AN INSURTECH startup in Montreal is looking to shake up the traditional p&c brokerage model with a digital platform that uses data and proprietary algorithms to find coverages that can be purchased with a few clicks.
Covera Technologies is now operating its new digital brokerage, Covera Insurance Ltd., in Quebec selling auto insurance.
Co-founder and ceo Scott Loong told Thompson’s it is expecting to launch home insurance products soon and plans to begin operating in Ontario by the end of the year.
Covera recently announced it has raised $1.5m in financing to drive Canada-wide expansion and build a team to accelerate product development.
The new brokerage is targeting a unique segment of the p&c market: automatic renewals.
“People generally buy insurance once when they get their car or home and when the policy expires basically no one bothers to shop,” Mr. Loong said.
We target that segment and allow the policy to renew year after year (with the best value Covera’s technology can find).”
He said the company has done away with in-house call centres processing numerous quotes, relying instead on its own software which automates portions of a broker’s job.
“We are 50% software developers and the rest of the team is marketing, brokers, product developers and designers,” Mr. Loong said.
“Our technology is in some sense our secret sauce.”
He said Covera doesn’t rule out the possibility of licensing the technology to other brokers in the future, but is currently committed solely to becoming a full-service broker with its own technology.
Mr. Loong said many brokers today are looking for turnkey technology solutions to modernize their businesses, but modern software is not developed that way. “Software today is like a living tree and that is how we get to where we want to go — it never stops.”
He said Covera’s technology evolves by getting the product to market quickly, starting to help customers and then improving the process.
Mr. Loong said brokerage startups are often caught in a “catch-22” situation because a lot of the business is about testing ideas, features and market positioning and not just selling insurance. But to secure an insurance company contract and have insurance to sell, sales goals are necessarily front and centre.
Covera notes that its services are free for consumers as it operates solely through commissions charged to insurance companies.
(More coverage of the use of data to gain consumer insights was presented in Thompson’s Oct. 23 weekly edition. To subscribe, please choose the ‘Subscribe’ tab on our main page for more information or email firstname.lastname@example.org)