Life insurance does not seem like the sexiest of segments. Most of the major players in the industry were founded 150 years ago or more. They often develop such scale and recurring revenue streams that they can develop a bit of strategic laziness, as well. These were among the reasons why entrepreneur, Peter Colis, saw opportunity as he evaluated the life insurance industry.
Colis had a job in advertising prior to attending Stanford Business School. When he arrived in Palo Alto, he met Lingke Wang, a computer scientist who also had an entrepreneurial bent. As they scoured industries that presented opportunities, life insurance checked a lot of boxes suggesting major opportunities. Investors have agreed, as the company has a stable of A-grade venture capital firms have invested in their company, Ethos Life, including Sequoia, (see my interview with Sequoia’s lead investor in Ethos Life here), Accel, and GV, Google’s venture arm. Additionally, Jay-Z and Kevin Durant have also invested in the company.
Life insurance was attractive for two reasons. First, the product is difficult to obtain. It is time intensive, confusing, and it requires many tests to validate coverage. Second, Colis highlights that the incentives for brokers, who are paid on commission, often lead to consumers purchasing coverage that is beyond their needs and their means.
In this interview, Colis describes his entrepreneurial journey, the growth and team composition of Ethos Life, as well as his thoughts on what is next.
Peter High: You are the Co-founder and CEO of Ethos Life, a San Francisco-based company that you founded in September 2016. Your organization has caught quite a bit of momentum, especially in the investor community. Could you talk about the business and the problem that you were looking to solve when you created it?
Peter Colis: My partner Lingke Wang and I started Ethos when we were roommates at Stanford Business School. I came from a background in advertising, and Lingke came from a technical background. Originally, we got interested in a different aspect of life insurance, and we learned a great deal about it. In doing so, we came to understand that life insurance is incredibly important. More than five percent of children in the U.S. are going to lose a parent by the time they turn 18, and 70 percent of families are so unprepared that if they lose a breadwinner, they would be in total financial ruin within three months. This data implies that Americans are vastly unprepared for the loss of a breadwinner. While this is an important industry, we realized that it is executed poorly by the existing players, so we saw an opportunity to dramatically improve how it is executed with technology.
Ethos is a modern and ethical life insurance company. Unlike the traditional life insurance experiences, with Ethos, you go to our website, you fill out an application online in ten minutes, and then you are done. There are no medical exams, no blood tests, no paper applications, and no pushy agents. We launched in early 2018, we are now processing thousands of applications per month, and we look forward to continued growth.