weeks to receive a life insurance policy due to physical medical exams will take only minutes through Dayforward.
“We’ve automated the whole process with a homebuilt underwriting system we developed and that allows most people to get fully insured within 15 minutes. So from the time you hit our site, you’ve completed the application, we automatically underwrite you, and then you leave with a fully issued policy,” explains Shapiro.
The insurtech recently announced its acquisition of Commercial Travelers Life Insurance Company, which expanded Dayforward’s coverage in most of the U.S. and also provides licenses for more products. Its latest funding round of $25 million led by AXA Venture Partners increased the insurtech’s aggregate amount of capital to $45 million, which will be used to further the company’s goals of growing coverage and broadening its products and solutions.
“With the acquisition, we have the ability to sell not just life insurance, but annuities, disability and even health insurance if we wanted to,” Shapiro explains. “While our main focus is our current product we’re selling, as we grow, we intend to have a full suite of financial security solutions for families where we think there’s an opportunity to bring the same level of simplicity and just smarter coverage that we have for life insurance.”
