I’ve got a couple updated thoughts to share with you on some Real Money Portfolio companies, including answering some reader questions about when to take profits on IIPR (I’ll warn you up front, my answer is wishy-washy), but first I’ve got a quick teaser solution for your Friday edutainment.
Just today I got a teaser pitch from Tyler Laundon for his Cabot Small-Cap Confidential about a “small company disrupting a $300 billion industry” … and it turned out to be an insurance pitch, so that caught my eye.
Here’s a little bit of the tease to get you started:
“While it may not be sexy, stable market demand makes insurance big business.
“Personal lines insurance alone — cars, houses, boats, and health — is a massive $300 billion industry!
“Yet oddly there has been little real innovation in this industry.
“In general, when you need a policy you do the same thing you did decades ago: call around and talk to agents, or a direct-to-consumer carrier like GEICO (owned by Berkshire Hathaway by the way)….
“In these situations, people often devote aggravating amounts of time to dealing with insurance agents, trying to get the coverage they need or the reimbursement they expected.
“All too often insurance agents are more interested in selling new policies than servicing the policies they already sold.
“In short, this industry is ripe for disruption. And this is the company doing the disrupting!”
So he’s pitching what’s not really an insurance company, but a slightly different model of insurance agency — a service company, not one that underwrites risks itself.
And it’s got what has been the magic word lately, too: “Cloud.” Here’s more from the ad:
“The company’s secret lies in a powerful cloud-based technology platform. As in so many industries, cloud-based technology has the potential to transform the personal lines insurance market. And this company is showing how.
“The short version is that the company has centralized customer service activities on a robust cloud-based, SaaS platform then integrated solutions to handle specific activities like call center, document signing and policy comparison shopping.”
And it has been growing, apparently:
“… while the personal lines insurance market is growing in the low single digits, this breakout stock has been growing by more than 30% annually for the last three years.
“And growth is expected to accelerate to 40% this year!”
He describes this as a ...