Ethos Co-Founder and CEO Peter Colis on Rebuilding Life Insurance

Welcome to a new season of Conversations. We're your hosts.

Imran Khan, founder and CIO of Proem Asset Management.

And Lily Mae Lazarus, business reporter. We're excited to kick things off with conversations at the intersection of business, technology, and culture. Today, we're joined by Peter Collis, co-founder and CEO of Ethos, which is a life insurance technology company focused on making coverage faster and easier to buy online. Peter built Ethos around modern underwriting, data science, and a direct-to-consumer experience. We're going to talk about, like, why life insurance was so ripe for innovation, how Ethos works with carrier partners without holding risk on its own balance sheet, and how the company uses AI while still respecting rules and regulations. You said before that the industry motto is life insurance is sold, not bought. So what was the real proof point that people would actually buy life insurance online without an agent reaching out to them, pushing them, saying, you know, this is what you need to do to protect your family?

It's a great question, Lily. And Imran, thanks for having me. I'm excited to be here. What you said was the initial thesis that we had to either validate or invalidate when we started the company. Life insurance, it's a cornerstone of a family's financial future, right? It protects the family, the kids, the spouse when the worst thing has happened, when the breadwinner has been, you know, lost oftentimes early or prematurely. And life insurance can make the difference between paying the mortgage, sending your kids to college, putting food in people's fridge. And what we observed was for something that was so important, it shouldn't have been so difficult to buy. And as a really a function of, you know, the legacy carriers' antiquated technology stack, just bad process that hadn't been innovated on, a lack of utilizing available data and data science to streamline the underwriting process. The agent-dominated nature of how it was sold and not going direct to consumer, we saw the opportunity to say, hey, can we make it so simple and easy that people will just naturally buy it instead of requiring an agent to push the product? And agents serve a really important process in the industry today, which is convincing consumers to get off the couch, take the initiative, and buy when they otherwise might not and leave their family You know, unprotected. And so we wanted to make it both simpler for consumers and then also for agents. And, you know, after a multi-year journey of just automating and streamlining and bringing data science to underwriting, you know, to automate that, we developed a 10-minute purchase journey where you go to ethos.com and you can buy a policy at an incredible price for 10 minutes. And we approve over 90% of applicants for some kind of coverage. And then in addition to that, we serve agents. And last year, over 15,000 agents sold our policies as well.

Why did you pick life insurance? You could have picked— the model should work on auto insurance, other kind of insurance. Why life insurance?

One, just from a personal mission standpoint, like, I love protecting families. Life insurance makes a huge, a huge difference in people's lives. Like, I read through our claim stories and It's just devastating, right? And, and the only silver lining is that this family has some sort of financial security, right? Because that, that, that parent, that breadwinner did the responsible thing. So just from a personal mission standpoint, I think everyone on the Ethos team like wakes up very excited to protect more families and just build the largest most efficient family protection engine that's ever existed. The second is it was ripe for innovation. When you look at, like, you can buy auto insurance quickly from GEICO already, and those companies are very aggressive operators. They're hard to compete with as an upstart. And life insurance was just not anywhere as far progressed in the client experience, the agent experience, You know, the ability. And so for a lot of structural reasons. And so we really saw it as an attractive market to innovate where we could make a really big difference. It wasn't something incremental. It was something that was really different that would then allow us to go, you know, capture hopefully more market share than any one individual carrier will have captured.

It's interesting that you point that out because you're mentioning a lot about the different interactions that people have to have with insurance companies. And I, Would say that no matter what online forum you go to, people likely have several threads complaining about what it's like to interact with the insurance industry. Your NPS net promoter score is well above the industry average, which is a very good thing. You're at around 70. The industry average is 14. So people love your product, and I don't think that most people say that about insurance companies. I think if I were to poll my friends. of their favorite things in life, I don't know if insurance would make the list, right? But clearly, this is a product that people enjoy using. And so what is a piece of customer feedback, I mean, good or brutal, that helped you change the product?

