Why We Invested in Harper
In a world of increasingly frequent and severe risks, excess and surplus insurance (or “E&S,” the market for insuring non-standard risk profiles) has quietly become one of the fastest-growing corners of financial services, expanding 250% since 2018 to over $135B in gross written premium (”GWP”). New risks — climate change, supply chain uncertainty, autonomous vehicles, AI agents and others — are breaking old regulatory structures and challenging legacy underwriting models and operating processes, forcing unprecedented change and fresh thinking in the insurance industry.
At Optimist Ventures, we see E&S lines as the new normal in insurance concurrent to the rise of the AI-native enterprise. AI — when architected carefully and deployed thoughtfully — has the potential to scale revenue far ahead of headcount. AI agents that autonomously perform complex functions can augment human capacity, reducing stress and uncertainty, and improve accuracy and speed. We are seeing AI create unprecedented, capital-efficient scale across industries.
In insurance, we proudly believe Harper Insurance has positioned itself well to ride these the E&S and AI waves.
Why Harper?
Harper is an E&S insurance brokerage, built from the ground up with AI-enabled scalability at its core. For many traditional insurance brokers, a website, a type-form and sets of manila-folders are the bleeding edge of technology adoption. Harper is architected differently.
The Harper Hub aggregates data across phone calls, emails, and broker-AI agent conversations to reduce application time by more than 50%. Manual, back-office tasks are fully automated, leaving brokers to pursue what drives true value: building client relationships. Here are three reasons for why we see Harper as pace-setting the future of insurance.
1 — The “Lean AI” Insurance Archetype
While companies like Cursor, Mercor, and Lovable have popularize the “lean AI” playbook, the notion of a hyper-efficient, high-revenue, low-headcount insurtech is more novel concept. In Harper, we saw a company trailblazing this trend, scaling ARR to $1M+ in only 6 months post-launch with per-FTE efficiency unit economics far surpassing those of 100-year old companies, like Gallagher, Aon, and Marsh while projecting little to no customer turnover.
To address market demand, carriers and brokers have largely increased headcount (see below).
While not in and of itself a negative, growth in workforce has coincided with tech under-enablement, leading to notable rises in combined ratios, compounded by the recent hard market cycle.
While not in and of itself a negative, growth in workforce has coincided with tech under-enablement, leading to notable rises in combined ratios, compounded by the recent hard market cycle.
With P&C IT spending slated to increase dramatically, we believe the nature of large brokerage workforce enablement will change more dramatically in coming years relative to those prior, with many taking pages from the Harper playbook.
As AI enables anyone to create software, defensibility increasingly lies in speed of execution, careful architecture of workflows, and irreplaceable client relationships. Early in its founding, Harper set its sights on automating manual submission prep, quote comparison, and service tasks consuming over 40% of a broker’s time — all built on a common, modern data infrastructure. We see a flywheel starting with customer experience and data driving further scale and automation.
2 — Redefining The Brokerage Stack
Today’s insurance broker tech stack paints a dour picture. Two companies — Applied Systems and Vertafore — both 40+ years old — dominate 90%+ of the P&C broker management software market. Manual data extraction and re-entry is rampant in these brittle systems, but these legacy systems persist due to high switching costs and operational dependencies.
Harper, like the best AI-native businesses, takes a clean-sheet, vertically-integrated approach to infrastructure. While incumbent carriers and brokers face a bumpy road ahead in retrofitting legacy tech stacks with AI point solutions, Harper’s core model is purpose-built for today, with growth driving PE-style margin uplift and SaaS-style Rule of 40 metrics.
Most excitingly, we are beginning to see indications that any brokerage with sufficient automation becomes a hyper-efficient marketplace, with network effects and economies of scale driving a winner-takes-most outcome. As Harper’s underwriter matching capabilities improve with higher volumes of data, wholesalers come to prioritize its policies, further increasing throughput. the E&S market proves especially fertile for this model, with policy approval and underwriting previously being deeply labor-intense and slow.
3 — Founder-Market Fit
At Optimist, we seek ‘multilingual’ team with deep domain expertise in the target sector, bleeding edge AI engineering capabilities, and early-stage operating experience. In Dakotah and Tushar, we saw tech-forward, but insurance adept across prudent underwriting and responsible scaling. Growing up in Alabama, Dakotah learned about the insurance broker market through family business and later served as an investment professional at Carlyle and Coatue, after 3 years at Goldman Sachs. Tushar met Dakotah at Goldman while working as VP of Engineering on AI/ML products, leading the digital transformation of the asset management business for 8 years. With GTM led by Kasim Abdullahi, a close friend of and advisor to Optimist, we are excited for the road ahead.
We are thrilled by the opportunity to support Harper’s amazing, path-breaking growth and relentless focus on client experience while bringing the brokerage into the modern age.