I was told this story at Bemelmans Bar last week, and here it is—briefly. The owner of a New York funeral home shared how cremation has been hurting his business, but at his age, he’s okay with working less. He also mentioned that commercial auto insurance has been a major headache. He was satisfied with Company X until one of his drivers had an accident he hoped to settle privately. The other party refused, and the claim went through. Company X raised his premium, so he considered switching to Progressive, but their quote was $4,000 higher. In the end, he went with Farmers.

The twist?

He changed his company’s name before securing coverage with Farmers. Progressive knew something that Farmers didn’t. So did we—and that’s that Farmers’ Toyota partner is working with Lemonade.

Toggle, a Farmers brand, launched in 2018 during a wave of millennial-focused insurance brands. While others like Traverse by Travelers, LINK by Prudential, and Haven Life by MassMutual have faded away, Toggle has stayed active, expanding from renters insurance to home and auto. Its pet insurance redirects to Pets Best, which is about to face challenges in California, but that’s another story. Beyond its direct channel, Toggle partners with agencies and third parties, including BenefitStore, Better Cover, Venbrook Insurance Services, Way.com, and, most notably, Toyota Insurance Management Solutions (TIMS). Toyota Auto Insurance, distributed by TIMS, is available via its website, mobile app, call centers, and participating dealerships, underwritten by various Farmers companies, including Toggle Insurance Company.

Toyota’s current insurance offering launched in 2016, but its involvement in insurance dates back to 1985, beginning with extended warranties. By 1991, with around 1 million cars sold annually and 20% of customers buying service agreements, Toyota was already considering auto insurance. Today, with more than double the annual sales, the potential is even greater. However, warranties and auto insurance are different beasts. Toyota’s move into home and renters insurance signals a need to diversify—a move seen before. But when the opposite happens, it’s rarer.

See Sigo.

Six years ago today, we covered Sigo, and there wasn’t much to report. At that time, it was a Philadelphia-based digital broker selling car insurance in Pennsylvania. Customers could enter their information to request a quote, but not in real time. Instead, they received a welcome email, with a promise that a representative would follow up with a quote. By 2021, Sigo launched its own car insurance product in Texas, removing “biased rate factors like credit score, employment history, and level of education” from its underwriting process. It also operated as a broker in California and New Jersey, representing various insurance companies, with plans to expand (of course). Today, Sigo only insures drivers from Texas.

Recent state filings indicate that Sigo has reached approximately 7,470 policyholders, with a written premium of $42.3 million, representing a 206.5% increase from the $13.8 million in direct written premium reported by its carrier, Old American County Mutual (OACM), in 2023.

The twist?

This month, OACM appointed Clearcover General Agency, marking Clearcover’s entry into the non-standard auto insurance market in Texas.

Clearcover originally launched in the state around November 25, 2019. Texas remains Clearcover’s top state by premium written. By 2022, Clearcover had grown to 15,209 policyholders, and by the end of 2023, it expanded further to 21,899 policyholders, reporting $53 million in direct written premium, up from $42.3 million in 2022 (where Sigo currently stands, albeit with a different market focus).

Clearcover’s shift in focus is accompanied by adjustments in its underwriting strategy. In state filings, the company is proposing changes to its car insurance underwriting guidelines in Georgia and Arizona to “increase the availability” of its auto insurance products to a broader customer base. Georgia, Arizona, and Texas together account for over 50% of Clearcover’s book. The changes involve the removal of certain underwriting rules related to limited or nonexistent insurance history.

Connections often precede coincidences. Clearcover is targeting the non-standard market just as its investor, American Family, sells one of the top non-standard auto insurance brands, The General, to Sentry Insurance. Stated simply, Sigo is doing a better job than Loop, and Clearcover wants another job.

In late 2019, Toyota leader Kenta Kon was asked whether the company was pushing changes too quickly, with the interviewer noting, “If there is a sudden change, of course, there will be pain.” Those who embrace change are often the ones driving it, but just because you welcome it doesn’t mean you can deliver it. For now, Clearcover keeps climbing the mountain – at half its size – and with a focus on half its market.