The buying process was the most important thing to focus on, because in a world without Ethos, it typically takes anywhere from 5 to 10 weeks to buy life insurance. Many of the listeners have probably gone through that traditional process where You know, you find an agent or an agent finds you. You fill out a PDF application. You then apply to the company. They then schedule a medical exam or a blood test with you. You then have to go through that process. That then goes into a human underwriter's queue. That human underwriter may go reach back out to you with more questions. The agent has to facilitate this whole thing. Then eventually, weeks later, you, you get approved or denied. You then have to decide whether you like the approved price you got and whether you wanna take it or then apply to a different carrier. You know, you then have to pay in potentially some inconvenient way like mailing a check. So it's just a really different process. And for us, so much time and effort went into being able to make a very specific pricing decision. Without ever meeting or speaking with you and instantly. And the way our underwriting works is when someone applies online through Ethos and they're filling out some health questions, they authorize a HIPAA consent form knowingly, which allows us to go pull things like your pharmaceutical records, your medical claims billing data, your prior blood labs histories, your prior life insurance application history, your motor vehicle records, and other things that are a near-perfect supplement for the data that would be obtained through a manual medical underwriting process. And really the IP and, and the hard part is, you know, per applicant we absorb around 200,000 data points. And so we have to translate that structured and unstructured data into a proprietary information graph, and then a second layer of IP that computes that information graph into a pricing decision. And if you look at that computation layer, we on average per client fire around 40,000 rules of logic. Out of a bank of over a million rules of logic to make that decision. And no 2 applications are the same. So it's a huge data science problem. It took years to get to the levels of automation that we have today. We had to do it in a very risk-responsible manner rather than just, you know, turning it on all at once. And it's been years of iteration and refinement. But that's what's, that's what's made the biggest difference. And the speed and ease is what has allowed us to go direct-to-consumer and have sustainable unit economics. Because in absence of the speed and ease, direct-to-consumer clients didn't want to wait around and go through the process, you know, without a care, without an agent who would push them through that process. One of the things that we do is really try to de-average pricing to get the individual person the most accurate possible price that's personalized to them Versus brushing them with a broad brushstroke, which either penalizes or subsidizes them at the expense of other people.

So if I'm approved for life insurance, what happens next? Do you sell that policy to somebody else, or do you hold it on your balance sheet? How does it work?

That's a great question. Ethos is a no balance sheet, no risk-taking company. So we work with 6 life insurance carrier partners today, and they hold 100% of the risk and they guarantee the claim that will be paid, you know, upon the policyholder's passing. So it's really a win-win for us because we don't have to grow surplus capital in relation with client and agent demand for our products, allowing us to scale much faster and at more attractive IRRs than we otherwise would have to. If we were a life insurance carrier.

So does it ever have a situation that you approve somebody and then the other, the 6th life insurance partner don't accept it? So how do you manage that risk, or do you only work with that framework?

Ethos has absorbed all the responsibility of pricing and deciding whether or not that client should be approved, at what price, binding them on behalf of our carrier partners legally. So think of it as all functions of the carrier have shifted to Ethos except for the claims process and the investment portfolio management and the designation responsibility as the legal carrier entity.

Your underwriting partners are taking the risk. So how do you make them feel comfortable? Was there a situation ever that something happened and they didn't fulfill the— because your underwriting was not there? They were not comfortable with your underwriting and they didn't pay that life insurance or something like that. Like, how do you make sure that you are not exposing your partners to a risk because they're going to get hooked with that life insurance policy if your underwriting is not perfect?

We view the carrier partners and ourselves as a shared ecosystem of profitability. So we will always prioritize their target IRRs and their long-term profitability ahead of our own. And that's reflected in the client pricing, in our compensation, and just how aggressively we risk manage the business. So we're constantly looking at mortality and persistency in determining, do we need to ever refine pricing? Do we ever need to update the underwriting rules on a go-forward basis? And we have a lot of auditing programs that go into those. to initiatives with carrier partners. So think of it as just always-on risk management to ensure that we're always protecting their IRRs.

I'd love to touch a little bit on everyone's favorite topic, AI. You know, there is a philosophical question here, and you did study philosophy, so I'll pose it to you about letting an algorithm make life and death adjacent decisions, right? When you're thinking about the business, where do you draw the line between automation and human judgment, and how does that map into AI's broader push into various industries? But how are we also going to preserve the trust of the people that are giving us their money to help secure their future in case that something happens?

