“The issue for us has been finding airlines who want to be innovative when it comes to insurance,” says Cover Genius co-founder and CEO Angus McDonald.
Cover Genius, an online insurance payments and processing platform focused on a number of industries including retail, logistics, travel, automotive and mobility, gig economy, payments and fintech, has raised $10 million in a series B funding as the “InsureTech” company pursues expansion efforts across the U.S., the U.K. and into Asia. Release
While widely available through online travel engines like Booking.com, among the primary aims of 5-year-old Cover Genius is to initiate more direct partnerships with airlines, co-founder and CEO Angus McDonald told Kambr Media following a presentation at PhocusWright in November.
The company, which was started in Australia and currently has offices in New York, London, and Sydney, currently has a direct deal with Australia’s Tiger Airlines. But McDonald and his team is working on doing more.
“The issue for us has been finding airlines who want to be innovative when it comes to insurance,” McDonald said. “That's been our challenge, but we're actively looking for airline partners.”
In making the pitch to airlines, McDonald noted how revenue from insurance has become an area of growth in airlines’ ancillaries. On top of that, offering insurance to fliers can also help support loyalty strategies as well, McDonald suggested.
“We've got research that says that if you've got an insurance product, passengers actually feel more secure, even if they don't buy it,” he said. “We've set up a data analytics platform that we call BrightWrite. We’ve worked with clients and are able to show them which products are selling and why.
“We're working with Tiger Airlines and what we saw was with different trips, people want different protection products,” McDonald added. “For example, if you're a business traveler and you're going from New York to Dallas, you want something different than if you're a leisure traveler flying from Chicago to Miami with your family. Using our dataset, airlines can recommend the right products.”
Held Back By Legacy Systems
Cover Genius’ insurance distribution technology provides regulated insurance policies that integrate seamlessly into online point-of-sale on sites owned by Booking Holdings, the parent company owned by Booking.com, which has been working with the company for the past three years. It also has “signup paths” in more than 60 countries and 50 U.S. states. Cover Genius pays approved claims via its instant payments platform in more than 90 currencies.
“Chris [Bayley, Cover Genius’ co-founder and chief innovation officer] and I had been in OTA businesses before,” McDonald said. “We tried to partner with insurance companies for our customers, who were asking for protection products when they traveled. We had customers coming from Japan and Hong Kong, and France, Canada, the U.S. And we went, so the big insurance providers like Allianz and others sell travel insurance to businesses. They said we'd have to partner with 32 different Allianz entities all around the world to get global coverage. I thought, ‘That is so tedious. Who's actually going to do that?’”
So in forming Cover Genius, McDonald and Bayley looked to payment processing businesses, like Stripe, Braintree, and Adyen, who McDonald said were “doing developer-friendly API's and making it very easy to integrate and to take payment from buyers or MasterCard.”
“We looked at what those payment processing providers were doing, and we just thought it could be done for travel insurance,” McDonald said. “The insurance industry has been held back by legacy systems and a lack of global coordination and customer-centricity for decades. We sought to change that and create simple, yet useful, policies, streamline the claims process and enable the world’s largest online companies to protect their global customers.”
In addition to signing up more airline clients, as McDonald and Cover Genius look to 2020, the company may consider some acquisitions that would advance its distribution systems at the point of sale in travel as well as further in-house product development.
“We're building out a bit in Asia, particularly Japan,” McDonald said. “We're investing in the U.S. heavily and we've got a team of 15 people here now. The plan is to get that to 50 in about six to 12 months.”