Cover Genius ‘actively investing’ in AI as part of customer satisfaction strategy
Although investments in insurtech have fallen somewhat for the first half of 2024, AI’s importance is still garnering some interest, as Cover Genius recently secured $80 million in Series E funding.
Significant investment in artificial intelligence expansion is a major part of insurtech company Cover Genius’ master plan to appeal to clients while also improving the claims process.
Studies show companies in the industry generally acknowledge the importance of AI as a tool, and many have said they plan to increasingly incorporate AI tools into their operations.
“We’re actively investing in artificial intelligence and integrating it into our operations to enhance various aspects of our business,” Angus McDonald, Cover Genius CEO and co-founder, said. “We have identified several key areas where we believe AI can bring significant improvements, including claims handling and operational efficiency.”
Insurtech funding on the decline
In its 2024 InsurTech Report published in May, global reinsurance broker Gallagher Re noted that funding for insurtech industries for Q1 2024 has dropped to its lowest level since Q1 2020, decreasing 17.3% quarter on quarter.
According to that report, global funding for insurtechs stands at $912.25M USD and “the industry saw no quarterly USD100M+ mega-round deals for the first time since Q3’17.”
However, despite the broader insurtech funding picture seeming to be on a downward trend, Gallagher Re’s report noted that more than a quarter of the insurtech funding deals from the first part of 2024 went to “AI-centered insurtechs.”
Cover Genius acknowledged the overall “tech funding slowdown,” with McDonald suggesting their success speaks to a “display of trust” from investors and the “resilience” of the company’s business model.
“These varied investments highlight the strength of Cover Genius’ embedded business model, potential for growth and current position as a global frontrunner in the insurtech industry,” he said.
He noted that this made Cover Genius all the more thrilled to partner with venture capital firm Spark Capital, the lead investor behind its $80 million Series E funding round and an organization that had been closely following the business for several years before this point.
Alongside Spark Capital, fellow existing investors Dawn Capital, King River Capital, G Squared also supported the funding.
“These varied investments highlight the strength of Cover Genius’ embedded business model, potential for growth and current position as a global frontrunner in the insurtech industry,” McDonald said.
AI-powered strategy
McDonald said the company ultimately intends “to contribute to increased customer satisfaction and loyalty” through its investment in technological advancements.
He went into detail about how the company plans to leverage AI-powered tools to streamline claims handling as an example.
“By automating routine tasks such as data extraction, document verification and initial claim assessment, we aim to reduce manual intervention and human error. This approach not only helps us save time, but also allows our team members to focus on more complex cases that require personalized attention,” McDonald said.
He added that they intend to use AI algorithms to analyze patterns and trends within historical claims data to identify potential fraud or suspicious activities. He said this could potentially reduce financial risks and enhance security overall.
Similar use of AI tools is quickly becoming widespread in the American insurance industry. Companies and carriers throughout the country have already begun expanding their use of AI in a similar fashion, with most emphasizing its potential to streamline underwriting or claims processes, simplifying the process for industry professionals and improving customer experience.
This makes Cover Genius another notable name to hop aboard the AI train as these advancements transform the insurance industry as it has been known up until this point.
The bigger picture
While AI advancement is a key aspect of Cover Genius’ business plans, it’s not the only item on the agenda.
With their newly secured funding, the company also intends to provide digital protection solutions for industry partners as well as drive growth.
“These new funds will drive growth in key industries where there is a significant opportunity to embed tailored protection products like travel, retail, ticketing and logistics,” McDonald said.
Additionally, it will “accelerate our investment in cutting-edge technology, including improved digital insurance distribution solutions, deploying AI to assist in claims handling and expanding the protection solutions available” on the company’s flagship XCover platform.
“Our vision has always been to protect the customers of the world’s largest digital companies,” McDonald said. “As we’ve grown, we’ve maintained flexible technology that allows us to meet the evolving needs of our partners and build customer-first solutions backed by technology, policy innovation and industry expertise.”
Cover Genius, founded in 2014, is a global insurtech provider offering tech-powered insurance solutions and software. It has more than 600 employees around the world and reported 107% year-on-year growth in 2023.
Gallagher Re is the reinsurance arm of Gallagher Insurance, an insurance brokerage, risk management and consulting firm founded in Chicago in 1927. Gallagher Re was founded in 2022 and operates throughout the world.
Rayne Morgan is a content marketing manager with PolicyAdvisor.com and a freelance journalist and copywriter.
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