Photo: Phil Vukelich
Photo: Phil Vukelich
In the wake of the George Floyd-era racial justice payback, a number of corporate organizations and venture capital firms have pledged to make diversity a top priority. However, much of what was promised in venture capital has been undone amid the massive DEI backlash over the past two years. LOOP, the auto insurance company providing honest and fair rates that are reinvested in the communities it serves, lives up to its promises and revolutionizes its industry as a result.
A public benefit corporation and mission-based insurer, LOOP uses advanced technology and incredible care to create more comprehensive insurance. Co-founder and co-CEO Keri Ann Nadeau describes the venture as a labor of love.
“We wouldn’t be doing it if it weren’t for the impact we want to see in the world,” Nadeau explained while talking about the company’s broader mission and purpose, formulated with co-founder and co-CEO John Henry. In our recent interview, the MIT graduate discussed how their company is using modern tools and social justice lenses to uncover and correct the systemic biases that persist in the financial services industry.
The way many auto insurance companies decide who to insure and for what amount allows discrimination based on unrelated driving parameters such as zip code, occupation and education, causing drivers to pay more out of pocket for unrelated factors with their driving habits or insurance needs.
“You let the math tell you the truth, and the reality is that people living in very specific neighborhoods are not at greater risk than others, but they have this disadvantage of [car insurance] are more expensive,” she said. Using AI and machine learning (ML) to eliminate the use of redlining and credit scores as rate-determining factors, LOOP helps bring financial security to historically underserved and underserved communities.
“John Mayer was born to play guitar. I was born to use statistics for social justice.”
Nadeau is a statistician by profession. Having spent 20 years working in data analytics, urban data science, and machine learning, her interest in “starting from scratch” in an industry that had only recently begun to implement certain technological innovations was sparked by her frustration with continuous the increasingly divisive nature of the US political landscape and her excitement over data that revealed useful solutions.
Watching Sunday morning news segments that continue to report discriminatory policies with unfavorable reporting on disadvantaged and overlooked communities, Nadeau wondered if better decisions could be made using modern tools and relevant data.
Inspired to create narratives and products that deliver improved experiences for affected communities, she draws on the ideas of passionate professors such as MIT’s Amy Glassmeier, chief science advisor for the Living Wage Institute, a social welfare corporation founded in 2023 for addressing inequalities that can translate DEI commitments into action. With Nadeau’s desire to make sense of numbers and find purpose in influencing his own life, the LOOP fire was lit.
Supporting communities hindered by prejudice
LOOP’s growing market share can be attributed to its differentiated underwriting process, which provides more affordable rates for members who often find themselves dissatisfied with quality auto insurance. These include more than 100 million working-class Americans who are not prioritized by larger incumbent models, which subsequently leaves them overvalued.
The company’s intellectual property is staked on a machine learning algorithm that predicts where car crashes are likely to occur and when before the accident. This data enables fairer underwriting practices and creates a repository of information that can be used in the near future to predict relative outcomes. This process, along with LOOP’s commitment to customer care, a core pillar of the business model, gives them an edge in acquisitions.
“We’re looking at tenant communities that don’t have the privilege of the housing and car package, and we’re looking at those who are immigrants, students, people who have had medical crises in their family, who are credit-impaired, 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-spot data that pushes back against the assumption that “risky” neighborhoods create “risky” drivers, LOOP is able to provide coverage to more people at better prices. “Our average customer saves about a month’s worth of rent—between $1,300 and $1,600—a year.” This “significant amount” adds to their sales hook, but also reinforces their vision of securitizing the wealth of communities that previously might not had the opportunity to be insured.
“There’s no mystery that there’s a flaw that persists.”
In addition to the work LOOP does for its members, it also creates a new paradigm, attracting diverse talent and elevating their perspectives in ways that continue to change the insurance industry as a whole. Deeply committed to hiring candidates who are representative of the populations they serve, Nadeau and Henry are intent on creating a diverse organization that truly counts and elevates all participating voices.
Studies show that companies with diverse and inclusive teams outperform their competitors. Nadeau could not agree. “100 percent of our directors and up, all the way to the C-suite, are from underrepresented groups, whether they’re women or people of color,” she said.
“The social justice movement needs people from different disciplines and different backgrounds to get behind the right cause, the right thing to do,” Nadeau suggested. She agrees that this is the kind of work that many women leaders are taking on recently as the enduring push for civil rights and justice continues.
As LOOP evolves, Nadeau plans for their teams to do the same, allowing them to continue to make the best decisions for the organization and its members. “I think it’s important to bring up people from different backgrounds who can not only generate those numbers, but also have the life experiences to share.”
Course correction with precise feedback
The idea of using authentic, lived experience for good is what informs Nadeau’s current leadership style. Naming such visionaries as CEO of ESSENCE and Chief Growth Officer of Essence Ventures, Caroline Wanga, Nadeau seeks advice from mentors who understand her struggle to fit in as herself fully. “She told me you need to repair your connection with your intuition.”
“I truly believe that I am, at least in insurance, the vanguard of 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 welcome, valued and respected. Additionally important is their comfort in engaging in difficult conversations and engaging in respectful conflict with teammates from diverse backgrounds.
“That doesn’t happen in most technology organizations,” Nadeau revealed. In an effort to support their colleagues in adopting more equitable practices, the CEO noted that they were eager to share the activities that kept their teams united and focused on a common mission. Through concepts like Fight Club and Feedback Fridays, where leadership empowers difficult conversations, Nadeau illustrates how DEI initiatives can improve decision-making.
Capital that sustainably creates wealth
To date, LOOP has helped over 25,000 members securitize assets through affordable auto insurance in the state of Texas, where domestic and international migration and Silicon Valley-led gentrification have come together 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, leveraging over $30 million in venture capital raised through funds that specifically support building black businesses and expanding access, such as the New Voices Fund , led by investor Richelieu Denis and Westbound Equity Partners, led by Sean Mendy.
Announcing a first-ever capital raising program last year, LOOP further ensures wealth creation in its serving communities by layering equity incentives and grants with local impact on top of traditional commission-based compensation structures for their “partner agents’. Reframing the carrier/agent relationship is something the founders believe is not only long overdue, but absolutely necessary as they continue to expand.
“Through this work, they can build an agency and keep money in the community itself by providing good, quality service,” affirmed Nadeau. “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 is a product in the insurance industry that is built by and for them.”
