Propeller Bonds is a fully automated end-to-end underwriting platform company. Pulse 2.0 interviewed Propeller Bonds co-founder and co-CEO Aaron Steffey.
Aaron Steffey’s Background
Steffey grew up surrounded by insurance as his parents ran a small insurance agency. Steffey said:
“I completed my undergraduate studies at the University of Mississippi and received my MBA at Villanova University. In my role as co-founder and co-CEO, I’m responsible for the company’s strategy, fundraising, and growth efforts, as well as implementing a distribution strategy unique to the industry and accelerating the business of more than 2,000 agency partners since the company’s inception.”
Formation Of Propeller Bonds
How did the idea for Propeller Bonds come together? Steffey shared:
“While working for my family’s insurance firm, I recognized a need in the market for a comprehensive solution to help agencies streamline their surety services after consulting on several insurtech product developments. In June 2020, I launched Propeller Bonds with my cousin, Chris Kolger, to solve common pain points in surety bond issuances, such as paper forms and manual processes, and revolutionize how surety bonds have been bought and sold for decades.”
Favorite Memory
What has been Steffey’s favorite memory working for Propeller Bonds so far? Steffey reflected:
“This isn’t a specific memory, but there are many decisions that all build on one another that we took when launching Propeller. I’d say the overarching decision I made in my life that has helped me the most is focusing on networking. That means building a network, extending my network to others, and meeting people from all walks of life and career backgrounds. I’m genuinely interested in learning from others, and I love socializing, so it came naturally and has always really paid dividends for me.”
Challenges Faced
What are some of the challenges you face in building the company and has the current macroeconomic climate affected the company? Steffey acknowledged:
“The biggest mistake is not taking time to step away from the day-to-day grind and work on the business as opposed to in the business. When a company starts to take off, you are just trying to ride that momentum wave and grow as much as possible and hire as fast as possible, but sometimes taking a step back and asking yourself simple questions, like ‘Is this the best hire or is it just convenient?’ or ‘do we need to implement technology to help us scale more efficiently?’ Or even taking the time to assess if it’s sustainable. You can get caught up in it and lose sight of the overarching vision of the company.”
Core Products
What are Propeller Bonds’ core products and features? Steffey explained:
“A fully automated end-to-end underwriting platform, Propeller provides access to over 7,000 surety bonds, including contract, commercial and fidelity bonds, along with a fully customizable experience for carriers and agencies to streamline all surety needs. Propeller’s hassle-free digital platform serves insurance carriers with an automated solution for bond distribution, underwriting, billing and issuance with no upfront costs and zero backend fees.”
Evolution Of Propeller Bonds’ Technology
How has Propeller Bonds’ technology evolved since launching? Steffey noted:
“It’s night and day from launch. We’ve continued to listen to our agency base and take their feedback to improve upon our product. Additionally, we’ve had many releases of our products, all with new features from the customer perspective, but much of it is also done on the back end to make our underwriters much more efficient.”
Significant Milestones
What have been some of Propeller Bonds’ most significant milestones? Steffey cited:
“Since its inception, Propeller has been focused on the $6 billion surety and fidelity bond market and has provided surety services to more than 2,000 agency partners. Moreover, we announced our $6.4M seed funding raise in January 2023, which was led by industry experts who understand the company’s vision and want to accelerate its growth. Today, Propeller remains the only million-dollar surety underwriting program in the country.”
Customer Success Stories
Can you share any specific customer success stories? Steffey highlighted:
“There have been several instances where a customer needs a bond in a pinch and, with the help of our platform, they are able to get it on their mobile device and submit it within minutes. While it may not sound as exciting in this day and age compared to other products, it’s revolutionary in the surety world. We were among the first surety brokers to offer live bonds to customers via text message alerts.”
Total Addressable Market
What total addressable market (TAM) size is Propeller Bonds pursuing? Steffey assessed:
“The entire surety and fidelity bond market is estimated to be about $7 billion.”
Differentiation From The Competition
What differentiates Propeller Bonds from its competition? Steffey affirmed:
“What once was an archaic line of the insurance business is now entirely digital with Propeller. Propeller supplies agencies with a free branded portal to empower their clients with self-service access to the surety market through an easy-to-use onboarding process, automated commission payments, and seamless integration.”
“Competition in the industry is undoubtedly increasing, with more insurance agencies and professionals adopting entirely digital solutions. Before the global pandemic, the surety market was a completely analog business, with agencies utilizing manual processes that delayed bond issuance, including paper forms, fax machines, wet signatures, and raised seals. Propeller is redefining the surety market space as we know it and leading the charge in the complete digitization of the industry.”
Future Company Goals
What are some of Propeller Bonds’ future company goals? Steffey concluded:
“Our goal at Propeller has always been to simplify, automate, and distribute surety bonds more efficiently for agents and carriers. Today, we continue to progress in our platform’s capabilities and API advancements to further automate smaller yet more mainstream tasks for all parties involved. We are also looking forward to announcing new business partnerships very soon.”
