Bring Value First, and the Deals Follow

Gil Arazi began the conversation with a confession: before he played guitar and piano, he was a violinist with perfect pitch, something almost no one knows. Gilad, a lefty who never got past three chords on the guitar, was happy to take the credit for starting the episode with music.

The business story is less likely to be guessed. Gil is a CPA based in Tel Aviv who spent 21 years in insurance, as a C-level manager and board member at three of Israel’s top insurers (Migdal, Phoenix and Clal) in business, innovation and IT roles, finishing as CIO of Clal. About five and a half years before this recording, he left to start FinTLV Ventures.

About Gil Arazi

Gil Arazi is the founder and managing partner of FinTLV Ventures, an insurtech-focused venture fund based in Tel Aviv with global reach. Its portfolio, per the episode notes, includes wefox, Sweetch, Corvus, Unqork, Next Insurance, Hippo, Akinova, Sproutt, mailo and Foretellix.

From a $40 Million Fund to a $500 Million Platform

FinTLV closed its first fund in September 2018 at around $40 million, and by this recording it was already investing out of its second fund, with about $500 million of assets under management after less than three years of investing. Gil was clear that the fund isn’t the real story. The real asset is an ecosystem built over nearly six years: insurers, reinsurers, MGAs, brokers and startups from around the world, about 150 insurers in all, working to bring value across the insurance value chain.

Whenever he sees an opportunity for part of that network, he passes it on without asking for anything, on the belief that value shared comes back later. He also credits luck, and the pandemic. Before COVID, being a global fund meant offices in New York and Asia. Once everyone worked from home, domain expertise mattered more than location, which let a Tel Aviv fund sit in the same row as VCs anywhere, and most of its investments are in US companies.

How a Fund Gets to Lead Next and Hippo

Gilad asked how a small, Israeli fund ended up leading rounds in Next Insurance and Hippo. Gil’s answer was practical. FinTLV invested first in an earlier Next round alongside Google, built a relationship and showed its value, and so was the natural lead for the next one. Because the team already knew the company, due diligence on a large round took only four to five weeks.

What FinTLV offers portfolio companies, Gil said, comes from his operating background: better reinsurance treaties and ceding commissions, help raising further rounds and capital, building debt facilities, and, for one portfolio company, setting up a new captive in the US to give it more risk capital to hold on its balance sheet. The fund has no maturity limits, from an early-stage investment to participation in rounds of companies that later went public.

The Trends He Is Betting On

Gil described several global trends shaping the portfolio:

• Prevention over catastrophe handling. Insurers across P&C, life and health are shifting toward preventing losses. He cited Hippo giving every insured home a set of IoT devices to catch leaks, and the same logic in health and life, which began with programs such as Discovery’s Vitality. This is why FinTLV invested in Sweetch, an early-stage digital health company that helps prevent diabetes, and is taking it to reinsurers to build products on top of it.
• Specialty lines, especially cyber. He backed Corvus because he believes cyber is only at the beginning.
• Health. A large shift is coming in the actuarial and data foundations of health insurance.
• Asia, embedded and parametric insurance. Where most of the activity in embedded insurance is happening.

The Case for Embedded Insurance at Scale

Gil argued that insurtech’s opportunity is larger than fintech’s, pointing to a global insurance market of $7 to 8 trillion in premium, a large underinsured population, and near-universal internet access by 2025. He said that in the next seven to eight years, global embedded insurance could represent about $3 trillion in annual premium, and offered Asian examples to back it up: Alipay’s embedded insurance platform sold about $8 billion in premium last year, WeChat’s about $4 billion, and ZhongAn sells billions of policies a year at an average premium of around 30 cents.

He doesn’t see it as something confined to Asia. He cited Uber selling embedded insurance in the UK, product warranties sold with goods, and Tesla selling insurance with its cars, and mentioned an unnamed portfolio company aiming to be the leading US embedded and parametric player.

Gilad, who ran an embedded insurance startup that closed after two years at the start of COVID, pushed back with a distinction. WeChat owns the channel; most embedded efforts have to partner into someone else’s. The model works when you are already inside the customer’s journey and the question is just whether to check a box, and the real game is zero customer acquisition cost. Parametric products fit well, because they have little friction, automate claims, and are usually short-term, so losses are easy to control.

Advice: Lifespan, and Go to Concerts

For his closing recommendation, Gil chose Lifespan by David Sinclair, an audiobook about why we age and why we don’t have to, which he sees as part of the longevity trend reaching insurance. His second recommendation: now that people are getting vaccinated, go to as many concerts as you can. Entrepreneurs who want to reach him can email him directly, and he said FinTLV is happy to make introductions to insurers whenever it fits, with no ask attached.

Key Takeaways

• FinTLV grew from a $40 million first fund (first close in September 2018) to about $500 million in assets under management in under three years, built on a network of about 150 insurers.
• Gil’s rule: bring value to the ecosystem without asking for anything; it comes back later.
• The fund won the lead in Next and Hippo by investing early, proving it adds value, and then moving fast, with diligence taking four to five weeks.
• Hands-on help from an ex-insurance executive, such as reinsurance terms, debt facilities and captives, is the differentiator for portfolio companies.
• Prevention is the dominant theme across P&C, life and health, which is why a diabetes-prevention startup sits in an insurtech fund.
• Gil projects about $3 trillion in annual embedded premium within seven to eight years, citing Alipay, WeChat and ZhongAn, and sees the same shift already underway in the US and Europe.
• Embedded and parametric products win on zero acquisition cost, low friction and short tail.