Trōv’s many firsts, now in Travelers’ arsenal

In 2020, Trōv developed the Embedded Insurance Platform (EIP) and launched it in June 2021. The EIP was purposed to aid the distribution of P&C insurance products by companies with digital footprints. Trōv saw the latent potential in embedded insurance and tapped the market need of digital consumer brands that sought new insurance offerings. Recently, Travelers acquired Trōv and announced the latter’s embedded platform will be folded into Travelers’ personal lines.

Founded in 2012, Trōv began as a direct-to-consumer mobile platform providing insurance on-demand for single items and was available in the US, UK, and Australia. In 2019, Trōv pivoted to a B2B model and began to offer on-demand insurance to companies such as Lloyds Banking Group, PSA, Suncorp and Waymo. It is credited with numerous industry first solutions that influenced the transformation of the insurance industry, including claims-chat, micro-duration policies, and all-digital user experiences.

The heightened focus on the embedded insurance model has resulted from catalysts such as: social trends (ecommerce and gig economy), access to unfettered customer pools and the resulting innovation. Trōv’s model was eulogized as it provided among the best routes-to-market for digital insurance products. Besides, Trōv’s architecture enabled it to navigate the complex global landscape of underwriters and products to deliver at a global scale.

Trōv’s platform provided the ‘plumbing’ to connect insurance products and underwriting capacity with distribution partners. The platform performed the complex logic underpinning insurance value chain from quote & bind to endorsements to claims FNOL. This functionality is exposed to digital front-ends through Trōv’s APIs. Distribution partners got three front-end options: use white-labelled UI, embed insurance features in their own UI, or deploy Trōv’s referral toolkit to offer insurance branded by underwriting partners.

Trōv’s architecture and distribution APIs were designed to be product and underwriter agnostic. The merits of the approach being that post a distribution partner building the integrations using Trōv’s APIs, they could subsequently add newer products with minimal additional time and investment.

Travelers is an American insurance company, which takes on risk and provides coverage to protect things such as homes, cars, valuables and businesses.  It has occupied a top 5 position in five major product lines, including a #1 position in workers’ compensation and commercial multi-peril.  The company has been around for more than 165 years and with a $32 billion in net written premiums, is the only P&C carrier in the Dow Jones Industrial Average.

It has approximately 30,000 employees and 13,500 independent agents and brokers in US, Canada, UK and Ireland. Its proprietary risk assessment database has 200 million+ data points compiled over more than a decade. Now, with Trōv’s sophisticated technology and talented team, Travelers aims to accelerate ongoing efforts to provide customers with personalized solutions in their channel of choice.

While being regarded as a frontrunner among insurtechs, the deterrent with Trov’s model and scaling in embedded insurance might have been the ability to continue to find demand. What seems like a logical adjacency might not always translate into real demand. Despite its superior proposition and technology capabilities, Trōv also needed to scale efficiently. The direct cost per acquisition for the emerging brand was relatively high compared to customer lifetime value that flexible insurance offerings generate. Realizing its USP was in its middleware technology platform, though Trōv pivoted in 2019 towards a B2B model with distribution partners, maintaining a path of profitable growth was fraught with hurdles.

Insurtech distributors are perceived as potential competitors, capable of eventually capturing significant market share from incumbents. The Travelers/Trōv deal shows that incumbents are better primed for longevity, whereas insurtechs juggle with maintaining funding runway to demonstrate their proposition. Some insurtech MGAs are realizing the potential revenue streams from turning into software companies, licensing their tech stack or getting fully acquired.

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