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NEW YORK (Reuters) - HSB Ventures Inc, the venture capital subsidiary of German reinsurer Munich Re, has led a $45 million investment in Trov, a U.S.-based technology startup that provides on-demand insurance.
Trov is one of a growing cohort of so-called insurtech companies looking to modernize the insurance market by taking advantage of new digital technologies. Large insurers are working with these young companies to improve their own digital products and services.
Japanese insurer Sompo Holdings Inc also joined the investment round led by Munich Re, bringing the total raised by Trov to $85 million, the startup said on Thursday.
Existing investors Oak HC/FT, Suncorp Group, Guidewire Software Inc and venture capital firm Anthemis participated in the latest round.
In addition to investing, Munich Re and Sompo will work with Trov as underwriting partners as the company expands into Europe, Asia and South Africa, according to the joint statement.
Currently available in the UK and Australia, Trov plans to launch in the United States by the end of 2017, where it had previously announced a partnership with Munich Re.
Trov enables users to buy insurance for specific products, for a specific amounts of time through their smartphones. Users can turn insurance on and off with a swipe and also file claims through the app.
While Trov sells the insurance, manages the payments and takes a percentage of the recurring premium, it relies on large insurers as partners for underwriting and much of the required regulatory licensing.
In turn its partners are able to tap a growing segment of digital-savvy customers that they have traditionally struggled to reach, said Scott Walcheck, Trov's CEO.
"It's an emerging [segment of] consumers that live their life on a super computer in their pocket," Walcheck said.
Insurtech startups have been developing new products and services ranging from devices that collect data on how a user drives, to systems to automate claims management.
Other large insurers, including Allianz and AXA, have venture funds that back startups.
Reporting by Anna Irrera; Editing by Andrew Hay