Coverage Genius lands $70 million to grow its embedded insurance business • TechCrunch

In the year In 2014, Angus Macdonald, head of publisher partnerships at Yahoo (full disclosure: parent company of TechCrunch), teamed up with ex-Googler Chris Bailey to found an insurance platform that would price and process claims for any insurance line. or warranty. After expanding its business to 50 US states and more than 60 countries, Cover Genius is gearing up for its next phase of growth, McDonald says, fueled by significant fresh capital.

Cover Genius announced today that it has raised $70 million in a Series D round led by Down Capital with participation from Atlas Merchant Capital, GSquare and King River Capital. Bringing the 420-person total to the company’s total revenue of $165 million, MacDonald told TechCrunch that the proceeds will be used to “support business growth” and further expand Cover Genius’ insurance distribution services.

“We have created a wide range of security solutions for many partners, including many of the world’s largest airlines and travel companies, retailers and logistics players, mobility, auto and gig economy companies, banks, fintechs and protechs, and business to business software and event ticketing companies,” said McDonald. “From our inception in 2014, raising $1 million in 2014 to a Series B in 2018, we’ve been blessed with significant partners to ensure healthy and sustainable cash flow, and we have frugality in our DNA,” he said in an email interview.

MacDonald and Bailey were inspired to launch Cover Genius after an insurance challenge with an international online travel agency they previously worked with. The co-founders found that traditional insurers were difficult to operate because each country they wanted to target required a separate insurance agreement.

In creating Cover Genius, Macdonald and Bailey worked to obtain approval and certification for embedded insurance in most countries around the world. Unlike standard insurance plans, embedded insurance like Cover Genius’ is bundled with the purchase of a product or service offered instantly or at the point of sale.

Ridesharing app Ola uses Cover Genius to provide insurance to riders and drivers. BetterPlus, an India-based workforce management software provider, taps Cover Genius technology to provide healthcare services to contract workers. As for buy-now, later for carrier Zip, Cover Genius has built an AI-powered tool that categorizes non-warranty items (such as power drills) for e-commerce customers to insure.

Cover Genius

Among the products that Cover Genius offers is Shake Shield, an earthquake insurance backed by Swiss Re. Image Credits: Cover Genius

“We believe the embedded insurance model, the ability to protect customers at the point of sale or enrollment, and partnering with digital platforms from direct-to-consumer and traditional insurers will bring great value. With insurance,” Macdonald continued. They should take a second step to purchase protection. Partners gain bottom-line growth and loyal customers and insurers benefit from an information-rich distribution channel.

There is no doubt that embedded insurance is the new hot thing in insurance. Startups in the space, many founded in the past five years, have raised nearly $800 million in VC funding by 2021. And a recent report from Simon Torrance, an embedded finance and application strategy consultant, speculates that insurance covers only property and casualty. In the year By 2030, total written premiums will exceed $700 billion, or 25 percent of the total market globally.

New York-based Coverage Genius has competition in insurance providers such as Extend and Boltec. But it has a strong customer base spanning 10.5 million customers across merchant partners such as Intuit, Kayak, Booking Holdings, Priceline, Turkish Airlines, SeatGeek, Amazon, eBay and Wayfair. While Cover Genius was initially hit by the pandemic — the company mainly offered travel insurance in 2020, when the industry took a hit — McDonald’s has been able to expand into different market segments over the past two years, he said.

The branch was acquired through a combination of product launches and acquisitions. In July, CoverGenius made a strategic investment in India-based insurtech Insurdit and acquired Booking, a ticket refund protection startup, bringing SeatGeek to the CoverGenius platform. And in June, Cover Genius launched a “cost-optimized” warranty offering for small and medium-sized ecommerce businesses.

One obstacle in the way of expansion that Cover Genius has to overcome is the general sentiment around insurance – it’s not positive. In the year A 2019 survey by the Geneva Association, the international association of insurance companies, found that more than half (53%) had had a bad insurance experience. In contrast to IBM’s report, less than half of consumers said they trust the insurance industry.

McDonald’s Cover Genius products speak for themselves.

“By providing peace of mind and a high-quality customer experience, our partners are entering new territory with their customers by developing product relevance and seamlessness from the point of sale to claims,” ​​he said. “They’ve either had experience working with traditional insurers in the past, which has a negative impact on the customer experience and always creates complaints and complaints about their own brand, or they’ve tried to work with traditional insurers and given up. The ‘heavy lift’ is otherwise sitting with them.”

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