Start-up insurer lures NYSE-listed investor
$2m capital raising to help innovator ‘leapfrog’ NZ rivals
Astart-up Kiwi insurance company has attracted investment from a New York stock exchange-listed reinsurer as part of a $2 million capital raising.
Cove Insurance was launched in September 2018 and co-founded by Brett Wilson and brothers Andy and Rob Coon in a bid to disrupt the big players by offering better online access to insurance.
The brothers are the sons of Chris Coon who helped found New Zealand life insurers Sovereign and Partners Life and is on the board of the startup.
Chief executive Andy Coon said while the exact figure was not being publicly disclosed a portion of the funds came from Greenlight Re Innovations — part of Greenlight Capital Re — a specialist property and casualty reinsurance company headquartered in the Cayman Islands and listed on the NYSE.
Greenlight now owns 7.5 per cent of Cove. Existing shareholders, which include the government-funded New Zealand Venture Investment Fund, also invested more money into the capital raising.
“The round was strongly supported by existing shareholders. NZVIF, among others, participated and in fact doubled their previous investment.”
Coon said it made contact with Greenlight through one of its existing investors at the Singapore Fintech Festival.
“. . . what sets them apart from other investors is their deep connections into the overseas
insurtech market which we can leverage into offerings for our customers.”
Coon said it had spent the first year of its operations bedding down its technology and now it planned to use the funding to scale up its car insurance offering.
“We have proven market acceptance of Cove and with the new capital the next step is starting to scale up our marketing operations to let more Kiwis know about us and grow out our market share.”
Coon said Kiwis were used to slick online experiences with their banking these days, and the bar in terms of digital experience had been raised significantly by the likes of Netflix, Spotify and Uber.
“But for some reason insurance has been left behind in adopting userfriendly technology.
“This investment round will allow us to further develop our existing product to sufficiently leapfrog the traditional insurance companies in New Zealand. We’ll also be able to deploy more resources to marketing to let more Kiwis know there’s a better option out there for their car insurance.”
Greenlight Re chief executive Simon Burton said: “We believe Cove’s technology-driven business model has the potential to transform New Zealand’s insurance market.
“We look forward to supporting Cove as it develops new product offerings.”