Woman using Trov app to make a claim
Woman using Trov app to make a claim

InsurTech startup Trov makes a significant step towards its international expansion, entering the US market, as it begins to offer on-demand insurance to Arizona residents.

The company was pleased to announce the news of the roll-out on its website blog. Scott Walchek, Trov founder and CEO, author of the blog post said:

“We’re live in the USA. Our team has worked tirelessly toward this moment and we’re beyond excited that our friends and families can finally use what’s been enjoyed by users around the globe for the past couple of years.”

Trov also reported that it has receiving approval from 44 of the 50 States plus the District of Columbia, suggesting that national roll-out will follow soon.

In partnership with Munich Re as their underwriter, Trov is putting tech-driven insurance products within the reach of millions of Americans. This follows the company’s success in Australia and its recent move into the UK market.

Reached by email, Trov was unabashed about their ambitious plans to upend the insurance market.

“Insurance lags way behind the expectations of today’s connected consumer, and Trov gives them a radically new way to protect their things. What iTunes did to change the way people buy and enjoy music, Trov is doing for insurance – enabling people to protect whatever they want, wherever they are, for whatever duration they need – and only pay for the protection they use.”

Email statement from Scott Walchek, Founder and CEO, Trov

Building on initial success Down Under

Founded in 2012 by Silicon Valley veteran Scott Walchek and serial-founder Mark Dowds, Trov initially established itself in Australia in 2016, partnering with underwriter Suncorp Group. The UK followed in 2017, where Trov joined with AXA to offer services to the British market. This initial success, and a total of $85million in funding, has allowed the firm to establish itself as a key player in the InsurTech market.

One key vote of confidence is the company’s partnership with Waymoformerly the Google self-driving car project.

Google Alphabet’s autonomous car venture has chosen Trov as the provider of rider coverage and will bundle comprehensive coverage from Trov into the overall cost of each ride. Waymo began rolling out its ‘Early Rider’ public test in Phoenix, AZ in mid-2018 which might explain Trov’s choice of Arizona as its first market. Tellingly, Waymo favoured Trov over other transport-centric InsurTech firms even though the company doesn’t highlight transportation as a key offering.

Trov declined to share user numbers but responded by email that the company has passed 1 million protected days. The company explained that “Given that many of Trov’s customers turn protection on and off for periods of time, days of protection is the core measurement the company uses to track growth.”

End-to-end technology

Trov appears focused on mobile, tech-savvy, Gen-Y and Millennial users and its marketing campaigns stress how easy and affordable it is to insure individual items on the go.

This segmentation in the US is very similar to campaigns Trov has run in Australia and the UK, reinforcing the company’s focus on this demographic. Trov highlights several key differences ranging from the user experience to the underlying policies they offer.

First, the app. The Trov app allows users to photograph an item and add it to their ‘my Trov’ inventory to quickly and easily receive coverage. Although the photo-based approach might appear to be similar to Cover.com, which uses photos of items to link a user to a broker, Trov is the also insurer. This means that the entire transaction takes place within the Trov app in a single session.

Moreover, the app also allows users to insure items for short periods of time, as little as a few hours.

Second, premiums. Trov is promoting ‘smart premiums’ where the cost of coverage is linked to the market price of the item insured. As the item’s value depreciates over time, Trov recalculates and reduces the premium to reflect this change. Although there may be a point where the depreciation reduces a claim below the actual replacement value – say where an older item is no longer available so a newer, more expensive replacement is required – this feature should again appeal to younger consumers looking for savings.

Third, Trov has a low and no-questions-asked approach to claims payments. Similar to Lemonade, the Trov app uses a chatbot backed up by fraud-detection AI to settle claims.

When the bot raises red flags, the claim is routed to a claims team who follow up with the claimant.

Otherwise, the company brags that claims are settled in as little as three seconds.

Claims settlement – InsurTech killer feature?

Trov’s simplicity and offering ‘pay-as-you-go’ micro-policies should prove attractive to connected consumers used to on-demand services. However, their rapid claims process might be the ‘killer feature’ that differentiates InsurTech firms like Trov and Lemonade from traditional insurers.

No matter how smooth and simple the purchase or extensive the coverage of a policy, the real test of any insurance is when a claim is made.

By offering fast, almost instantaneous settlement, Trov and other InsurTech firms like Lemonade, are signifying a clean break from the traditional approach of an arduous claims process. Not only does this satisfy customers who are increasingly used to fast, on-demand services, but there is a significant cost saving where fewer human claims adjusters are longer required.

Traditional firms respond slowly

Unsurprisingly for a business as conservative as insurance, traditional firms seem slow to respond to these challenges. Most major insurers such as Geico, Progressive and Nationwide offer apps to customers but these are often no more than digital policy wallets with some additional features.

Even online providers like Allstate’s Esurance are essentially offering a traditional approach of blanket policies and human claims adjusters, albeit ones summoned via the app.

Other established firms are being more innovative and in addition to underwriting Trov in the US, Munich Re has launched its own Digital Partners (DP) venture to take a more tech-led approach.

However, while traditional firms seem more focused on the front-end user experience such as digital portfolios, InsurTech firms like Trov are building end-to-end tech solutions.

Unlike firms such as Cover.com and EverQuote which are using tech to make parts of the insurance process more efficient, Trov and others imagine upending all parts of the insurance process with tech. Trov, Slice, Lemonade, Sure and Coya are all using technology to change everything from the user experience to the policies themselves.

However, while this group may pose the biggest challenge to the industry, the difficulty that companies like Trov face is to ensure that a highly efficient market, particularly one offering short-term, low-cost micro-policies, is one that is still profitable for the provider.

Trov’s US roll-out will be a test of that business model and one that other firms, traditional and tech, will be watching carefully.

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