What to know about Workrise co-founder's plan to bring AI to insurance with new startup
Mike Witte has always loved relationship-based business.
He built his career in the startup space by co-founding RigUp, a workforce management platform aimed at supporting smaller oil and gas companies. The company has since rebranded to Workrise and achieved unicorn status with a valuation of nearly $3 billion.
Witte told the American-Statesman the crux of the business is services and relationships, which he says is the same for his new startup.
That startup, Equal Parts, launched last month with $10 million in acquisition capital led by Equal Ventures and Max Ventures, and it plans to bring artificial intelligence to insurance.
Witte said the insurance industry has a "technology ecosystem problem," with independent insurance agency owners being consumed by office tasks and using outdated technology systems. That's where Equal Parts comes in, with Witte wanting to improve speed and make the industry more innovative by using AI.
"We believe that the future of insurance is equal parts innovation and relationships. It's equal parts technology and tradition," Witte told the American-Statesman. "Those things have to be bridged together, and we want to be that bridge."
To do this, Witte's new startup plans to acquire smaller insurance agencies and supercharge them with AI, not to replace human agents, but to enhance the backend technologies and improve connection.
On Wednesday, Equal Parts announced its first acquisition, Austin-based Lumen Insurance Technologies LLC.
Lumen Insurance, which was founded by David Perez in 2016, is a commercial insurance agency focused on serving Austin's tech startup community.
"Lumen is the epitome of what we were looking for," Witte said. "It was strong client relationships, very specialized. ... It's a great starting point for us. We get a phenomenal human being in David Perez, but we also back to the thesis. We've got a client base that he serves that's very tech forward, combined with a bunch of Austin businesses, and it just checked all the boxes for what we're looking to do in the Austin community."
Witte emphasized that addressing the technology and connectivity issues in the insurance industry is crucial for its future. He described the current technological challenges as a "death by a thousand cuts."
According to the U.S. Chamber of Commerce, about half of the current insurance workforce is expected to retire over the next 15 years, leaving more than 400,000 positions unfulfilled. The industry, according to the U.S. Bureau of Labor Statistics, is also seeing an unemployment rate nearly half the national average.
Witte said this is, in large part, due to the lack of connectivity and innovation with the industry's necessary point-to-point management systems.
With its first acquisition, Equal Parts plans to help Lumen build and scale a "highly connected back end" by linking point-to-point systems together. With this highly connected back end, Witte said Equal Parts plans to leverage AI to automate the systems, so agents can get back to "what they should be doing, which is talking to clients."
"A lot of that, to me, is just the legacy nature of the business and how work gets done," Witte said. "It's not necessarily attractive and appealing to young folks that want to be in a more innovative environment. I do think that Equal Parts, we need to be a brand, a company and an employer that provides that avenue for younger folks to get into insurance, that want to be a part of the more innovative work environment. It's certainly what we what we hope to cultivate."
This article originally appeared on Austin American-Statesman: Workrise co-founder's new Austin startup acquires Lumen Insurance
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