A 100-Year Company, Starting With a Reserved Ticker

Jeff McCann joined from a sunny day in Vancouver wearing a green sweater with a stock ticker on it. APOLLO had reserved a ticker at a banker’s suggestion, a little ahead of itself, but the team printed it on sweaters as fun and as a reminder of the moonshot. The company’s brand color is red, so the green was slightly off-brand.

The swag is a deliberate culture tool for a remote team. Jeff and his co-founder redirected the holiday party budget and office costs into track suits, Nike sweaters and shoes, with a milestone system: a jacket at one year, shoes at two, and the two founders, at year three, still to choose theirs. Building a great team is, he said, one of the most important things the company does, and in a work-from-home world the question is how to reinvent culture as much as technology.

About Jeff McCann

Jeff McCann is CEO and founder of APOLLO, an online insurance company based in Vancouver that operates as an MGA and offers Canada’s largest selection of insurance online. APOLLO was the second Canadian company on the podcast, after Brisa.

What APOLLO Does

APOLLO is an MGA backed by a variety of reinsurance and insurance providers. It takes products to market in two ways. One is a portal for insurance brokers, about 2,000 of them, to get an immediate quote, have the policy issued and pay online, with straight-through processing. The other is an embedded solution, which plugs the same products into other platforms such as broker websites, REITs, property management companies and proptech. APOLLO had about 150 embedded deployments and expected embedded insurance to be a ten-year horizon for the business.

The product range is broad: general liability, property, errors and omissions, and coverage for everything from tech companies and consultants to yoga instructors and non-profits, with businesses of up to about 20 employees, as well as renters insurance and, soon, home insurance. Jeff’s focus is on the customer rather than the line of business. An entrepreneur starting a business at the kitchen table needs insurance for the business and also for the home, so the products should be complementary, whereas many carriers separate the two.

Competing With Incumbents, Not Other Insurtechs

Jeff sees the competitive set as the slower-moving, less customer-centric incumbents. He cited Canadians’ spending of about $66 billion a year on P&C, about a tenth of the US, and global P&C premium in the trillions, and noted that no company holds more than about five percent of the market. His view is that APOLLO can build an iconic Canadian business serving the North American market without worrying too much about what Next or other insurtechs are doing. Gilad observed that Next recently raised another $250 million at a roughly $4 billion valuation.

Jeff’s long-range thesis is that micro insurance won’t be bought and sold on a website, it will be included. Gilad, who left Farmers to start an embedded insurance platform, agreed: the point is to be part of the customer’s journey, not to pull them into yours, because they don’t care about insurance. Jeff pointed to hints of this in Tesla including car insurance and in Next and Amazon partnering.

APOLLO works with 10 or 11 incumbent insurers, and Jeff called it a fascinating journey. One feature that paid insurers premiums right away was sometimes unwelcome, since some insurers said they wanted a check, not automatic settlement. Jeff, as a businessperson, thinks 60 days of cash flow is meaningful, and he sees those insurers working through underwriting system overhauls such as Guidewire and Duck Creek and remote culture.

The Company’s Beginnings

APOLLO launched in April 2019, and its most recent round had its final close on December 23, about $13 million, before the holidays. Jeff spent the better part of a decade as a vice president of digital strategy, marketing and e-commerce at a traditional brokerage group, implementing CRMs and digital lead flows. His team got good at driving leads, but a team in another room still had to service them the traditional way, and online quote, bind and pay was the way to convert volume. That is the thesis behind spinning out APOLLO.

The company is about 50 employees and was already set up remotely before COVID, with laptops for everyone and Zoom and Slack from the start. Jeff said the shift has made business much more efficient: what once meant flying across the continent and driving two hours to buy someone lunch is now 30 minutes on Zoom. It also expanded the hiring pool across Canada, which he sees as a competitive advantage. He pointed to Vancouver’s talent, capital from recycled tech exits and sectors such as real estate and cannabis, while competing for talent with Amazon and Microsoft.

Strategic Investors

APOLLO’s investors include Trisura Group (a TSX-listed company), which supports the company with product, as an investor and with a board seat, and, more recently, Liberty Mutual. Jeff’s strategy is a virtuous cycle: write profitable business for a carrier, return profitable premiums, then ask them to invest. He pointed to a four percent loss ratio with one key supplier as proof the algorithms can price and underwrite well, which he sees as a differentiator from companies with loss ratio problems.

The embedded model, he said, gives APOLLO a low-cost way to reach the whole North American market without a US sales team on the ground, and entering the US was on the near-term plan.

Advice for Founders: Read the Deal Terms

Asked for hurdles he’d pass on, Jeff said that founders get excited about press releases, but the deal structure is never in the press release. APOLLO has been fortunate with founder-friendly terms, and he urged founders to pay attention to deal terms and choose investors as long-term partners. The share terms and the rest of the fine print, which no one teaches in business school, are, he said, what to evaluate when raising.

Jeff’s wish list: capacity from insurers who want to distribute products in North America, talent that embodies the values of working hard, candor and delivering, and, potentially, investors for a Series B. He believes that building a public company is the way to build a 100-year business, and insurance is an industry where you can build that longevity.

Advice: Good to Great

Jeff’s collection of wooden ships and ships in bottles, behind him on camera, is from his time as a travel writer, a souvenir he admits is a bad thing to carry in a suitcase. For his recommendation, he chose Jim Collins’s Good to Great, which APOLLO gives to everyone in the company. The team uses its lessons about candor and vigorous debate when solving problems.

Key Takeaways

• APOLLO is a Vancouver-based MGA that sells through about 2,000 brokers and through embedded integrations (about 150 deployments), with 10 or 11 incumbent insurers behind its products.
• Jeff’s thesis is that on a ten-year horizon micro insurance will be included in other experiences, not sold on a website, which is why the company is built around embedding.
• It aims at incumbents, not other insurtechs, in a Canadian P&C market of about $66 billion, with plans to enter the US.
• A final close of about $13 million came in December 2020, with Trisura and Liberty Mutual among strategic investors tied to underwriting performance.
• A remote-first setup, with swag milestones, broadened its hiring pool and kept culture alive.
• Founders should read deal structures, not just press releases, and choose investors as long-term partners.