Fintech Innovate

This Insurance Startup CEO Wants to Change How We Use Insurance (And He Just Raised $90M to Fulfill His Vision)

Dan Preston, CEO of Metromile, thinks the current model of insurers making decisions six months in advance is an outdated approach, and he’s on a mission to change how we pay for insurance, starting with auto insurance.

Preston is no stranger to jumping into industries with many unknowns.

He was the CTO & Co-founder of AisleBuyer, an early pioneer in mobile payments. AisleBuyer was acquired by Intuit to help them develop superior payment products.

Now, with Metromile, he’s up against a much different, and much more complex challenge changing the way we pay for insurance.

Preston, with a master’s in computer science from Stanford University and several published research papers on machine learning, thinks the insurance world is a prime industry to make an impact.

I’m a big fan of people who go against the grain, so I was excited to sit down with Dan to get his perspective on innovation in insurance.


In a recent study, McKinsey research found that 35% of the insurance workforce will disappear due to automation. While it’s true that insurers are turning to automation to find efficiencies, employees are still needed to run an insurance company. This creates a wide opening for startups to begin from the ground up and to not just think about building an efficient machine, but to change how insurance is digested.

What comes to mind when you think of car insurance?

Six-month premium that only seems to go up year after year? Tiny pieces of paper you have to cut out and restock in your glove box?

Or, if you’re like 65% of Americans who drive 12,000 miles or less per year, the fact that you spend way too much money on insurance for the minor amount of time you actually drive.

Rather than overpaying for insurance most Americans don’t need, Metromile has introduced the first ever pay-per-mile auto insurance offering to the mainstream market.

Despite a large number of well-established incumbents currently inhabiting the space, Metromile has managed to captivate the minds of investors to the sum of $295M, including a recent funding round totaling $90M.

“For most of human history, we’ve had to rely on public records and what someone else tells us when evaluating risk. And then those prices just go up with inflation and costs.

In the last decade, sensors have begun to populate every vehicle around the world, now giving us a real-time understanding of safety and accidents. This fundamentally changes how insurance companies deliver products and the savings, in both time and money, must be passed on to our customers,” says Preston


The premise of Metromile is based on the wisdom of a century-old notion known among top insurers: The number of miles driven directly correlates to the number of car accidents.

However, what insurers 100 years ago didn’t have was access to something better than self-reported mileage.

Enter Metromile.

Telematic devices that are capable of tracking variables such as miles driven, braking habits, and other driving data have allowed insurers to begin tracking mileage in a way that is not only easier, but more cost effective as well.

This cost savings is then passed on to the customer, making the price of auto insurance for a majority of drivers much more affordable.

The biggest challenge for insurance companies is the fact that low-mileage customers are subsidizing higher mileage drivers, who file more claims on average. So, if traditional companies offer pay-per-mile insurance, they would effectively cannibalize their most profitable business.

So, what does an emergent company breaking into the industry do to gain consumer trust while in competition with much larger companies with much larger customer footholds?

“Metromile exists because of a feeling of unfairness with traditional insurance and the emergence of incredible new technology. From day one, our core principle has been to build a fair, transparent insurance product that provides the right price for the right customer. Any data our customers share with us should be used to their benefit — to make the claims process simple, to provide savings, to help in ways beyond most traditional car insurance providers.”


“For incumbent insurance companies, the insurer gets a single chance to price with a narrow view of a customer, and then use this in the best way possible to predict what the next six months should be priced. These ‘snapshots’ are short-lived and can penalize drivers for incidents, such as minor accidents, without giving them much of a chance to reduce their rate over time,” says Preston.

Metromile is fundamentally different because they view customer data as real-time input. In other words, the products naturally emerge from the ground up by providing policies, rates, and claims that work much differently than the current insurance incumbents.

By capturing data in real time, they can build their infrastructure solely around the customer experience. The process never relies on outdated models of analyzing claims based on algorithms. Instead, real-time data is the only ingredient in Metromile’s claims recipe.

Metromile still relies on experts and enhances the experience for customers by constantly improving their novel approach to how they collect, use, and optimize driver data.


“Insurance needs to be more than just a place to go when things go wrong,” says Preston.

Metromile currently provides features that help customers avoid parking tickets (available in select cities), diagnose car issues, and find their cars in case they forgot where they parked. They also incentivize device use by providing more expedient services to customers who opt-in to using device data during a claim, such as automated payments that occur faster to lessen the stress for customers anxiously awaiting payment.

Instead of being reactive, Preston suggests that their company’s strong suit is in being able to proactively guide their customers to make informed decisions about aspects other than just safe driving.

This proactive approach makes the service seamless and allows customers to trust the up-and-coming company.


Dan Preston explained the vision of where Metromile will be heading in the future:

“For us, in many ways, per-mile insurance is a first step toward allowing us to create a better tailored insurance product for all drivers. The sensors in the car allow for a better insurance experience based on real input and actual data.

The same set of data can be really helpful in assessing and managing risk in other parts of your life as well. We help you avoid the risk of getting a parking ticket or getting ripped off by a mechanic, because we can give you information that ultimately extends beyond just personal insurance. Metromile’s core mission is to find better ways to manage risk.”

Preston also mentioned there are a few misconceptions that Metromile has had to address in order to persuade customers to make the switch.

Misconception Number One:

I’m not sure I drive low enough miles to save money.

Most Americans (65%) drive less than 12,000 miles per year. And if you are one of them, (even daily commuters rarely drive more than 1,000 miles per month), you can save some serious cash by switching to Metromile’s pay-per-mile option.

Misconception Number Two:

Does this replace my personal auto insurance?

Yes. Metromile meets all of the major regulatory compliances and keeps a strong staff of industry experts in order to offer a more affordable option that can replace your current personal auto insurance.

Another great thing about Metromile is that they have the exact same coverage as the bigger companies. Which means your claim will get paid the same way as any other insurance company, but likely faster given Metromile’s AI claims process.

Misconception Number Three:

Are traditional insurers safer than startup insurers? AKA what happens to my claims if something happens to the company?

In order to ensure success and further protect its customers, Metromile has reinsurers and capital partners in place, as well as meeting all of the regulations that larger incumbent insurance companies currently must meet.

With the pay-per-mile model benefiting more than half of all drivers, it seems pretty certain that Metromile is the biggest thing to hit the auto insurance industry in recent years. Old models are failing low-mileage customers but pay-per-mile is here to stay.


The fact that Metromile is able to reduce the cost of insurance isn’t where the company’s mission stops. Instead, they go far beyond the normal capabilities of what most insurers are able to do.

Over the years, they’ve educated their market and refined their value pitch. As early adopters started telling their friends, the idea caught momentum. And new growth created new opportunities for them to better serve their products in an already crowded market.

Metromile is still a startup in many respects, but is as strong as a traditional insurer.

Metromile meets all of the regulatory compliances, and they want you to know that getting paid works the same as with other insurers, only it’s all automated and much faster.

Preston ended the interview with this quote: “In many respects, we just got started. How you get insured is changing, and we’re happy to help pave the way forward. As sensors and machine learning begin to pervade every product and service across the world, it’s going to make it easier, cheaper, and more fair to manage one’s risk. This is what we’re betting on.”

Thank you, Dan, for a great interview.

RapidValue Solutions

Written by

RapidValue is a leading provider of end-to-end mobility, Omni-channel, IoT, AI, RPA and cloud solutions to enterprises worldwide.

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