Cover Genius lands $70M infusion to grow its embedded insurance business • TechCrunch

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In 2014, Angus MacDonald, the former head of publisher partnerships at Yahoo (full disclosure: TechCrunch’s parent company), teamed up with former Google employee Chris Bailey to found cover geniusIt is an insurance technology platform that rates and processes claims for almost any line of insurance or warranty. After expanding the business to include all 50 US states and more than 60 countries, Cover Genius is preparing for its next phase of growth, says MacDonald, fueled by significant new capital.

Cover Genius announced today that it has raised $70 million in a Series D round led by Dawn Capital with participation from Atlas Merchant Capital, GSquared and King River Capital. Bringing the company’s total of 420 people to $165 million, MacDonald told TechCrunch that the proceeds will go toward “helping business growth” and expanding Cover Genius’ insurance distribution services.

“We have co-created a wide range of protection solutions for partners across many sectors including many of the world’s largest airlines, travel companies, retailers, logistics workers, mobility companies, automobiles, the temporary services economy, banks, fintech companies, proptechs and business – he said. MacDonald in an email interview. “Having started the business in our early days, raising just $1 million from inception in 2014 to Series B in 2018, we are thrilled to have important partners to ensure a healthy and sustainable cash flow, while keeping the economy in our acid. nuclear. “

MacDonald and Bailey were excited to launch Cover Genius after facing insurance challenges with their former joint venture, an international online travel agency. They found that it was difficult to work with traditional insurers because each country the co-founders wanted to target required a separate insurance agreement with the leaders of a separate country.

When creating Cover Genius, MacDonald and Bailey worked to obtain licenses and approvals for embedded insurance in most major countries around the world. Unlike typical insurance plans, embedded insurance such as Cover Genius is combined with the purchase of a product or service, delivered in real time or at the point of sale.

The Ridesharing Ola Cover Genius app is used to provide insurance to both drivers and passengers. Betterplace, an India-based human resource management software provider, leverages Cover Genius technology to provide healthcare to contract workers. For Buy Now, Pay Later Provider Zip, Cover Genius has built an AI-powered tool that ranks insurable items (like a power drill) to recommend guarantees for e-commerce customers.

Among the products offered by Cover Genius, Shake Shield, earthquake insurance backed by Swiss Re. Image credits: cover genius

“We firmly believe in the embedded insurance model, which is the ability to protect customers at the point of sale or subscription, and that there will be a significant shift in value away from direct-to-consumer insurers and traditional insurance toward partnering on digital platforms with insurers,” MacDonald continued. “Customers gain access to personalized protection in a timely manner, removing the inconvenient need to take a second step to protect purchases. Partners drive growth in the bottom line and more stable customers and insurers benefit from a data-rich distribution channel.”

There is no doubt that the embedded insurance is hot new thing in insurtech. Startups in the space, many of which have been established within the past five years, Starch Nearly $800 million in venture capital financing in 2021. Recently Report From Simon Torrance, a consultant for financing and embedded application strategies, it is estimated that embedded property and casualty insurance alone could account for more than $700 billion in gross written premiums by 2030, or 25% of the total market worldwide.

New York-based Cover Genius has competition in insurance vendors such as Extend and Bolttech. But it also has a strong customer base, covering 10.5 million customers across trading partners such as Intuit, Kayak, Booking Holdings, Priceline, Turkish Airlines, SeatGeek, Amazon, eBay and Wayfair. While Cover Genius was initially affected by the pandemic — the company primarily introduced travel insurance in 2020, when the industry took a hit — MacDonald has noted that it has been able to branch out into a range of new market segments over the past two years.

The fork came through a combination of product launches and acquisitions. In July, Cover Genius made a strategic investment in India-based Insurtech Insuredit and bought Booking Protect, a ticket refund protection startup, which brought SeatGeek onto the Cover Genius Platform. And in June, Cover Genius launched an “enhanced price” guarantee offer for small and medium-sized e-commerce businesses.

One hurdle on the road to expansion that Cover Genius will have to overcome is the general sentiment about insurance – which is not positive. A 2019 exploratory study By the Geneva Society, a global association of insurers, it found that more than half (53%) of people had poor insurance experience. separately Report Of IBM, less than half of customers said they trust the insurance industry.

MacDonald says Cover Genius products speak for themselves.

“By providing peace of mind and a high-quality customer experience, enhanced by product convenience and seamless from the time of sale to claims, our partners gain new territory with their customers,” he said. “In the past, they have had experience working with traditional insurers, which negatively impact the customer experience and always cause confusion and backlash against their own brand, or they tried to deal with traditional insurers and gave up because all else the ‘heavy load’ sits With them “.

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