Covr Financial Technologies may be new to Hartford, but its chief executive has long been a fixture of downtown’s growing insurance-technology ecosystem.
In January, the digital life insurance software developer, previously based in Idaho, launched its new corporate headquarters in downtown’s iconic Boat Building at 1 American Row, where it houses about 15 employees.
While new staffers during a recent evening were still getting familiar with their fifth-floor space, CEO Mike Kalen found himself in familiar territory spearheading Hartford’s next insurtech hopeful.
Kalen, a former president of U.S. individual life operations at The Hartford and former CEO of its Hartford Life Europe operations, was part of a five-member advisory board in 2017 that recruited London-based Startupbootcamp to develop and operate the Hartford InsurTech Hub accelerator in downtown’s Stilts Building.
That initiative has drawn more than 20 insurtech startups to Hartford focused on technologies that aim to help or reshape the health, property and casualty, and life insurance sectors. Each participated in a months-long accelerator to hone their technology and business strategy.
Kalen, a West Hartford resident, is now looking to tap Hartford’s growing insurtech pool he helped push forward.
“We needed to go to a place where there were new skills and traditional skills,” says Kalen, who was appointed Covr’s CEO in March 2018. “For us, Hartford was one of the top markets to do that.”
Kalen says Covr expanded in Hartford primarily because the region offers a larger, more skills-ready talent pool compared to Idaho, where the insurtech’s founder and current chief innovation officer, Todd Ruplinger, hails from. Connecticut’s workforce is also more affordable than other tech markets like New York City and Silicon Valley — where Covr also considered moving its corporate headquarters.
Covr’s software provides a centralized portal for financial advisors to compare the benefits of certain life, long-term care and disability insurance plans 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.
Covr currently houses all of its technology jobs in Boise, Idaho, but has plans to hire additional technologists in Hartford as the company’s software gains new customers.
“We definitely see utilizing this as a growth footprint for future jobs as the company expands,” Kalen said of Covr’s 2,800-square-foot Hartford office, which shares floor space with Nassau Re’s newly minted insurtech incubator program. “In Boise, we generally had to train workers. In Hartford, we hire people that already have the skills.”
Kalen also sees major capital-raising opportunities for the seven-year-old company in Hartford.
After all, financing for insurtechs in the U.S. soared from $126 million in 2010 to $4.4 billion in 2018, according to investment banking firm Financial Technology Partners. That number is projected to climb another 40 percent to $6.1 billion by year-end 2019.
Covr has been a beneficiary of that boom, announcing last fall it raised $10 million in Series A funding from its venture-capital partners, including Nyca Partners, Allianz Life Ventures and others. That money is being used almost entirely on expanding Covr’s salesforce and furthering its investments in technology. Remaining dollars were leveraged to setup in Hartford.
Covr has now raised more than $20 million, which has propelled the company into CB Insights’ list of top 60 brands in insurance technology.
Kalen expects Covr’s fundraising to continue to climb with the company’s new Hartford presence. The startups that have gone through the Hartford insurtech accelerator have raised $39 million over the last two years, which shows there is an appetite for investment here, he said.
“It was very easily recognized by our venture-capital backers that Hartford was a great location to start a sales and marketing office for a digitally enabled technology company,” he said. “It all happened quite naturally.”
While Covr, founded in 2012 as 1 Click Coverage, has built a large client base of its own, the insurtech significantly grew its footprint over the last year as it began partnering with the industry’s largest financial planning software used by advisors.
Covr software is currently used by 24,000 financial advisors, and now helps support a portion of the 100,000 advisors being served by MoneyGuidePro, which was built by software company PIETech.
Covr developed the first life insurance application that was fully integrated with the MoneyGuidePro financial software in April 2018.
In March, MoneyGuidePro was acquired by financial services giant Envestnet Inc. for $500 million, giving Covr an even wider net to cast from.
“Not many financial advisors talk about protecting assets with life insurance, long-term care or disability income products,” he said. “Now that we are in a partnership with MoneyGuidePro, we help facilitate those conversations for advisors and clients to get the advice they need to protect their retirement plan.”
For Kalen, Covr’s expansion in Hartford gives the company more footing to stand out in the highly competitive, fast-growing insurtech industry.
Kalen, who raises capital for Covr, said the company may have appeared as an outsider if it had landed in New York or Silicon Valley, which are already crowded global hubs of technology and innovation.
Hartford also provides Covr a top industry workforce to pull from, he said, listing off life insurance giants like The Hartford, Prudential, Voya, MetLife and others that have given the city an insurance-centered identity.
Plus, when you add in the recent debuts of IT giant Infosys, Stanley Black & Decker’s new innovation hub and other initiatives, Kalen sees momentum he’d like to leverage.
“It’s energizing to see all this innovation that is coming back into the city,” Kalen said. “The talent is good today, and the talent over the next three years is going to be even better.”