Construction Tech Firm Procore Launches Insurance Brokerage
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Since construction technology vendor Procore announced in March the launch of an insurance and surety brokerage, the company has been gradually expanding it. The newly formed Procore Risk Advisors, which will provide all lines of coverage, is now offering exclusive builders' risk and general liability wrap-up policies for Procore customers in partnership with powerhouse insurance carriers Allianz Global and Swiss Re, the tech firm said last month.
With its foray into a new area of risk management, the Carpinteria, Calif.-based firm became the first construction-focused technology company to provide insurance services.
Procore has joined a field with dozens of big and small brokerages that serve contractors, including one operated for many years by construction management giant Turner Corp. and another by Moss, a Fort Lauderdale, Fla.-based CM.
Technology companies in other industries also have started brokerages, such as Toast, a software platform for managing restaurants, and more prominently, Tesla, the electric car maker. As managers of vast troves of customer data, they have leveraged their mastery and deep knowledge of client operations to add insurance brokerage.
Procore (PCOR-NYSE) has 15,000 customers—including some of the most successful contractors in the U.S.—as well as substantial financing and a faithful following among investors. But like other tech companies with substantial businesses, it is not yet profitable.
Procore's new unit has the potential to simplify the laborious steps involved in obtaining builders' risk coverage, general liability policies and surety bonds, it says.
In some instances, Procore Risk Advisors will use in-house underwriting services to provide price quotes in days that previously would have required weeks or months of paper or email documents being exchanged, the company says. Peter O'Brien, Procore general manager for brokerage, says another concrete advantage for firm customers will be the ability to autofill applications for coverage.
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Better Data, Lower Premiums
According to Procore, because companies that use its platforms are likely to be better risk managers, they are more likely to qualify for coverage at lower premiums.
For some customers in need of surety bonds, the new entity will be able to "show financial strength, based on real-time work-in-progress reports" and other ways to build a strong case, says O'Brien.
Danny Seigle, vice president of Procore Risk Advisors, says contractors often work with brokers that, unlike Procore, don't "live and breathe" construction. For its new venture, the firm has five brokers who specialize in construction and also have deep underwriting experience.
Command of data, Procore's specialty, is inextricably linked to risk management, says O'Brien. "When we're on board, we will look through five years of loss runs and help [customers] build cultures of risk management and safety," he says. "We see a new opportunity for contractors to manage risk holistically," and "to arm organizations with information they need" to do that.
