Jamie Hale, CEO and co-founder of digital life insurance company Ladder, seems to be smiling perpetually. Even when he delves into the stats, there’s a smile in his voice.
When Hale was 11, her father died suddenly. His father’s life insurance policy meant that he, his mother and brother could stay in the same community and continue to be supported by family and friends.
“Life insurance gave us emotional resilience and it gave us financial resilience,” he says. Hale went on to study at Harvard Business School and pursued a career in investment banking. However, he wanted to combine his financial savvy with impact. Around the same time, its co-founder Jeff Merkel quit his job at Google and struggled to get life insurance. Vigorous; his wife, Laura; Merkel; and Jack Dubie, a former Dropbox engineer, decided to found Ladder in 2015.
Life insurance has been sold in the United States since the 1760s, but it has been slow to digitize. According to a 2017 report by McKinsey & Company, 90% of life insurance policies in the United States are sold through agents or a broker rather than directly from a company, and for companies In traditional life insurance companies, up to 40% of their expenses are tied into their core processes, such as the use of agent commissions, which leaves less room for flexibility.
Fast forward to 2020 and 54% of Americans were covered by life insurance, but obtaining life insurance can be an extremely slow and impenetrable process. Typically, after purchasing life insurance, each individual must be underwritten or rated for their level of risk so the company knows how to price their policy, a process that can take up to a few months. Ladder is part of a group of digital life insurance companies such as Haven Life Insurance, Bestow and Ethos Life that are trying to disrupt the life insurance industry by offering digital underwriting that allows customers to be approved in minutes.
In particular, Ladder stands out for its flexible coverage. Customers can easily add or reduce the amount of coverage they want, and see their payments increase or decrease accordingly, although as a caveat, customers who want to increase their coverage must reapply. “Life insurance can be very rigid,” says Hale. “It can be difficult if you want to reduce coverage. We wanted to solve this problem.
He notes that it is more difficult for traditional companies to offer this type of flexibility because a large part of their costs are related to the underwriting process. Hale credits Ladder’s flexibility to its high customer retention rate. “We only lost 3-4% of our customers a year,” he said.
Since the start of the pandemic, Ladder has seen an increase in customers, especially millennials looking to protect their families during these uncertain times. Late last year, the Palo Alto company announced it had raised $100 million in Series D funding from backers led by Thomvest Ventures and OMERS Growth Equity. In 2022, its year-over-year growth has tripled. Ladder has issued more than $42 billion in cover and its membership has more than doubled since the pandemic began.
Today, Hale’s biggest challenge is growing Ladder while remaining focused on its people’s culture and processes. “Life insurance is an act of love,” he says. “You don’t do it for yourself. You do it for your family.