We use machine learning and AI in almost every aspect of our business, which is, you know, how we are such an intelligent, virtuous data cycle model. One place that we do not use it is in making underwriting decisions. So those are completely rules-based algorithms that are reproducible, you know, auditable, disputable, and correctable, which adheres to the same Fair Credit Reporting Act compliance that a credit underwriter would have for nondiscriminatory reasons. And so it's very important to follow the regulations in that respect. In underwriting, where can we use ML and AI? Surfacing opportunities to improve our rule sets and logic. When you look at the historical data of underwriting data and then you think about how complicated the, you know, the interaction among those million rules of logic are, it surfaces opportunities that then our human underwriting teams will evaluate and gut-check and then potentially propose as optimizations to the model. But All our underwriting decisions are regulated and reproducible, not black box models. We will follow, you know, the law to the letter. And so it's, you know, it's on the Ethos team to just always act not only with great integrity, but also to respect the law in where this technology can and cannot be applied. And it shouldn't be on our clients to hold us accountable to that, that, you know, that, that's a responsibility of our company irrespective of what our clients think.

I do find something very interesting about your business, which is the blending of the 2 different cultural taboos, talking about death and talking about money, which I would consider like 2 of the most sensitive topics that you don't bring up at Christmas dinner with your in-laws. So as you're thinking about building this business, you do have to address the underlying culture here. Why Americans avoid both conversations and, you know, what do you think would happen if families were more transparent about their estate planning and, you know, in case of disaster? Um, because nobody wants to think about the worst case scenario, but unfortunately when the worst case scenario does occur, you would rather be prepared than unprepared. So how, how do you approach topics like that?

It's uncomfortable and inconvenient to think about. And furthermore, life insurance is a selfless good deed, right? It doesn't benefit you as the as the buyer. It only benefits the people that you love. And you can't imagine a world in which your loved ones are going on without you, right? Especially if you have kids, young kids. The reality is that about 5% of kids will lose a parent before they turn 15 years old. So unexpected things happen. No one thinks it'll happen to them. I think one of the things that's driven our Tremendous growth and success has been developing a brand that is approachable and just real, right? It, it doesn't come off as a stodgy financial institution. It meets people where they are, and then really bringing simplicity and transparency so that the end buyer feels in control without the need for a financial advisor or an agent to explain some complicated policy documents and things to them. Really just bring simplicity and clarity in telling them what's important and sourcing, you know, the best option for them at a great price with great benefits and features in a way where they can just trust that Ethos has done the hard work so that they don't have to. And you can buy a policy in under 10 minutes, right? It's like buying a plane ticket online. And so A lot of people, it just, it allows them to check the adulting item off their checklist and just get back to life and stop thinking about these unpleasant things, which no one really wants to think about.

I'm also curious because Aflac has its duck and State Farm has Jake and Progressive has Flo and GEICO has the gecko. Will you also be acquiring your own mascot?

Yeah, that's a great question. We haven't to date just because there are pros and cons. There have been immense pros for those companies. You know, the con is that you're very tied to that one thing, but also they're in a different market. Life insurance is a little bit more serious, I think, than auto insurance. And we don't fearmonger in our advertising, but we do need to You know, emotionally resonate with people. Like oftentimes what we'll do is we'll celebrate people who benefited from life insurance. We'll often celebrate, you know, and share someone's story of saying, you know, when I was a kid, my parent passed early and it was because of life insurance that we succeeded. And it takes something like that sometimes to get somebody off the couch and decide to go buy. And so, you know, we wanted a tone of like, Not dead serious, but, you know, lighthearted enough, but real and emotionally resonant rather than just pure humor, which is how a lot of, you know, more auto is sold. When you think about auto insurance and you see State Farm, GEICO, Progressive, Allstate, each one of these companies spends between $2 and $4 billion a year in advertising, and they're huge, well-recognized brands that own consumers' hearts and minds in those categories. When you look at life insurance today, in our estimates, Ethos is probably the largest advertising spender in the industry, even though we are a single-digit percent of the industry today. And what that's a reflection of is the fact that it's really been an agent-dominated sales process. And the biggest life insurance carriers don't have the same sort of brand equity and fondness in people's hearts and minds that Progressive, which has been running funny commercials for 20 years, does have. And we have the opportunity to really own and capture this category. And there's no other ethos that we're really competing with at scale in the direct-to-consumer space. So we really can own and dominate this category in people's hearts and minds. And that's what we really want Ethos associated with. It is your life insurance solution. Like, if you want life insurance, it's fast and easy. It just makes no sense to go anywhere else. Go to Ethos.

