Photo Credit: Phil Vukelich
In the aftermath of the George Floyd-era racial justice reckoning, a number of corporate organizations and VC firms pledged to make diversity a top priority. However, much of what was promised in venture capital has been rolled back amid sweeping DEI backlash over the last two years. LOOP, the car insurance company delivering fair and equitable rates that are reinvested in its service communities, is keeping its promises and revolutionizing its industry as a result.
A Public-Benefit Corporation and mission-based insurer, LOOP is utilizing advanced tech and incredible care to create more inclusive insurance. Co-founder and co-CEO Carey Anne Nadeau describes the endeavor as a labor of love.
“We wouldn’t do it if it didn’t have the impact that we want to see in the world,” Nadeau explained as she spoke of the company’s broader mission and purpose, formulated with co-founder and co-CEO, John Henry. In our recent interview, the MIT alum discussed how their company is using modern tools and a social justice lens to reveal and correct for the systemic bias that persists in the financial services industry.
The way many car insurance companies decide who to insure and for how much allows for discrimination based on unrelated driving parameters, such as zip code, occupation, and education, causing drivers to pay more out of pocket for factors having little to do with their driving habits or insurance needs.
“You let the math show you the truth and the reality is that people living in very specific neighborhoods are at no greater risk than others, but they have that layered on disadvantage of [car insurance] being more expensive,” she stated. Using AI and machine learning (ML) to eliminate the use of redlining and credit scores as rate-determining factors, LOOP is helping to provide financial security in historically undermined and underserved communities.
“John Mayer was born to play guitar. I was born to use statistics for social justice.”
Nadeau is a statistician by trade. Having spent 20 years working with data analytics, urban data science, and ML, her interest in “starting from scratch” in an industry only recently beginning to implement certain technological innovations was sparked by her frustration over the ever growing divisive nature of the U.S. political landscape, and her excitement for the data that revealed useful solutions.
Watching the Sunday morning news segments that continued to inform discriminatory policies with unfavorable reporting on disadvantaged and overlooked communities, Nadeau wondered whether better decisions could be made using contemporary tools and relevant data.
Inspired to create narratives and products that delivered improved experiences for impacted communities, she leaned on the ideas of passionate professors like Amy Glasmeier at MIT, Chief Scientific Advisor of the Living Wage Institute, a benefit corporation founded in 2023 to address inequities that can turn DEI commitments into action. With Nadeau’s desire to make meaning of the numbers and find purpose in her own life’s impact, LOOP’s fire was kindled.
Supporting Communities Hindered By Prejudice
LOOP’s growing market share can be attributed to its differentiated underwriting process that lends to more affordable rates for members who often find themselves priced out of quality car insurance. These include the more than 100 million working class Americans that larger incumbent models aren’t prioritizing, subsequently leaving them overcharged.
The company’s intellectual property is staked on an ML algorithm that predicts where car crashes are likely to happen and when, ahead of the incident. This data allows for more fair underwriting practices and creates a store of information that can be utilized in the near future for predicting relative outcomes. This process, along with LOOP’s commitment to customer care, a fundamental pillar in the business model, gives them an advantage in acquisitions.
“We look at renter communities that don't have the privilege of the home and auto bundle, and we look at those that are immigrants, students, people who have had medical crises in their family who are credit burdened, who haven't established credit yet, or who had an event in their life where their credit score went down,” she listed.
Using on the ground data that pushes back on the assumption that “risky” neighborhoods breed “risky” drivers, LOOP is able to provide coverage to more people at better prices. “Our average customer saves about a month of rent — between $1300 and $1600 — a year.” This “meaningful amount” adds to their sales hook, but also strengthens their vision of securitizing the wealth of communities who might not have previously had the opportunity to be insured.
“There’s no mystery that there's a disadvantage that persists.”
In addition to the work LOOP does for its members, it’s also setting forth a new paradigm, attracting diverse talent and elevating their points of view in ways that continue to reshape the insurance industry as a whole. Deeply committed to hiring candidates who are representative of the populations they serve, Nadeau and Henry are intentional about creating a diverse organization that genuinely accounts for and uplifts all voices involved.
Studies have shown that companies with diverse and inclusive teams perform better than their competitors. Nadeau couldn’t agree more. “100% of our directors and above, all the way up to the C-suite, are from underrepresented groups, whether they're women or a person of color,” she said.
“The social justice movement needs people from all different disciplines and from all different backgrounds to stand behind the right cause, the right thing to do,” Nadeau proposed. She agrees that this is the work that many women leaders are more recently undertaking as the enduring push for civil rights and equity continues.
As LOOP evolves, Nadeau plans for their teams to do the same, allowing them to continue making the best decisions for the organization and its members. “I think it's important to elevate people from diverse backgrounds who not only can generate those numbers, but also have the lived experience to share.”
Course Correcting With Precise Feedback
It’s the idea of using authentic, lived experiences for good that informs Nadeau’s current leadership style. Naming such visionaries as ESSENCE CEO and Chief Growth Officer of Essence Ventures, Caroline Wanga, Nadeau seeks advice from mentors who understand her struggle with fitting in as her full self. “She told me, you have to repair your relationship with your intuition.”
“I really do believe that I'm, at least in insurance, a vanguard for what the industry will look like in the next 30 years, which is much more diverse and much more female.” Her focus remains on building a corporate culture that makes people feel welcomed, appreciated and respected. Additionally important is their comfortability with participating in difficult conversations and engaging in respectful conflict with teammates from different backgrounds.
“That doesn’t happen in most tech organizations,” Nadeau revealed. In an effort to support peers in their adoption of more equitable practices, the CEO remarks they’ve been eager to share the activities that keep their teams united and focused on a common mission. Through concepts like “Fight Club” and “Feedback Fridays,” where leadership opens the floor to have difficult conversations, Nadeau illustrates how DEI initiatives can enhance decision making.
Capital That Sustainably Creates Wealth
So far, LOOP has helped over 25,000 members securitize assets through affordable car insurance coverage across the state of Texas, where domestic and international migration and Silicon Valley-led gentrification have converged to form a perfect starting point for the company’s core initiatives. Over the next 18 months their goal is to expand to 3-5 more states using the over $30 million worth of venture capital raised with the help of funds that are expressly supportive of Black business building and expanding access, like the New Voices Fund, led by investor Richelieu Dennis, and Westbound Equity Partners, led by Sean Mendy.
Announcing a first-of-its kind equity-upside program last year, LOOP is further ensuring wealth creation in its service communities by layering equity incentives and local-impact grants atop traditional commissions-based compensation structures for their ‘Partner Agents.’ Reframing the Carrier/Agent relationship is something the founders believe is not only long overdue but entirely necessary as they continue to expand.
“Through this work, they can build agency and keep money in the community itself by providing a good, quality service,” Nadeau affirmed. “I want LOOP to be a household name just like Geico. I don't want to do the stupid commercials,” she joked. “But I want people to know that there's a product in the insurance industry that's built by and for them.”
