Partnering with insurtechs can offer traditional insurers a new range of clientele, Cover Genius VP of product Ehsan Azizi says.

The incumbents increasingly see insurtechs as distribution partners because “they benefit from our technology that helps fill certain gaps within the legacy systems still in place”, he told insuranceNEWS.com.au.

Cover Genius this month completed an $US80 million ($121 million) funding round and plans to improve digital insurance distribution and invest in AI claims handling and expanded protection offers through its XCover platform.

The group, which collaborates with brands including Uber, Ryanair and eBay, focuses on travel, retail, ticketing and logistics in more than 60 countries and every US state.

Cover Genius has implemented payment group Adyen’s fraud and security solution, which uses machine learning to boost authentication processes. Mr Azizi says the collaboration has increased authorisation rates and reduced chargebacks as it serves “customers of the world’s largest online companies”.

“Unfortunately, payment and insurance fraud are still a reality that both insurance and insurtech companies have to deal with. Would-be fraudsters believe automation won’t be able to identify their false or inflated claims. For payment fraud in particular, our distribution partners are a first line of defence.”

Claims information that is preliminary and routine can readily be processed using AI, yet Mr Azizi says many incumbent insurers are still offering a one-size-fits-all solution that lacks AI’s capability to customise insurance, improve the experience, or process claims online.

Cover Genius – founded by CEO Angus McDonald and Chris Bayley, formerly of Google’s Sydney office – says it has more than 30 million customers. Its revenue grew 107% in 2023 compared with 2022.

By tackling common obstacles such as limited market coverage, lengthy claims processes and a lack of product diversity, and delivering “highly relevant protection options at the most suitable prices and times”, it is in an advantageous position, Mr Azizi says. 

“Today’s modern consumer lives on the go and expects every aspect of their lives to be accessible via a mobile device, including when making a claim. That said, traditional insurers are ... seeing the value of partnering with an insurtech as a distribution partner for different types of solutions they can offer.”