So business is growing really fast, 100% plus growth year over year, 2 quarters in a row. So congratulations. So how are you growing so fast? You know, so is it all marketing or how much is coming from word of mouth?

We are growing quickly because we have like extreme product market fit both with clients and agents and potentially even more product market fit with agents. If you look at our distribution between go-to-market models, direct-to-consumer is around 60%, agents is around 40%. But agents was launched more recently in 2021 versus we launched direct-to-consumer in 2018. And the reason is, for an agent, you know, a consumer has to go through this buying journey once or twice in their life. An agent has to go through this case management, you know, selling process all day, every day. And so when you compress, you know, an 8-week purchasing journey that I described before down to 10 minutes online, it is transformative for the agent. They free up so much time to go prospect for more clients and sell more policies. And we pay them a commission the day after they sell a policy, which enables them to go buy more leads and or prospect for more clients and, you know, fund a very fast working capital cycle if they are in a working capital constrained economic environment. So it's just like a huge unlock of productivity and agents, you know, they can sell so many more policies with Ethos than they otherwise would. And we give them all sorts of tools and features to help them become more productive. So the product market fit is what's driving the growth, and importantly, at attractive unit economics. It's not sacrificing, you know, good unit economics to, you know, it's not empty calorie growth. How are the clients finding us? Mostly marketing. We do get a lot of organic and word of mouth because of that high NPS that Lily mentioned. But most of it is marketing and We have a very scientific and efficient marketing team with a brand that is, you know, becoming more permanent every day. Right. And that's our goal is for a lot of the variable marketing expense to over time become more of a fixed, you know, take on more of a fixed property where we've built an enduring brand that people know and love and remember. The important thing is we are still a single-digit percentage of this market. And if you look at life insurance, it's a highly fragmented market. The largest carrier, Northwestern Mutual, only has around 10% share of new premiums issued. And so it's weird because you should expect this market to behave like a commodity with, you know, where people buy based on the price per unit of coverage only. And in reality, I think it's more differentiated on distribution and experience. And that bodes well for Ethos because we are the most differentiated experience and distribution that you can find in the life insurance industry. And so our hope is, you know, while we're still a single-digit percentage of the market today, that one day we can grow to become multiples of, you know, any one carrier. And one of the reasons for that is by partnering with a portfolio of carriers, we find carriers that are strong in the respective parts of the market where we, where we place them, right? So We have proprietary products in, you know, multiple term life products, multiple whole life products, multiple index universal life products, and the carriers are well positioned for those respective parts where they operate in our, in our buy box. And carriers are typically strong in a couple parts of the market and weak in many others. And so by having this portfolio approach, it allows us to really have strength in all parts of the market.

So then are you gonna continue to scale the life insurance or the annuity business or any other kind of new product? Are you going to get into this business? Because I think you launched annuity products, no?

Yes. So we started offering annuity products to clients earlier this year. It's still a nascent early business, but we like the early thing. We like the early experience we're having. Annuities are incredibly important, right? Like America has a bit of a retirement crisis. There are a lot of people who are not well off enough to retire at ages that they probably, you know, 10 or 15, 20 years ago thought that they would've been able to retire at. And inflation has not helped that, right? Inflation has exacerbated the issue. And so annuities offer a predictable, you know, a more predictable path to retirement for many families. It's an incredibly important product. Ethos is offering annuities to clients today. Someone can, you know, come through our websites, start the preliminary application, but we will always make them talk to an advisor over the phone before they buy a product so that we know that they know what they're buying and that they're getting the right product that's suitable for their needs. But we're excited to offer it, and then we're excited to innovate in the technology and buying process one day in the same way that we have in the life insurance market. And as you, as you said before, it is an enormous market to participate in. And so we're observing success both in marketing annuities to clients, but also offering annuities to the people who are, who are coming to buy life insurance. So we hope it will exist both as a standalone and, and as a complementary product.

