Last week we learned that SoFi had successfully received licenses to sell insurance, adding to their current product offerings of wealth management as well as loans across student, personal and mortgages. Instead of taking on the insurance product themselves, the company will instead act as a broker.
They have partnered with Protective Life Insurance Co. and will receive compensation based on premiums sold. Protective Life was founded over a hundred years ago and as of the end of 2015 had issued $767 billion of life insurance. According to the Wall Street Journal article on the new offering, SoFi obtained a license in California to sell life insurance on behalf of Protective Life Insurance. SoFi has also received licenses in Arkansas, Florida, Massachusetts, New York and South Dakota.
For SoFi, entering into life insurance is a natural expansion. They have a significant borrowing base of over 175,000 people and can now book revenue by cross-selling their existing customers this new product. The vision for the company is clearly to be the one stop shop for any type of financial product a consumer may need. This is what sets SoFi apart from many other companies in the online lending industry. While some companies have expanded into some new lending verticals, SoFi has entered into wealth management and now insurance. They continue to have the broadest set of product offerings and it will be interesting to see what’s next for the company. The company is currently looking to raise around $500 million and according to CEO Mike Cagney is looking at expanding into Europe and Asia as well.