Startup seeks selfies to beat claims fraud
Insurance claims that can be filed with a photo of the damage from a smartphone are not far from reality.
Startup digital insurer Cove, which has just signed a deal with Lloyds of London, will allow policyholders to submit a claim from their phone.
Cove intends to launch in competition with the two giant Australianowned insurers IAG (NZI, AMI, State) and Suncorp (Vero, AA Insurance), which sell most of the car, house and contents insurance that covers New Zealand households.
It’s the creation of a team including Andy and Rob Coon, the sons of multimillionaire Chris Coon, who set up life insurer Sovereign. Their father is chairman of the board of Cove.
Cove will be a digital insurer, selling policies to people who favour buying and managing their insurance on their mobile phone, much like fast-growing United States insurer Lemonade.
‘‘What they have done is to ask the customer to record a video of themselves talking about their claims,’’ said Andy Coon, Cove’s chief executive.
‘‘You can actually analyse the way they are talking, and a number of other things that give an indication if the claim is fraudulent.’’
People trying to dupe an insurer give themselves away with telltale slips of the tongue, phraseology, and other features of their claims and behaviours, which artificially intelligent software systems can identify.
When alarm bells ring, Cove will investigate claims further.
Being a digital insurer involves appealing to people who want flexible insurance that isn’t hard to buy, and doesn’t lock the buyer into a long-term contract.
Auckland-based Cove will offer monthly renewable car insurance policies, instead of the annual policies favoured by the big insurers.
Its products will also be ‘‘modular’’, meaning buyers get to choose what they want covered – for example, a contents policy that only protects their most valuable, specified possessions.
The deal with Lloyds takes Cove into a phase of ‘‘beta-testing’’ in which friends and family of the founders become customers, testing out the systems and policies before the insurer goes public later this year.
Its first products will be comprehensive car insurance and mobile phone insurance, but in time house and contents insurance will be added.
‘‘Becoming an approved cover holder at Lloyd’s of London is a huge milestone,’’ Andy Coon said. ‘‘This arrangement enables Cove to ... design comprehensive insurance policies which will be 100 per cent underwritten by certain underwriters at Lloyd’s.’’
Cove chief financial officer Brett Wilson said: ‘‘Our team saw innovative digital experiences being offered to customers internationally, and we wanted to bring this refreshing approach to New Zealand.’’
The company would roll out its technology over the next six months, starting with a chatbot experience, Rob Coon said. ‘‘From here we will expand and launch additional channels for purchasing and managing insurance.’’
Cove will outsource most of its functions, including claims investigation and collision damage repair.