Do you have any sort of rituals around earnings season that help keep you in a good headspace when the pressure is especially high? Yeah.

And if I can chime in, like, talk about your public company journey. Going from private to public is a completely different experience. And why decided to go public? And then let's talk about your public market journey. Stocks has done well.

Yes, it's the top-performing stock of the 2026 IPO cohort, which we're proud of. I think we're still very early in our journey, and that's why we went public, is we just think it's a business that can compound for a very long period of time and has a lot of qualities that made it ready for the public markets from a predictability standpoint, a profitability standpoint, a runway, a room to run on growth standpoint. So we were excited to give liquidity to shareholders while being ready for the public markets. Lily, to your question on what are the rituals, how do I ease the The tension. The first one, you know, I was pretty nervous. I'm sure all CEOs who do their first earnings call, it's, you know, a bit anxiety-provoking. It made it easy that we were growing at very high rates profitably. So I haven't had a tough call yet because the business, the underlying business has performed spectacularly, you know, better than expectations. And so I think at the end of the day, more than anything I say, the most important thing that public markets care about are results, you know, and the continuation of innovation and, you know, the roadmap to future growth. And so we do let the business speak for itself in a lot of ways. And it's been great to get to engage with public investors who are different than private market investors. And they have been, you know, before you operate in a public environment, you just see like the wild gyrations of the stock market and you kind of assume that public market investors are irrational. And when you get to the public markets, you know, nothing further could, nothing could be further from the truth. The institutional investors that we deal with are constantly rationalizing, right? In real time. factors that have to do with your business and factors that are, you know, external to your business that, but that will influence your price and their returns. So it's been a pleasure to get to meet them. You know, we're excited. We said that for the first year we're going to spend, you know, a lot of time educating the investor community because it's a whole new constituency for us that has not had exposure to Ethos. And Ethos is kind of a one-of-one business. There aren't perfect comps for it. There's no, There's nothing that looks like it that has gone public before. And it's got a lot of really unique properties, right? It's a 3-sided technology marketplace, but with no balance sheet operating in the insurance market. More people are familiar with home and auto than they are with life insurance. It's growing like a, you know, like a red-hot technology company. So there's just a lot of uniqueness to it that necessitated, education. And I think, you know, what you've observed in the stock is, as we've continued to print great quarters, you know, more confidence is being built in the company. And so we hope to continue delivering.

I'm curious, when you were growing up and you envisioned your life and you were asked that question for your yearbook quote in the 3rd grade or whatever it was of what you want to be when you grow up, do you remember your answer? And do you think if you were that age now looking at you, do you think you would be surprised or do you think that you would think to yourself, I knew it, you know, I would be the CEO of a public company?

At that age, I do remember my answer and it was I wanted to run a tiki bar hut in Jamaica.

Okay, well, I like that answer. I think that that sounds like a retirement plan for you.

Yeah. I grew up in a, boring suburb outside of Chicago, but that was near the Allstate headquarters. And I always had a great deal of respect and reverence for this big insurance company that was this brand that everyone knew. And I thought it was really interesting. And so I don't know if that had some sort of, you know, subconscious chip on my shoulder about wanting to build that for a new category. My childhood dream would not have been to be in the insurance industry. People typically get into it because they had family in it, or they they they really dislike other humans, so they become actuaries and and they're in love with math. And we have incredible actuaries on our team, and half the stereotypes are true, I'd say. But you know, most most life insurance companies are run by actuaries because they're very complicated and math driven.

A tiki bar is is far from math as I think you can get to some extent.

