Masters of the Turnaround: "We need to remain optimistic, even in the face of...
Kate Stillwell is the founder and CEO of Jumpstart, a new type of natural disaster insurance that helps families and individuals bounce b...
Event-based insurance to help people recover from a natural disaster
Over $1M in seed funding raised to date
Addressing a $100B global market; $20B in the US alone
Targeting 4M customers by 2023
60% of growth is driven by customer referrals
First company offering parametric insurance for earthquakes in US
Domain-expert CEO co-founded two other quake-related organizations
Natural disasters are devastating - not just in terms of damage, but financially. And most of us don’t have a financial cushion. For hazards like floods and earthquakes that are excluded from regular insurance, 9 out of 10 people lack coverage.
But what’s worse? No savings. A majority of Americans don’t have even $500 to cover a surprise expense, much less the disruption of a natural disaster.
Disaster losses from a large event can be in the hundreds of billions. Recent major earthquakes in the US, in Napa (2014) and Anchorage (2018), have caused losses estimated at $500 million or more. Per family, this equates to a whole year’s median salary - tens of thousands of dollars - and much of this is due to the cost of disruption, even if your home is undamaged.
Jumpstart provides a financial cushion - a jumpstart - after the shock of a natural disaster. We’ve introduced a new product category - called parametric insurance - that democratizes disaster insurance. Parametric means a lump-sum is paid out right away after a pre-defined event, i.e. a “parameter.”
Jumpstart keeps what people love about insurance - getting money when they need it most - while eliminating what people hate - no delays, no paperwork, no deductible, no visit from an insurance adjuster.
By making disaster insurance simple, fast, and affordable, Jumpstart makes it dramatically more accessible, building financial resilience for more people. It’s like micro-insurance for the developed world.
Our first product is for the “earthquake drought” in California. With your help we will soon be able to extend Jumpstart’s parametric concept to other natural disasters and to other states.
How it works
Customers pay a low monthly cost in premiums (average $20/month).
In an earthquake, we use data from the US Geological Survey to determine which customers experienced intense shaking (the “red zone” on the USGS ShakeMap).
If your address is in the red zone of that quake, we text you to say you’re eligible for payout - whether you have damage or not.
You simply reply to our text message to confirm that you've been affected.
We initiate a direct-deposit of your payout as soon as you respond.
Here’s what the Jumpstart payout zone would have looked like in the 2014 Napa earthquake.
Jumpstart started selling parametric insurance for California quake in October 2018. We launched direct to consumer (B2C), but not at the exclusion of distribution partnerships (B2B).
Initially most of our customers are B2C. What’s most exciting is that more than 60% of the growth is coming from word-of-mouth referrals from other customers. And, every time there’s a small earthquake we get a surge in new customers.
In the B2B channel we’re getting interest across a variety of verticals, most notably companies offering Jumpstart as an employee benefit. (Ask your employer for Jumpstart!) Partnerships will be the key to scaling-up growth, and we have dozens of discussions in the pipeline.
We launched direct to customer in October 2018, and so far our customers love us.
Our customers span the demographic spectrum. However, we’re seeing clusters of customers in two distinct segments:
Under-35 renters who haven’t accumulated much savings
Nearing-retirement homeowners who don’t want to tap their savings in a disaster
Here are real quotes from real customers in each of those segments:
Here are some more quotes from real customers:
We operate on an insurance brokerage business model. Customers pay their premiums to us. We retain 20-30% gross margin (commission) and remit the net premium to certain underwriters at Lloyd’s. Lloyd’s bears 100% of the responsibility to make post-disaster payouts to customers.
Jumpstart is a Benefit Corporation with the mission to build financial resilience. Our specific social impact goal is to multiply the amount of economic stimulus flowing into a region - 10x more money - after a big disaster.
In the words of Kate Stillwell, CEO: “As a structural engineer, I worked to make the world a safer place in earthquakes. But at the time of Hurricane Katrina, I experienced a professional crisis - there are much bigger problems. In the next big earthquake, my hometown of Oakland could be the next New Orleans. If people move away, the fabric of the city will change forever.”
There are many pieces to the resilience puzzle but perhaps the biggest gap is money. Money - sometimes even small amounts - can make a huge difference in post-disaster resilience. It can tip the balance between being able to stay in the area to tough it out and help neighbors rebuild, or move away and re-start life from scratch.
Jumpstart has huge potential to be a force of change to create community resilience. An internal study on the opportunity for impact - just for earthquakes - found that if only 1 out of 10 people buys Jumpstart, it will multiply economic stimulus 50x after a moderate quake like the one in 2014 in Napa, and by 3x - $7 billion dollars - in a Big One (Magnitude 6.8 on the Hayward Fault.)
More than 40 million Americans live in an earthquake zone. Another 50 million are exposed to other natural hazards, notably flood, which, like earthquake, is excluded from typical insurance. Worldwide, the “protection gap” - insurance-speak for the untapped market - is $180 Billion annually.
