San Francisco-based startup Kover.ai, creators of a decentralized insurance coverage application, announced it recently closed a $1.5 million seed round from some big names in the Silicon Valley and Chicago tech ecosystems.
The round was led by West Loop Venture, with additional investments from Afore Capital and Techstars Venture. Kover.ai was also one of the nine companies that came out of the 2019 MetLife Digital Accelerator Powered by Techstars.
Any business can use Kover.ai’s infrastructure through a simple API to build and distribute coverage products to its own customers, bypassing the need to involve an insurance company.
For example, a rideshare app company with lots of drivers can build and distribute a self-insured “Driver Income Protection” to its drivers just by making an API call to Kover.ai’s API. In contrast, it takes years to build a new product on the traditional insurance infrastructure.
Powered by Smart Contracts
Premiums collected for each product go into a pool managed by a smart contract. This is called “autonomous coverage” since neither Kover nor the smart contract serves the interests of profit-driven insurance companies. Instead, the contract serves the community of members themselves. In other words, by using code to replace unwieldy carrier back-offices, autonomous coverage is cheaper, safer and a more scalable risk-hedging solution than traditional insurance.
“Insurance is an important societal infrastructure. It takes care of our downside so we can focus on pursuing the upsides of life, like a meaningful career, a happy family, and so on. However, insurance is tremendously inefficient today. The cost of inefficiency is hurting the consumers in the form of overpriced premiums, slow payouts, and lack of accessibility. We have a unique opportunity to fix this fundamental yet obsolete social infrastructure. When Kover.ai succeeds, insurance will be as accessible as running water.”
– Kover.ai Co-founder, Zack Peng