InsuraGuest Technologies Inc. (TSXV: ISGI) is continuing to add new income streams with the most recent September 21, 2021 announcement of a strategic alliance with SUITELIFE Underwriting Managers. The firm is a division of Ryan Specialty Group, and a provider of insurance protections and other services to the hotels, resorts, and vacation rental companies.
As of October, 2021, SUITELIFE’s insured organizations will be able to become Preferred Customers of InsuraGuest, while also giving InsuraGuest access to SUITELIFE’s portfolio of over 700 hotels and providing credibility within the hotel sector.
InsuraGuest will integrate its proprietary API into a hotel’s property management software system, and can automatically attach the InsuraGuest coverage to each reservation, therefore enabling hotel users to transfer certain liability exposures to InsuraGuest Hospitality Liability coverages. This can lower a hotel’s claim ratios and risk profiles, while also potentially decreasing its umbrella General Liability policy premiums.
The InsuraGuest coverage fee of $4.95 per night is activated when a guest checks in and provides coverage on a per-day basis, until the guest checks out. The fee provides a win-win revenue-sharing opportunity for both InsuraGuest and the hotel.
InsuraGuest 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.
The company has been quickly gaining traction in recent weeks with a number of integration agreements with vacation property management companies on top of the Suitelife development, including OwnerRez, TravelNet, iGMS, and Lightmaker Property Management (LMPM). A key aspect of InsuraGuest’s growth strategy is to integrate its proprietary API into the customer management systems of as many vacation property management companies as possible to facilitate exponential revenue growth. The major benefit to the property managers is that they can use InsuraGuest’s insurance coverages as their primary no fault medical policy with a property rider to protect them from claims made by guests.
Mr. Reed Wright, President of InsuraGuest Technologies, recently stated, “The vacation rental sector grew eight-nine percent (89%) last year. So, our focus moving forward is to connect to as many vacation rental property management systems (PMS) as we can. The more PMS systems we connect to, the more property listings we can access, and the more InsuraGuest’s insurance products we can sell.“
By providing property management service providers with an additional profit center as well as reduced liability exposure, InsuraGuest will not be seen as a threat. The InsuraGuest revenue model is again based upon a per-nightly fee of $4.95 for hotels, and $9.95 for vacation properties., which is shared by the property manager and ISGI.
As an example (for illustrative purposes only), iGMS has 127,365 managed vacation property listings in its portfolio. Assuming just 10% penetration into these listings and assuming full occupancy, this could translate to topline revenues of up to $46.3 million, from just one vacation rental service provider.
Add in the revenue from the other vacation rental platforms InsuraGuest is integrated into, and this becomes a very exciting and compelling aspect of the recurring revenue and profitability potential for InsuraGuest and its shareholders.
As the InsuraGuest API integration process with the various PMS systems is completed, revenues should begin to ramp. This bodes well for the company’s future as more hotels and vacation property managers continue to adopt ISGI insurance coverages for their properties.
It would be reasonable for InsuraGuest shareholders to expect that as revenue and profitability growth accelerates, there would likely be a commensurate positive impact on the Company’s valuation from it’s modest current market capitalization of $22.6 million.
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