Our product can help people living in any disaster region, and we have plans to expand. We started in California because our Founder has domain expertise in earthquake modeling, and also because of the high concentration of risk. We are in active discussions with counterparts in Chile and Japan to discuss parametric earthquake insurance for consumers in those countries.
For California earthquakes alone, the potential market is $6B. (Today, with 1 out of 10 buying coverage, the CA quake market is about $800 Million.) Our 5-year goal is only a fraction of this potential - $600 Million in revenue - including product expansion within the US.
We have no direct competitors at the moment. The vast majority of conventional earthquake insurance in California is provided by the quasi-governmental California Earthquake Authority (CEA).
Glenn Pomeroy, CEO of the California Earthquake Authority has gone on record stating that Jumpstart and CEA are not competitive products. In some respects, Jumpstart is an introductory product that could lead to future purchases of conventional insurance like CEA.
Jumpstart has raised over $1,000,000 in seed funding to date from a variety of individual and organizational investors. Notable investors include:
Jumpstart aims to make parametric insurance so common that “Jumpstart Policy” becomes a generic term for any coverage with fast, fixed payouts. Moving from earthquakes to other hazards and other states, our long-term plan is to provide parametric insurance for disasters around the world. The reason we’re raising money is to support that product expansion.
Kate calls it her “life’s work” to build resilience. She has 20 years of domain expertise in the science and risk of earthquakes. “There’s nothing I would rather do with my time and talents than make Jumpstart a reality and bring it to millions of people.” The “short list” of Kate’s accomplishments include:
named “Insurance Innovator to Watch” by Digital Insurance
Co-Founder, US Resiliency Council
Co-Founder, Global Earthquake Model Foundation
licensed Structural Engineer in California
registered Disaster Service Worker by the State of California
Past President, Structural Engineers Association of Northern California
Housner Fellow, Earthquake Engineering Research Institute
formerly Product Manager of Earthquake Models at EQECAT (now CoreLogic)
Stanford University, MS Civil Engineering
UC-Berkeley - Haas School of Business, MBA
University of Minnesota, Bachelor of Civil Engineering
Together we can build financial resilience, unlock an untapped market, and democratize disaster insurance.
The smallest investment amount that Jumpstart is accepting.
Jumpstart needs to reach their minimum funding goal before
the deadline. If they don’t, all investments will be refunded.
The Crowd SAFE is an agreement for future equity in the startup,
meaning that it can convert to equity in the future.
The Crowd SAFE is an agreement for future equity in the startup, meaning that it can convert to equity in the future.
$25,000 – $1,070,000
Jumpstart needs to raise
before the deadline. The maximum amount Jumpstart is willing
to raise is $1.07M.
-You sign up and pay (average cost $20/month)
-The earthquake happens
-We link data from the USGS with our technology to determine who's eligible for payout
-We text you to tell you you're eligible
-You reply yes
-We initiate electronic payout to your account on file
No. Our partner, Lloyd's of London, assumes 100% of the responsibility to make post-disaster payouts. Securing that partnership was the biggest hurdle to clear. We had to convince them that the product is priced appropriately to compensate them for the risk they're taking.
Technology is the lynchpin of Jumpstart's value proposition. Even though technically our product is an insurance policy, it wouldn't be possible without the technology we built. We built in-house and own four technology platforms that enable Jumpstart to exist:
This question stumped us at first, but once we started, it quickly became obvious! The answer is different for other startups vs. incumbents.
To other startups, the barrier to entry is enormous - it takes years of prep across multiple disciplines, without a product in market. The startup needs both a 3-year runway as well as domain-expertise credibility with both the regulator and the risk-bearing partners. For an insurance product you cannot start selling until all the tech is "done" (not just MVP!).
To an incumbent, there is significant operational risk in bringing to life a new product category that pushes regulatory conventions. It could put their profitable lines of business at risk of being unduly scrutinized, when the potential upside is highly uncertain.
Many more people than who buy it now! If you ask anyone in California if they believe the Big One is coming, they will answer "of course." What's missing is product options. The current situation is like if the only restaurant option was a fancy steak house. More people go out to eat if there's also a burger joint.
That's may be an imprecise analogy, but here are some numbers that show untapped demand: Before the 1994 Northridge earthquake, about 28% of people bought it (the cost was about 1/3 in today's dollars). Now about 10% of people buy it. So we believe we can unlock triple the current market simply by introducing a simpler, lower-cost option.
Investors should verify any issuer information they consider important before making an investment.
All securities-related activity is conducted by OpenDeal Portal LLC doing business as Republic, a funding portal which is registered with the US Securities and Exchange Commission (SEC) as a funding portal (Portal) and is a member of the Financial Industry Regulatory Authority (FINRA). Republic is owned by OpenDeal.
Investments in private companies are particularly risky and may result in total loss of invested capital. Past performance of a security or a company does not guarantee future results or returns. Only investors who understand the risks of early stage investment and who meet the Republic's investment criteria may invest.
Republic does not verify information provided by companies on this Portal and makes no assurance as to the completeness or accuracy of any such information. Additional information about companies fundraising on the Portal can be found by searching the EDGAR database.