US insuretech firm, Trōv coming to Suncorp Group Ltd

By: James Mickleboro

Moving with the times is key for all businesses, and none more so than those in the insurance industry. PwC recently estimated that the insurance industry is the second-most likely industry after the media industry to be significantly impacted by technological change.

Considering the rate of decline of media companies like Nine Entertainment Co Holdings Ltd and Quickflix Ltd., we could be nearing a make or break point in the insurance industry.

Which is why shareholders of Suncorp Group Ltd should be pleased to learn that the company has made an investment in a San Francisco-based “insurtech” company by the name of Trōv.

Trōv is a mobile app that allows consumers to easily collect and retain information about things they are buying or already own, including your car or even your home. The app notifies users of changes in market values and will store receipts.

This all sounds very nice, but how will Suncorp benefit from this you’re probably wondering. Well continuing the swipe left, swipe right success of Tinder, users can swipe on one of their items in the app and insure that item then and there. When they no longer need to insure the item they can swipe the other way and cease its cover.

This on-demand insurance coverage is aimed at the millennial market which Suncorp believes is a largely untapped market. According to its chief executive Michael Cameron, a large portion of the millennial age group doesn’t have insurance because it doesn’t meet their needs. This move is designed to address this issue.

On-demand insurance through Trōv could prove to be a great in-road into this untapped market and help the company reignite its earnings growth. Analysts are expecting its earnings growth to slow from an average of 6% per annum in the last five years, to just 3% per annum for the next couple of years.

If the company’s investments pay off and speed up its growth, then Suncorp could prove to be a bargain at present. The shares are currently changing hands at just 14x earnings, compared to insurance rivals QBE Insurance Group Ltd and Insurance Australia Group Ltd which trade at 15x earnings.