The venture capital fund of Swiss insurer Helvetia has taken a stake in a Spanish insurtech. The deal will help the Swiss company gain valuable insight into how young consumers chose their insurance coverage.
The Helvetia venture fund has taken a stake in the Spanish start-up Freshurance, according to a statement by the Swiss insurer on Tuesday. Freshurance has launched a peer-to-peer mobile phone insurance for the Spanish market under the name of Cobertoo. Cobertoo's target groups are millennials and generation Z with a smartphone.
The insurance model applied by the firm is interesting from a behavioral economics point of view, Helvetia said. Clients have incentives to avoid unnecessary damages to their devices. The entire insurance process, including claims settlement, is handled digitally. The business model can be considered highly innovative within the insurance sector due to its transparency and user experience, said Helvetia.
Charitable Purposes
Under the peer-to-peer approach, policyholders pay a monthly membership fee of 1 euro and monthly premiums for the insured mobile phone, dependent on the model. Freshurance receives the membership fee and 25 percent of the premium. The remaining 75 percent of the premiums are pooled. Claims are paid from this pot. 75 percent of everything that remains in the pot is returned to the policyholder in the form of a cashback. The other 25 percent are donated to NGOs for charitable purposes.
With its investment in Freshurance, Helvetia is gaining insights into the highly innovative Spanish insurtech market and further knowledge of peer-to-peer business models.
