Fernstone

What do they actually do

Fernstone is an early-stage commercial insurance brokerage that pairs licensed brokers with an AI agent to speed up routine broker tasks. Today they operate as a live brokerage: businesses request quotes, a named risk advisor manages the account, their AI helps track carrier communications and follow-ups, and a human broker reviews and binds coverage. Customers get a portal to store policies, issue certificates of insurance (COIs), track claims, and receive renewal/coverage alerts YC page, website.

In the near term, they plan to expand this “broker + AI” workflow into a more automated platform: faster COI issuance, more automated back-and-forth with carriers, richer policy dashboards, and deeper claims handling—while keeping licensed brokers in control of final decisions YC page, website.

Who are their target customer(s)

• Staffing and temp-labor firms: They place workers at many client sites and need COIs on short notice. Slow, manual broker responses cause lost placements and onboarding delays. Fernstone site
• Construction subcontractors and trades: They must provide COIs, maintain site-specific coverage, and coordinate multiple carriers. Repeated back-and-forth and missed paperwork delay job starts. Fernstone site
• Field-service and maintenance companies (HVAC, plumbing, janitorial): They run crews across many locations and clients, struggle to issue COIs quickly, track renewals, and stay contract-compliant because workflows are manual and fragmented. Fernstone site
• SMB vendors/contractors onboarding to larger customers or marketplaces: They must prove insurance fast to win bids. Lack of a single compliance dashboard and slow broker turnaround cause rejected bids and onboarding delays. YC page
• Property managers, fleet operators, and businesses with frequent claims/complex renewals: They need reliable policy tracking and claims intake. Administrative drag from renewals, billing mismatches, and slow claims handling creates coverage gaps. Fernstone site

How would they acquire their first 10, 50, and 100 customers

• First 10: Founder-led pilots with local staffing, subcontractor, and field-service businesses. Offer named risk advisors and guaranteed fast COIs to prove value and collect testimonials and workflow feedback YC page, website.
• First 50: Codify the playbook into targeted outbound and channel deals (vendor-onboarding platforms, GCs, trade associations). Standardize onboarding, publish short case studies, and add referral incentives website.
• First 100: Ship more self-serve features (instant COIs, policy dashboards, simple integrations) so marketplaces/contractors can request COIs automatically. Use carrier/broker partnerships and case studies to win larger regional accounts; add focused SEO around COIs and contract compliance YC page, website.

What is the rough total addressable market

Top-down context:

The US Insurance Brokers & Agencies industry generated about $260.1B in revenue in 2024, spanning commercial and personal lines as well as agencies and brokers, per IBISWorld—placing Fernstone’s focus (commercial P&C broking and service) within a very large market IBISWorld.

Bottom-up calculation:

Focus on COI-heavy verticals. Example: (a) Specialty trade contractors: ~592k establishments in the US; assume 25% are addressable and actively need frequent COIs → ~148k firms. If average annual premium per firm is ~$12k and broker commission averages ~12%, that’s ~$1.44k revenue per account → ~$213M. (b) Staffing firms: ASA cites ~27k staffing/recruiting companies; assume 20% are addressable (~5.4k). If average annual premium is ~$100k with ~10% commission, that’s ~$10k per account → ~$54M. Combined initial wedge ≈ $267M in annual broker revenue potential, before expanding to field services, property managers, and other COI-driven SMBs BLS NAICS 238, ASA, The Hartford commission ranges.

Assumptions:

• Addressable rates (25% of specialty trade contractors; 20% of staffing firms) to reflect COI-intensive operations and realistic serviceability.
• Average annual premiums: ~$12k for small trades; ~$100k for staffing, acknowledging variability by state, class, and loss history.
• Broker commission averages ~10–12% across key commercial lines, consistent with carrier disclosures (ranges vary by line) The Hartford.

Who are some of their notable competitors

• CoverWallet (Aon): Digital commercial insurance broker for SMBs with online quotes and policy management; now part of Aon, giving it scale and carrier access.
• Embroker: Online commercial insurance brokerage focused on startups/SMBs with digital applications and specialty programs (e.g., tech E&O).
• Simply Business (a Travelers company): Online broker for micro and small businesses with quick quoting and policy issuance across multiple carriers.
• Next Insurance: Digital carrier focused on small commercial lines with instant COIs and online policy management; competes for similar COI-driven use cases.
• Pathpoint: Digital E&S brokerage platform for SMB risks; streamlines submissions, quoting, and binding for harder-to-place classes via surplus lines carriers.