I had a dream about being able to start some kind of company. I came out to Silicon Valley to go to Stanford for grad school, and I met my roommate, Linky, and together we started 2 companies together, one before Ethos and then Ethos. And the most important thing was we loved working with each other. You know, in the first company, which was acquired, it was a nice profitable company, We had to go through all sorts of obstacles to get it to where it was. And as we were graduating, we realized, man, we love working together, even when things are not going well. And it was really a friendship that defined both our careers. And he's a brilliant both business leader, but also technical leader. And so our skill sets complemented each other and And we loved going after this business together. It's great to have someone to share your ups and downs with. I wouldn't trade it for anything.

So I have a theory, right? So every company that became very successful, the founder has to have some sort of superpower, right? But the business is built on, because when you first start the company, you are doing everything. And you have to be very good at something that helps take the company to the next level, then you can get to hire great people because you don't get the top talent come on day one. So the question is, what is your superpower that helped this company get where it is today?

I would argue the opposite, that I'm quite good at a lot of things, but not the best at any of them. And I was good enough to have— because early on, you have to play like the role of every— you have to play every function, right? I was our chief recruiting officer, chief HR officer, chief product officer, chief financial officer. I played every role at the company except for engineering and data science. I had to be good enough to get us to a certain extent before we could then go hire leaders in those respective categories. The first leaders that we hired are typically not the leaders who are there today. In some cases they are, but oftentimes we then had to Realise, okay, as we got further, there's someone who's going to be better for— so I don't know that I have any one superpower. I'd say I have like decent product intuition and then I've got a, I've got a mind for numbers. And but, but I understand, and my co-founder Linky, we both have a balance of technology, risk management, and then distribution intuition, like go-to-market intuition. And you really need all 3 of those things to succeed in our business. And we had, when we launched, we had like 9 life insurtech competitors that were similarly VC funded. And all of us were indistinguishable from the outside. You know, 8 of the 9 today are shuttered, pivoted, or acquihired. And the 9th is like a fraction of our size. And so I think that they probably didn't succeed at one of those 3 things.

So Peter, you had some great success. and you've been building the business for now 8 years. What are the things that you learned or mistakes you made that you think made the company better?

As far as mistakes, the mistakes are typically always people mistakes. You hang on to the wrong person for too long. And so we really— and before we started Ethos, my co-founder Linky and I had not managed anybody. So there was a learning curve. And at the time, we didn't know exactly what, you know, we didn't know what the best talent looked like for the role. You know, we didn't— we wouldn't have been able to see all the early things that we saw today. And we probably, you know, we're people, right? So we feel bad about letting people go and probably held on to some people too long. But I think overall, we have a pretty good track record at that compared to most managers and leaders. And our culture is one that— Really prioritizes the mission of scaling the family protection engine and doing well by customers, but has an immense bias for impact and a grounding in the truth over looking good. And those principles have helped us really identify early on, does someone march to our beat or not? Like, are they really motivated to achieve impact fast? And do they care about the truth instead of looking good?

So my last question to you would be, if I were a new founder come to you for advice, what would be the one advice you would give it to me to be successful?

Really make sure that your problem is like a deep problem that's felt by many participants in the market and that your solution is the right solution.

And keep asking yourself those questions every 3 or 6 months as you progress through the journey of identifying problems, I'd love to know, in moments of difficulty, conflict, um, frustration, what is one thing you remind yourself of to keep you focused on the task at hand?

The more glass you eat, the less you taste it. So—

I like that.

Early on with e-commerce, we had all sorts of existential threats that almost wiped out the business, both internal and external threats. And, you know, they were stomach-churning and they were just terrible to deal with and process through. And in every respect you can imagine, people, growth, unit economics, you know, cash runway, having to do multiple RIFs, you know, et cetera. And as we kept progressing through more and more, I gained the confidence that I'd be able to get through this one more easily than the last one because I was more used to it. And to not let myself get as fazed by each, you know, next issue that we would have to process through. And so I think it just comes with time and experience. You know, it's never as good or as bad as it— as you think it is.

So thank you so much for your time. Really appreciate it. And this is probably the most interesting conversation about insurance I've ever had. And it gives me a lot to think about.

Peter, great meeting you.

Appreciate it. Great to meet you guys.

Thank you so much.