Mike Dorfman’s Career Shift
Mike Dorfman, part of the fourth generation in his family’s trucking insurance business, faced pressure when he announced his departure to cofound Koffie, a startup in the same industry. “My great-grandfather established a trucking-insurance agency in New York in 1921,” he shared with Insider. “I’m the first in a century to choose a different path.”
Identifying a Market Gap
Dorfman recognized a significant opportunity to assist small trucking companies by innovating the insurance underwriting process. “I’ve witnessed many trucking firms going under because they couldn’t keep up with premium costs,” said Dorfman, who currently serves as Koffie’s COO.
Rising Insurance Premiums
Trucking companies have experienced rising insurance premiums over the years, largely due to “nuclear verdicts” resulting in multimillion-dollar payouts. Data from the American Transportation Research Institute indicated a 22.5% increase in truck insurance premiums between 2019 and 2020, with many carriers citing these premiums as a primary reason for salary reductions in their companies that year.
Alternative Data Approach
Meeting his Koffie cofounder Ian White, an advocate for “alternative data,” allowed Dorfman to address these challenges effectively. White, Koffie’s CEO, has a background in software and fintech, previously applying data analysis within the hedge-fund sector. He expressed enthusiasm about leveraging his expertise in the trucking industry.
Innovative Risk Assessment
Traditional trucking insurance underwriting relies on basic data like driver safety records and fleet size. In contrast, Koffie evaluates around 300 variables for each truck, examining operational specifics such as typical routes and the types of goods carried, coupled with detailed safety data. “We believe equipment offers a more concrete insight into risk than merely assessing fleet operations or individual drivers,” Dorfman explained.
Expansion and Data Usage
Currently, Koffie insures about 1,000 trucks, with fleets ranging from single vehicles to nearly 100 units. To refine premium pricing and prevent claims, the company is developing its own data set. “We install a camera and telematics device on every insured truck,” Dorfman elaborated.
Funding and Family Involvement
Koffie recently secured $11 million in a Series A funding round led by Anthemis Group, with Dorfman’s industry expertise being a major draw for investors. “The team’s decades of sector experience uniquely position them to provide extensive solutions,” stated Amy Nauiokas of Anthemis Group. Other participating investors include Lerer Hippeau Ventures, Plug and Play Ventures, along with new investors. Dorfman’s family is also joining the venture, having recently collaborated on their first policy together.
