Insurtech Cover Genius is celebrating its tenth anniversary and sat down with LII to explain its history, its strategy, and its future.
Recently, Cover Genius closed its $80m Series E funding round. The funding round was led by Spark Capital with aid from existing investors Dawn Capital, King River Capital, and G Squared.
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In addition, the funding follows a strong year for the insurtech as it achieved 107% year-on-year growth in 2023. It also recorded 145% net revenue retention by partnering with large digital businesses.
Furthermore, the company has amassed more than 35 million customers around the world, works with hundreds of merchant and payment partners, and raised more than $250m in funding.
LII: Happy anniversary, did you expect to still be here ten years ago?
Angus McDonald, Co-founder and CEO, Cover Genius: Thank you for the acknowledgment – we’re thrilled to be celebrating 10 years of Cover Genius! We set out to fix the fragmented nature of insurance distribution 10 years ago and knew there was potential in what we wanted to bring to the market, namely something more innovative, flexible and cohesive. We wanted to revolutionise how customers received relevant protection bespoke to their immediate needs and purchases. With any new business idea, you have high hopes but I can honestly say that when we started, I didn’t imagine we’d be where we are today.
When we started, it was out of frustration from the lack of protection available directly within the customer purchase journey plus the fragmented approach to distributing insurance to those who needed it. There was an absolute need for providing customizable protection solutions to customers who needed it based on their specific purchase – not a “one size, covers most” approach to protection. And, we needed it to be scalable across countries and regions, compliant with the local regulations, with the ability to provide payments in local currencies. It was a tremendous lift to ensure we would be able to do this globally, for multiple clients and by investing in acquiring licences and/or authorizations in 60 countries and all 50 US states during our first few years set us up for success to accomplish just that. Our international reach is still one of our main differentiators in the market today and one of the main reasons our partners want to work with us.
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By GlobalDataTen years ago, we had a vision to protect the customers of the world’s largest digital companies but we certainly didn’t think that we would have more than 41 million customers around the world with partnerships with dozens of insurance companies and underwriters for hundreds of brands across the ticketing, travel, gig economy, retail and logistics sectors, to name a few. It’s an exciting time for insurtech and we’re making inroads in various industries with new ways to get protection out to consumers when they need it.
How has the insurance sector changed over the last decade? And how has Cover Genius reacted to those changes?
The insurance sector as a whole hasn’t undergone a massive shift, there are still legacy systems in place that prevent it from evolving. Despite that, the industry has embraced insurtech as part of its new norm to overcome some of the challenges they face, particularly with integrating new technology. Cover Genius has been in this field since 2014 and has become a category-defining business. We’ve been around since even before the term “insurtech” was being readily used in the industry.
With the emergence of new industries and consumer needs, Cover Genius has been able to stay ahead of trends with its flexible technology and growing number of partnerships with insurance companies and underwriters. For example, we were able to stay nimble and create a new solution that would cover travellers for COVID-related incidents when flights began taking flight after the pandemic. We were also able to respond quickly to the needs of people during the wildfires in Greece and Italy a few years ago or when countries have been in conflict. Our platform allowed us to quickly update the user journey experience and handling of first notice of loss (FNOL) in anticipation of their needs. This change helps avoid wait times, surges and disruptions within our claims and support teams to better serve customers when they need it most.
The pandemic served as a catalyst for many companies to look at how they were responding to their customers in times of crisis, which propelled insurtech a lot. It was an opportunity for brands to review their current systems in place, improve upon them and focus on change towards a more customer-first approach. New regulations, such as the Consumer Duty, also came into play that required companies to have another look at services, value and transparency. These changes all play into our own values of providing transparent policies that are easy to understand for people who are, quite often, under insured. Customer expectations will drive further change in this area and companies will need to adapt in order to ensure their future in the long-term.
What has been your greatest achievement over the last ten years? And what about the biggest hurdle you had to overcome?
The biggest achievement has been getting a team of more than 600 talented and dedicated people around the world to work towards the same goal of protecting customers of the world’s largest brands. We started off as two co-founders running the business on our own to quickly expanding to countries around the world and serving the customers of the world’s most recognizable brands, like Uber, eBay and Priceline. Being able to celebrate 10 years of the company is just the beginning of our journey.
The largest hurdle we’ve had to overcome has also become our biggest differentiating factor and that is having licences or authorizations to offer protection solutions in more than 60 countries around the world and all 50 US States. It was a significant investment to acquire these authorizations, but they truly set our business apart by allowing our partners to work with one global team and API integration rather than working separately across regions. Traditional insurance models are often monoline, meaning they only work in one industry or only operate in one country. They also lack an embedded distribution platform to distribute protection alongside core goods and services.
As such, for companies doing business in different countries, they can come to us for our global reach and access to offer almost any line of insurance or other type of protection solutions to their global customers embedded directly on their digital platforms. Building a platform that is able to offer frictionless worldwide protection for our global partners was a hurdle to overcome, but the one we’re especially proud of because it allows us to keep our partners’ customers at the centre of everything we do.
Where do you see the company going over the next year – and the next ten years?
Artificial intelligence is going to change the business in a few different ways – and more precisely, Generative AI. For us to continue being customer centric, we understand that assessing claims will always be personal and will require the human touch. With Generative AI, however, there is an incredible opportunity to automate aspects of the claims journey to make it faster and more customer friendly – from the receiving and processing of documents to improving chatbots and assisting agents.
Historically, an insurance claim could take anywhere from 30-90 days to settle. But, with advanced technologies, brands can change this standard by fully integrating claims platforms into their online experience to facilitate a quicker claims process. This is an area we’re already investing in because we understand that it has an exciting future that will continue to differentiate our business.
Gen-AI will allow us to understand larger trends and anticipate needs from customers as they happen. It will be a huge undertaking but can lead to a whole new way of providing customers with what they need from the brands they trust.
