CoverHound, a San Francisco-based insurance tech company, announced today that it raised a $58 million Series D. The round, which was led by Hiscox with participation from insurance providers Chubb, Aflac Ventures among others, brings the company’s total known funding to over $112 million.
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Founded in 2010, CoverHound aims to help individuals and small and medium-size business (SMBs) owners access the best rates they can through its online marketplace. The company partners with insurance partners including Liberty Mutual, Nationwide, and Progressive, according to its website, and acts as an online broker helping people find and compare insurance quotes, much like Priceline and Expedia do for flights and hotels. According to the company, it has sold “more than 200,000” business and personal policies since its inception.
In 2016 CoverHound founded a cybersecurity-focused subsidiary which helps SMBs identify vulnerabilities, connect with cybersecurity companies for prevention, and find insurers for cost mitigation.
Between credit cards and cloud computing, our lives have migrated online. And while that’s convenient for us and for many of the businesses that leverage that technology, it also puts us at risk of new types of vulnerabilities. So having a safety net to potentially lower the cost of addressing those issues is helpful.
As we have reported in the past, cybersecurity is a critical piece of the business puzzle, particularly concerning customer data protection. But while most people have been exposed to cybersecurity through coverage of Facebook breaches, government hacks, and other large-scale issues, the importance of cybersecurity also impacts small business owners.
“All companies need cyber insurance,” CoverHound CEO Keith Moore told Crunchbase News in an email. “In fact, data shows that 86 percent of the total SMBs shopping for cyber insurance come from industries outside of computer, software, or IT.” Moore also wrote that more enterprises are requiring their vendors to carry cyber insurance as well.
According to an Economist article, some insurers estimate that premiums in the cyber insurance industry could reach upwards of $8 billion by 2020, compared to $4 billion in 2018. The article addressed the complicated nature of cybersecurity costs relative to other types of damage. Part of that cost estimation comes down to mitigating the breach when it happens and dealing with claims calls from customers that were affected by a possible breach.
CoverHound’s $58 million Series D will enable its geographical expansion, as the company plans to open an office in Charlotte, North Carolina and to expand to Japan (one of its investors, MS&AD is a Japan-based insurance group). Further, it will also allow the company to partner with more insurance providers, particularly for its cybersecurity-focused subsidiary.
While insurance can be equally stressful and opaque, some tech teams are trying to make it less confusing and more tech-forward, and the funding comes at a time when companies in insurance categories have attracted a significant amount of funding from investors. In the past year, Crunchbase News has spoken to startups trying to tackle insurance pricing, use cell phone data to rate driving behavior and change the cost structure of car insurance, reimagine life insurance, and use data-driven quoting for home insurance.
Below are some notable insurtech companies that have recently attracted investors.
Illustration Credit: Li Anne Dias