Simplifying insurance with tech and tailored protection

Angus McDonald, Co-Founder and CEO of Cover Genius, spoke to Megan Gaen about embedded insurance and its future in the insurtech industry
You established Cover Genius with Chris Bayley. Why did you take the step into embedded insurance?
Cover Genius was founded by myself and Chris Bayley in 2014. At the time, we had built a global online travel agency and found that traditional insurers were difficult to work with. Every country that we wanted to target required a separate insurance agreement with separate country leads. While this was an issue, the larger problem was no solution for the global distribution of insurance. To address this, we worked tirelessly to gain licensing or related authorisations around the world and built XCover – our global insurance distribution platform.
What is embedded insurance and what are the benefits of end-to-end insurance for consumers and companies?
Across the board, customers don’t want to take an inconvenient ‘second step’ to seek out insurance options. They’d prefer tailored protection offered directly at the point of sale or sign-up. By leveraging transactional and real-time data, digital companies can offer customers highly relevant, tailored insurance options.
What is XCover and what does it offer customers and partners?
XCover is our award-winning global distribution platform for any line of insurance or warranty, with an API for instant claims payments that holds an industry-leading Net Promoter Score (NPS) of +65. We work with our partners to co-create solutions that embed protection that’s licensed or authorised in over 60 countries and all 50 US states. XCover makes it simple for digital businesses to offer tailored policies directly to customers and is trusted by some of the world’s largest companies.
Cover Genius has recently added Turkish Airlines and Air Malta to its list of partners. Who is next on the list?
While I can’t share details about pending partnerships, I can share that we plan to continue rapidly expanding the scope of our platform, to move forward in our mission to protect the customers of large digital companies. Our partnerships with Turkish Airlines and Air Malta are great examples of our work with some of the world’s biggest airlines, but we also work across many other industries – including retailers and logistics players, mobility, auto and gig economy companies, banks, fintechs and proptechs, and B2B software and event ticketing.
How are you going to maintain success, since the Financial Times rated Cover Genius its fastest-growing company?
As demand for embedded protection continues to increase, we’ve seen immense growth as a company. This year alone, we set a new record by hitting US$1.1 million in gross premiums in a single day, reached 10.5 million customers, nearly tripled our year-over-year revenue and doubled our number of new partners. We also recently closed a US$70 million funding round on 1 November 2022.

What trends are you seeing?
Consumers have historically been forced to get insurance by taking a ‘second step’ that is separate from the event or purchase they’re looking to insure. In the retail space, research conducted by PYMNTS and commissioned by Cover Genius found 78 per cent of customers would have a greater propensity to spend more online if offered warranties and insurance at the checkout. A separate survey by Momentive.ai found 78 per cent of digital banking customers are highly interested in receiving bank-embedded insurance offers. Likewise, in travel, our research found 45 per cent of travellers would prefer to buy protection from their travel provider, agent or airline, rather than through other sources such as credit cards. All this culminates in consumers, across all industries, wanting convenient protection embedded into their online purchase journey.
What does the future look like, particularly post-pandemic and with sector digitisation?
Consumer behaviour changed during the pandemic. Consumers not only sought protection from their favourite digital apps but were also more interested in insurance than ever before. Across our network of partners, customers chose to attach protection at a rate six times higher than before the pandemic. In today’s landscape, consumers are continuing to seek convenient and seamless embedded protection from the brands they interact with in their daily lives – whether they are booking a flight, making a retail purchase, or signing up for a card or loan from their bank.
What has been your biggest challenge and most rewarding moment since starting Cover Genius?
Building a startup from the ground up is incredibly challenging, but my co-founder and I saw a massive opportunity in the trillion-dollar insurance sector. It was not easy for us to gain licensing or authorisations across all 50 US states and more than 60 countries, bringing a tech-forward approach to insurance (an industry that has been very slow to evolve past its legacy systems). With an incredible group of individuals, we’ve surpassed these hurdles and built the only insurtech with global end-to-end capabilities for any industry.
One of our most rewarding moments was closing our Series D funding round of US$70 million. This achievement followed a monumental year of growth in which we reached US$1.1 million in daily gross written premium, nearly tripled year-on-year revenue, reached 10.5 million customers and broadened our reach in key industries through acquisitions and strategic investments. The new funds will be used to expand the scope of our XCover platform to protect even more of the customers of the world’s largest digital companies.
What’s your advice to someone joining the market?
Be bold. The insurance industry is built on legacy systems that have rarely evolved, despite significant technological advancements. At Cover Genius, a core value is to ‘make things better’. In that light, we are evolving insurance to be more tech-forward and customer-centric, rather than something consumers dread. This has been key to our success in a saturated market.
Where are you headed on your next trip and are you covered by embedded insurance?
Mumbai, to meet with our Indian team and attend local events. While I haven’t booked it yet, I always purchase protection and try to support our travel partners. With Cover Genius being global, I am constantly travelling to our offices in New York, San Francisco, London, Amsterdam, Germany, India and Singapore – and never miss the step of purchasing protection, because you just don’t know what will come up.