Australia-based embedded insurance providers are driving growth through strategic alliances and mergers and acquisition deals

Print

Email

As traditional insurance has been the way for many, the embedded insurance sector has taken time to evolve and grow in Australia. However, over the last few years, there have been a host of strategic partnerships in the space, pushing the sector in a new direction while supporting the growth of the embedded finance industry in Australia.

Many innovative startups have emerged on the embedded insurance landscape over the last few years, and these startups are increasingly partnering with firms across industries to drive their growth and sales volume, which is subsequently assisting the growth of the overall sector. For instance,

• In August 2022, Cover Genius, one of the leading embedded insurance firms globally and based in Australia, announced that the firm had entered into a strategic collaboration with Zip Co, one of the leading buy now pay later (BNPL) firm in Australia.
• Under the strategic partnership, Zip will integrate XCover, the global insurance distribution platform of Cover Genius, into its BNPL platform, thereby enabling Zip Money and Zip Pay users to protect their purchases during checkout or after checkout on select purchases.
• Along with its partnership with Zip, Cover Genius also teamed up with RMS Cloud, a property management software company, to offer embedded insurance products to park operators in July 2022. In Australia and globally, the RMS Cloud’s property management software is used by thousands of parks, campgrounds, and holiday parks.

Cover Genius has also ventured into mergers and acquisition deals to further strengthen its partner network. For instance,

• In July 2022, Cover Genius announced that the firm acquired Booking Protect, a refund protection specialist. This acquisition is part of the firm’s strategy to enter the ticketing and live entertainment market.
• Notably, Booking Protect is a global refund protection specialist for platforms, ticket sellers, and live event companies such as Spectrix, SeatGeek, and Night Out in the United States, Zaiko in Japan, OzTix in Australia, and TicketSource in the United Kingdom. The acquisition will allow Cover Genius to provide ticketing platforms and over 350 partners of Booking Protect with embedded insurance protection through XCover.

Notably, the strategy of partnering with firms across industries and entering into mergers and acquisition deals has allowed Cover Genius to boost its growth and sales volume globally. For instance,

• In February 2022, the firm stated that it had sold over 10 million policies and registered a growth of 667% in sales for its distribution platform. As of July 2022, the firm has sold over 2 million policies.

Currently, the firm is active in different sectors such as retail, logistics, finance, property, travel, mobility, business services, and ticketing and events. In the global market, the firm has partnered with some of the leading digital platforms, including Booking Holdings, Flipkart, and Shopee, among many others.

With the growth of Cover Genius in the Australian and global markets, more insurtech firms in Australia are eyeing the embedded insurance model. For instance,

• In August 2022, Coverhero, an Australian insurtech firm, announced the launch of a new Application Programming Interface (API). The launch of the API is part of the firm’s strategy to enter the embedded insurance space. Notably, the API can be integrated with most platforms, thereby allowing consumers to purchase insurance policies directly from the marketplace.
• Like Cover Genius, Coverhero is also partnering with businesses across different industry verticals. In 2022, the firm also partnered with Blys to protect income for massage therapists. According to the firm, a whole range of other marketplaces is in the pipeline for 2022. Coverhero is also looking at a potential launch of its embedded insurance services in the United States in 2023.

Along with the United States, the firm has also studied markets in Singapore, Vietnam, Thailand, and Malaysia as potential new markets where it can launch services from a short to medium-term perspective.

As these firms continue to expand their geographical footprint and partner with more digital players across different industry verticals, PayNXT360 also expects these firms to raise funding rounds from global private equity and venture capital firms from the short to medium-term perspective.

The collaborations, especially for Coverhero - with global investors, will remain a crucial factor in expanding their international presence. With the Australian embedded insurance market becoming more mature amid the presence of innovative players in the sector, PayNXT360 expects these firms to keep driving the growth of the embedded finance sector over the next three to four years.

To know more and gain a deeper understanding of the embedded finance market in Australia, click here.