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Koffie Labs raises $4.5M to transform trucking carrier insurance

(Koffie Labs co-founders Mike Dorfman and Ian White. Photo: Koffie Labs)

Startup claims commercial vehicle insurance doesn’t work for policyholders or providers

Koffie Labs, a New York City-based insurtech startup focusing on commercial motor vehicle insurance, announced Tuesday morning that it has raised $4.5 million in two seed funding rounds led by Anthemis Group and Lerer Hippeau.

Ian White, chief executive officer, and Mike Dorfman, chief operating officer, founded Koffie in 2017. Dorfman has deep roots in the trucking industry, growing up and working in his family’s fourth-generation trucking and logistics insurance provider. White is an entrepreneur with previous tech startup experience.

Koffie Labs was born out of a simple fact about commercial vehicle insurance: It keeps getting more expensive for truckers, but it still isn’t profitable for insurers. One of the significant hurdles in trucking insurance is an outdated way of assessing and pricing risk, based on only the most general characteristics of a given fleet. Historically, risk has been assessed and insurance policies have been priced with little regard for the aftermarket telematics installed on a truck or the driver-assist technology built by the OEM.

By creating more detailed risk models based on approximately 100 characteristics of the physical trucks themselves, Koffie wants to give fleets credit for installing safety technology and control losses on the insurer’s side. White said the capital will be deployed in product development and hiring; Koffie currently has about 10 employees.

“Fundamentally we bring a wealth of data to the occasion, including 3 million truck crashes and 100 million federal inspections,” White said in an interview with FreightWaves. “So far, the industry has worked on heuristics, and it’s failed. Can we get more granular?”

Most insurance companies price coverage based on a trucking fleet’s operations in aggregate, but Koffie gets down to the specific vehicle level. Why does that matter? Because the safest trucks on the road are approximately three and a half times less likely to get into an accident resulting in bodily injury than an average truck, White said.

While traditional insurance carriers look at essentially one risk factor for the truck, one for the driver and one for operations, Koffie’s models take into account everything from axle configuration and make and model to crash avoidance technology, driver coaching and market- and vehicle-level operational data, White said, That allows Koffie to slice the trucking industry into 10 tranches of risk.

Developing unique risk profiles for every single physical truck and then surfacing patterns hidden in a vast lake of crash and inspection data is quite a task, but White and Dorfman want to also build significant automation inside the insurance operation itself.

Dorfman said that when he went to work in his family’s business, he was surprised to have to learn how to use a fax machine and a typewriter. The process of generating a quote for a carrier was labor intensive, carried out with pen and paper, and could take as long as 90 days, he said.

“I saw instances where we started a quote a quarter before a trucking company’s policy was expiring and still couldn’t find a home for it,” Dorfman said. “It was extremely frustrating from my perspective and the insurance company’s perspective and eventually led to insurance carriers pulling out of the market because they couldn’t get enough rate to make the business profitable. It felt like nobody was happy.” Koffie says that it can deliver truckers quotes for insurance in a day, partly by prepopulating 80% of a given carrier’s application through the data it’s already collected.

But in many ways, Koffie’s innovation comes back to assessing and pricing risk in a different way than the rest of the industry. White said that while fleets are sold new safety technology, like video telematics or driver-assist technology, the products often come with the promise that they will help lower the carrier’s insurance burden. But when the fleet owner shows off his new tech to an insurance provider and asks for a discount, he finds his rates haven’t budged.

“Foundationally, for me, insurance companies were fundamentally unable to differentiate a good trucking risk from a bad one,” Dorfman explained. “What I saw oftentimes was insurance carriers that weren’t specialized and didn’t really know how to underwrite it properly. There hasn’t been any innovation in decades in terms of underwriting factors and processes in this line. For us, the remedy is looking at fleets at a granular level and looking at safety technology. We’ve seen that work in personal vehicles for a long time, but a lot of those rating factors are simply left out of the equation [in trucking].”

By tracking more individual attributes for every truck and measuring the performance and risk of those trucks over time, White and Dorfman believe that Koffie will have an advantage over other insurance carriers as autonomous vehicle technology becomes more robust and widespread. Whereas traditional insurance providers will be tasked with creating an entirely new risk model that takes an emerging technology into account — a technology they haven’t gathered their own data on — Koffie sees AV technology as a suite of hardware and software technologies that it already assesses and prices independently.

“If we saw a vehicle five years into the future, we could break it down into hardware, software, ask ourselves where we’ve seen those things before and assess it against historical data that we already have,” Dorfman explained.

Koffie’s focus on commercial motor vehicle insurance is grounded in deep family history and a passion for all things trucking that even led the co-founders to enroll in truck driving school.

“The better you understand this 80,000-pound piece of metal, the better you can understand the price risk,” White said.


  1. Sam Jones

    Long past due way of thinking I will be passing this on to my dispatchers.
    Hopefully they will follow up with this and I too will stay on top of it.

  2. Bernardo

    But a safe truck does not matter as much as the driver behind the wheel. So many young and inexperienced drivers on the road that shouldn’t be. Then there’s recent cdl grads who won’t even get a chance to drive because of their MVR. A bad MVR does not always mean the driver will cause accidents, anyone even experienced drivers can be involved in an accident. Theres just so much that insurance policy plays a part in the trucking industry. Without insurance, there can be no growth in trucking. But to say you need a new truck to be efficient and safe is just wrong.

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John Paul Hampstead

John Paul conducts research on multimodal freight markets and holds a Ph.D. in English literature from the University of Michigan. Prior to building a research team at FreightWaves, JP spent two years on the editorial side covering trucking markets, freight brokerage, and M&A.