InsuraGuest Technologies Inc. (TSXV: ISGI) is an insurance technology (InsurTech) company that has developed a transformational and disruptive proprietary software platform that is changing the way insurance is being delivered digitally. The company has targeted the hotel and vacation rental industries as its initial niche markets, and is marketing on-demand insurance products that were developed specifically for these sectors.
As the post-Covid-19 pandemic world reemerges from the 2020 lockdowns, the devastated hospitality sector is poised to mount a rapid and massive rebound as consumers and corporations rush to return to their pre-pandemic normal lives of business and leisure travel. InsuraGuest is well positioned to capitalize on this rebound.
What differentiates InsuraGuest’s products from traditional insurance offerings is that they provide their customers with a new source of revenue, instead of just being an expense item. Hotels and vacation property management companies typically purchase liability insurance, which can be quite costly and only protects the company’s own liability. Inherently, liability claims will inevitably result in increased premiums.
InsuraGuest Hospitality insurance options change this traditional model, by establishing an intermediate layer to provide coverage to address claims made by guests such as accidental property damage or theft, theft of personal property, as well as accidental medical, dismemberment or death expenses. Client companies are encouraged by InsuraGuest to include this insurance as a line item on a guest’s bill, as it serves to provide an additional layer to a guest’s comfort level, and also serves to reduce potential liability claims against the hospitality provider.
One example of this, is a vendor agreement recently entered into with Hostaway, a leading all-in-one vacation rental software company that provides marketing, sales, management, reporting, and communication services for over 100 vacation rental property managers such as AirBnB, VRBO and Expedia. InsuraGuest’s hospitality liability coverage application forms will be integrated within the Hostaway dashboard, which will enable Hostaway users such as professional hosts and property management companies to easily sign up for InsuraGuest offerings, and pass the expense of such coverage on to their consumers.
“Hostaway is one of the largest and fastest growing short-term rental property management software companies in the world , and we are excited to be the ONLY insurance vendor they will currently offer to their clients.”
What makes InsuraGuest compelling for investors is the firms revenue model, which is predicated on charging its platform service fee on a per room, per night basis. As software integrated with hospitality provider guest management systems, the InsuraGuest platform is always working in the background, and effectively becomes a 24/7 revenue generation platform, enabling investors to effectively bet on the return of the hospitality sector.
The Covid-19 pandemic resulted in essentially shutting down the global hospitality industry as everything from hotels, cruise lines, restaurants and vacation destinations suffered from the lockdowns that prevented any travel that was not deemed essential. This in turn affected related industries such as entertainment, restaurant, live events and many others. Now that global vaccination rates have enabled many travel restrictions to be lifted, people are increasingly desperate to resume normal life, which includes both business and pleasure travel, vacations and many other activities that will benefit the hospitality industry.
This economic resurgence will likely be a key catalyst for InsuraGuest’s growth track. Despite the lockdowns, the company has signed up a number of hotels and its agreement with Hostaway should result in accelerated revenue growth, which could potentially grow exponentially as more hospitality providers adopt the company’s insurance products.
At this point in time, there are few competitors in the hospitality space, but that could eventually change. To diversify its risk, InsuraGuest is also working on developing insurance products for other market segments and continues to develop advances in its technology platform. The firms management team collectively has decades of extensive experience in finance, insurance, risk management and technology to guide the company through this stage of growth.
With 55 million shares outstanding and a very modest market capitalization of only $17.6 million, InsuraGuest represents an intriguing and unique growth opportunity for investors who are comfortable with the usual risks associated with early-stage companies, while also looking to place a bet on the reopening theme.
FULL DISCLOSURE: InsuraGuest Technologies is a client of Canacom Group, the parent company of The Deep Dive. The author has been compensated to cover InsuraGuest Technologies on The Deep Dive, with The Deep Dive having full editorial control. Additionally, the author personally holds shares of the company. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security.