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April 11, 2022 Tech 25

2022 Tech 25: With $15M in fresh capital, Covr eyes next growth phase

HBJ Photo | Joe Cooper Covr Financial Technologies CEO Mike Kalen

With a fresh $15 million in Series B capital in hand, Covr Financial Technologies is ready to push the pace in growing its business-to-business insurtech business.

CEO Mike Kalen says Covr’s software provides a centralized portal for its asset management and wealth advisor clients to compare the benefits of certain name-brand insurance products and find the most affordable coverage for their customers. Its applications are aimed at simplifying how people buy insurance by standardizing the way insurance products are quoted.

He rattles off insurance giants like MassMutual, Nationwide, AIG and Pacific Life among the 38 brands Covr makes available within its white label product line.

He estimates 70% of Covr’s business is in life insurance with another 20% in long-term care insurance and 10% in disability and other supplemental coverage.

Kalen’s background includes stints as president of The Hartford’s individual life insurance unit and Hartford Life Europe. He joined Covr in 2018.

Today, Covr has its software as a service suite deployed with more than 30,000 financial advisors and 35 financial institutions. Its next target market for growth is independent insurance agents, Kalen says.

The firm’s roots are in Boise, Idaho, where National Brokerage leveraged deep local tech know-how to start working on insurance challenges. Seven years ago, Kalen explains, an infusion of venture funding allowed National to open Covr in Hartford to tap into the burgeoning insurtech ecosystem.

A Series A round in 2020 raised $7.5 million from the likes of Fairview Capital, Aflac Ventures and Connecticut Innovations.

Covr reported a 250% sales bump from 2019 to 2020.

The insurance talent available in Hartford fits perfectly with the company’s needs as it grows, Kalen says. Today, Covr has 115 employees, split about evenly among Hartford, Boise and remote offices.

Kalen points to seven hires that are the direct result of networking in Hartford. He also sees UConn as a strong trainer of young talent.

Covr took the leap to bring employees back to its offices on Hartford’s Constitution Plaza in September. It’s not full time and there are exemptions for those who are at risk or apprehensive, Kalen explains.

Many told Kalen “I didn’t realize how much I missed it,” he recalls.

He sees this hybrid approach as the new normal.

These are important times in insurtech as competitors emerge from pandemic restrictions that both heightened the demand for insurance and highlighted the advantages of a digital approach.

Many — like Covr — have thrived but a consolidation phase is right around the corner for the industry, Kalen warns. He points to insurer Travelers Cos.’ recent purchase of Trov, a San Francisco Bay area insurtech that has created a direct-to-consumer mobile insurance platform, allowing for on-demand insurance purchases. He expects to see private equity firms buying and merging insurtechs to achieve scale.

“You have to grow to control your own destiny,” he says.

And growth is exactly what’s on his agenda for Covr as it adds the new funding to its toolbox.

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