The genesis behind the formation of Authentic was the realisation that embedded players were only offering “very small” commission splits to their distribution partners.
New-York and Ohio-based Authentic announced in September that it had raised $5.5m in a seed round.
The company is touting a ‘Captive in a Box’ platform it says allows any vertical software as a service (SaaS) company, franchise or association to launch captive programmes in a matter of weeks.
Authentic offers business owner’s policy (BOP) coverage and is also targeting businesses in food and beverage, salon and spa, retail, fitness, and professional services.
It is utilising Montana as a captive domicile and its series business unit (SBU) regulation.
Cole Ricarrdi, founder and CEO at Authentic, told Captive Intelligence that he had questioned why companies with distribution capabilities had not formed their own programme, or their own captive.
“When I went through the process of mapping that out, I realised that is incredibly challenging,” he said.
He said no one had ever previously packaged underwriting, legal work, reinsurance and capital together as a product before.
Ricarrdi noted that the current trend in the software industry is the attempt to bundle in more financial services, “so it’s a very natural fit”.
“If a client is a software company, their entire goal is to sell more products and services into their gyms, or their restaurants or salons,” he said.
He said the client is essentially the operating system from a technology standpoint.
“Because the owners are logging in every day, they realise that they have incredible shelf space to add other financial products, and we want to be that insurance offering on the shelf for SaaS companies,” he said.
Since Authentic’s New launch, Ricarrdi said the company has been “overwhelmed”.
“We had strong interest before we launched in our software channel, but what’s neat is all the interest we’ve had from other channels, including brokers or agency captives,” he said.
“Some brokers have reached out for a more tech enabled solution or a more turnkey solution to a captive for their client.”
Ricarrdi said at first the expectation was to mostly go direct to software companies, agencies, or credit unions but “we’re actually being contacted by brokers to use our services to stand up a captive for a client”.