The San Francisco-based company teamed up with Lemonade and Root, adding three types of insurance to the company’s existing portfolio. An integration with New York-based Lemonade will provide home and renters insurance, while Ohio-based Root will offer an auto insurance option.
Until this month, SoFi’s insurance offering was limited to life insurance, a product made possible through a partnership the company initiated in 2018 with California-based Ladder.
“Protecting yourself and your assets is a critical and often overlooked piece of your overall financial well-being,” said Anthony Noto, SoFi CEO. “People come to SoFi to get their money right, and we’re pleased to now provide them with more tools to be able to do so by partnering with companies that share our values in ease of use, transparency, and efficiency.”
The new insurance offerings aim to be simple to understand and transparent about pricing and benefits, without agents, middlemen, or phone calls. SoFi said that its client base requested more affordable insurance offerings. Over the past year, the company counted 8,000 conversations between financial planners and under-insured or uninsured clients.
Lemonade uses AI to craft an insurance policy tailored to each customer. With the company’s chatbot interface, users can select and start their coverage in 90 seconds. The charge is structured as a flat fee– homeowners insurance starts at $25 per month and renter’s insurance starts at $5 per month– and claims are paid in three minutes.
With Root’s auto insurance, drivers can potentially save up to 52% over their current coverage. The company uses data from clients’ smartphones to measure driving behaviour and habits, offering better rates to better drivers. “Our priority at Root is to put the power back into consumers’ hands by making auto insurance clear and understandable,” says Alex Timm, Root Insurance co-founder and CEO. “We’re excited to partner with the SoFi team as a means for members to have access to more affordable, accurate and fair auto insurance.”
To boost interest in its existing life insurance product, SoFi announced it is offering $25 for life insurance applicants to invest in stocks, ETFs, or SoFi’s roboadvising. This comes as a response to research findings that indicate that millennials are misinformed about the costs and benefits of life insurance.
Founded in 2011, SoFi offers a range of millennial-focused financial products and resources. SoFi’s addition of the new insurance offerings “fulfills its ability to offer members every financial product they may need at any stage of life.”
SoFi has raised $2 billion from 29 investors across 11 rounds of funding.