Could Trov make insurance palatable to millennials?
San Francisco-based insurance innovators Trov announced on Tuesday that they have closed their Series C funding round with $25.5 million in new financing.
The round was led by Oak HC/FT, who joined Australian insurer Suncorp Group, Guidewire, and previous investor Anthemis Group, bringing their total capital raised to a very significant $39.2 million.
Founded in Scott Walchek in 2012, Trov offers users short-term insurance coverage, with all aspects of their services available through mobile.
This includes the uploading of items to their cloud (which they call the Trov), receiving quotes for their policies, activating and deactivating the coverage, and of course making claims if the need arises.
Accompanying their funding release, Trov has also announced that they are partnering with Suncorp in Australia and AXA in the UK as their local insurance partners.
Reintroducing the concept of how we use insurance
Through their app, Trov is taking on the outdated model of how we think about insurance. In general, consumers are forced to buy blanket policies that are down right unclear as to what it is exactly that they cover.
If I buy a homeowner’s policy, does it cover my bike when I ride it to the office? What about my surfboard? With Trov, users can chose to insure basically anything that they own, including your home, vehicle, and electronics.
Trov understands that most people, especially from the younger generation, do not want to deal with the complications that come with dealing with insurance companies. They just want to know that their stuff is covered.
Walchek tells Geektime that users have expressed to them the feeling that, “In a world where I have complete control of entertainment, banking and other services, why can’t I just choose a few things that I care about and protect those for as long as I need to.”
Trov’s application helps people collect information about the things that they own and acquire through numerous capabilities all aimed at reducing the friction around collecting this really valuable information.
Users can connect their inbox to Trov, which automatically captures the information that is coming through electronic receipts, and then match it with the meta data in the cloud on the backend.
You can take a picture of anything, giving them the make and model of the object that you want to be insured, adding it to your account of items to be insured that they call the Trov.
The company uses microduration policies to cover their clients, allowing them far more flexibility in how they can offer insurance products.
Since users are able to control the duration of how long they want to have their coverage active for through the app, Trov is able to bill down to the second, meaning that users do not have to pay for extra time that they do not need.
Trov is not an insurer but an appointed representative. They bring in the users and act as the broker for their local partners who provide the balance sheet risk and heavy regulatory cover. Trov itself takes no balance sheet risk, with the claims handled by the partners’ balance sheet.
If a user needs to make a claim, they can use the chat bots and human service agents through the app to resolve the issue quickly.
Walchek tells Geektime that they are able to offer competitive rates on coverage, including on items like smartphones and laptops.
Looking to the future
Trov plans to launch their service already next month, starting in Australia as their test market. Later in the year, they will move to the UK to work with AXA as their partner.
The company hopes to open up shop in the U.S. and other locations later in 2017.
For the time being, there do not appear to be any direct competitors, but Walchek cites Cover, who helps users find quotes, as another company to watch for in this space.
Trov’s value proposition is that they can provide a more manageable insurance experience for young people, creating a product that is convenient for them to use and fits their lifestyle. Instead of taking on the old insurance model, challenging them for the same market, they are acting as a bridge for the established companies, helping them create products that are attractive to the millennial crowd which eschews the “all or nothing” approach to insurance, choosing instead to tailor services to their needs, on their own terms.
What Trov has tapped into is that most millennials have only a few items that they really care about enough to want covered, so a standard homeowner’s policy just isn’t relevant to them.
In speaking with Walchek, for the first time I felt like I was speaking with someone who really gets the millennial market. Possibly the most over generalized and fetishized generation in the mind of confused marketers, the Trov team has done their homework and read the tea leaves right.
This collection of folks want everything to be a la carte, instantly available on their mobile, and are willing to pay for the convenience. Industries that recognize this trend and adjust for it will come out winners. Those that fail to make the necessary pivots will fall by the wayside.
As Walchek correctly points out in our conversation, the insurance industry like banking is a change adverse institution, making adjustments to the modern market very difficult for them. However with services like Trov, they can reach out to a significant market sector that might otherwise be lost to them.
So instead of challenging the institutions through disruption, Trov is reinventing the model to make it applicable to the market.
As someone who personally hates dealing with insurance, I find this service extremely attractive and can’t wait for it to make its way to my shores.