Another InsurTech has been acquired. This time, insurance broker Brown & Brown, Inc. bought CoverHound, a digital property/casualty insurance marketplace, and CyberPolicy, CoverHound’s small business subsidiary.
Neither side would disclose financial details. After the deal closes, CoverHound and CyberPolicy will continue to operate independently under Florida-based Brown & Brown and focus on scaling digital partnerships with trusted brands.
Brown & Brown said the acquisition helps it gain access to the digital insurance market for individuals and small businesses. It argues that combining its “strong carrier relationships and product knowledge” with CoverHound and CyberPolicy’s customer experience advances and partnership network will help create more value.
California-based CoverHound launched in early 2010 and raised more than $112 million in venture capital over the last decade, including a $58 million Series D funding round in 2019 with lead investor Hiscox and other investors including Chubb, Aflac Ventures, and MS&AD in Japan. Both it and CyberPolicy operate in all 50 states.
In 2015, Chubb (then ACE) took a 24% stake in CoverHound. However, with this deal, Brown & Brown will assume 100% ownership.
Over the past 10 years, CoverHound and CyberPolicy have maintained a leading Net Promoter Score of 82, have significantly increased the number of policies sold entirely online and have developed the capability to digitally quote and bind multiple carriers and products into a single online transaction, the deal announcement noted.
CoverHound/CyberPolicy’s planned acquisition follows a number of others of note in recent months. Last November, Aon acquired InsurTech CoverWallet, which began as a digital insurance agent designed to make it easier to understand, buy and manage business insurance online. Since then, InsurTechs such as Buckle, Coalition, Hippo and Bold Penguin have made acquisitions themselves.
Experts say that the cycle of InsurTech startups that began several years ago are reaching a point in their lifecycle where they must decide whether to pursue a merger, acquisition or partnership in order to keep growing and remain stable.
Source: Brown & Brown, CoverHound